Income for Canal & River Trust

THERE is a lot more money than has been suggested by your contributors, there is a lot more that the £39m put on the table by the Government, writes John Dodwell.

Let's take a look at the last British Waterways accounts. These show £159m annual income for the English and Welsh waterways arising from:

• £34m from property rentals and wayleaves and premiums;
• £24m from utility income (e.g. cables in the towpath) and water sales
• £29m from boat licences, mooring permits and British Waterways Marinas' gross income
• £10m maintenance and other income (mainly from local authorities)
• £12m contribution to other third party funded works (restoration/regeneration)
• £3m miscellaneous
• £47m Government grant

Non-Government income

There was £100m of non-Government income. I've put to one side the £12m third party funded works income as it is roughly matched by the £15m third party works expenditure.

Of course, it's glaring that the £47m Government contribution is, if the Government has its way, going to go down by £8m to £39m. This £8m is 17% of the £47m. It's 5% of the total £147m income (leaving aside that £12m third party money).

Pam Pickett referred to some other Government connected agencies facing further cuts by 2015—and I hear the same. It's worthwhile reflecting on the 'at least £39m a year for 10 years' offered by the Government. Recently, a planning journalist expressed astonishment that Canal & River Trust was being offered a fixed sum for as long as 10 years and was also astonished that it wasn't signing up immediately. But that's not what Canal & River Trust is doing. As the Trustees said in their 6th October statement:

Funding

'Funding is key to the success of Canal & River Trust. There is no point setting up the charity with inadequate resources. We know what we need from government and we need to persuade them to increase their current offer of £39m per annum for 10 years to a level that ensures Canal & River Trust is viable'.

Some commentators have been pleased that the Government negotiations have taken longer than expected. "The delay proves Canal & River Trust not an easy touch. It means they're not rolling over lightly despite the pressure they must be under.

Exemptions

We already know that as charities enjoy some exemptions from business rates, there's about £1m of potential annual savings for Canal & River Trust there. And we know that another £1m pa will be saved from the move of the head office to Milton Keynes from Watford/Paddington after existing leases end.

Small sums, I hear you say—and you'd be right, but it all helps a bit. And Canal & River Trust, as a charity, will be exempt from tax on investment property sales profits, so there will be a bit more to be added to the investment pot to produce more income.

Still a gap

Anyone can see that there's still a gap. Readers can see it. The Trustees are well aware of it. I know it's difficult to be patient when if you work for British Waterways you rely on your employer for your pay; or if you live on your boat, it affects your home; or if it's where you spend a lot of your leisure time, it matters a lot to you.

But I do ask you to be patient and watch this space. The Trustees know the waterways need more money to improve their condition. But we won't get from A to B overnight—it'll take a longer period. Although fundraising will be one of the smaller sources of income for the waterways, the Trust's Head of Fund Raising does have some good ideas—she's frustrated she can't physically put them into operation until the Trust has the waterways.

Optimistic

I think we can be optimistic about the prospects for fundraising. The experience from the recent stoppage open days shows that there are already people wanting to donate money (or indeed time) and the Trust is having some very promising meetings with corporate partners.

In his post (14th January), Ken Keegan reminds us all that the Trustees are responsible for finding the money needed—he's right. He urges the Trustees to tackle the Government head on. As your readers can see, that's what the Trustees are doing. And it's no secret that the points Ken makes about index linking and pension fund deficit are part of what we are discussing.

John Dodwell, Transition Trustee

We put the above to our Allan Richards, who has been instrumental in disclosing such matters, who answers:

British Waterways (and now it seems one of our transition trustees) are fixated on its declining income. However, the true measure of the health of our waterways is maintenance backlog and funding gap.

State of waterways

Maintenance backlog defines the state of our waterways and funding gap the ability to change that state

I have suggested in several articles that British Waterways has a maintenance backlog of about a third of a billion pounds. However, it seems that neither British Waterways nor Canal & River Trust is willing to dispute that our waterways are now in a worse state than when Evans and Hales were appointed.

With funding gap, it is a matter of record that British Waterways' chief executive has told MP's that in 2010/11, in England and Wales, the funding gap was £39m based on a Defra grant of £47m. Put another way, if Defra grant had been that proposed by government for Canal & River Trust (£39m) then Robin Evans would have been telling the All Party Parliamentary Waterways Group that British Waterways needed £47m.

Loss of £110m

However, Evans also told the All Party Parliamentary Waterways Group that British Waterways made a loss of £10m so the £47m is actually £57m.

Are our trustees negotiating funding based on an index linked requirement for an additional £57m on top of the £39m on the table?

The simple answer is that we do not know.

What we do know, however, is that John Dodwell introduced a presentation at British Waterways's last annual meeting which suggested that British Waterways' need for extra government funding on top of the £39m was not an indexed linked £57m but just a straight £20m over the next ten years.

So the indications are that the transition trustees are only asking for about a third of the amount needed simply to stop British Waterways' waterways deteriorating year on year.

Furthermore, it seems that government will not provide it as evidenced by the drawn out negotiations.

Are our trustees just selling us down the cut?