CaRT's £58m loss will impact on maintenance
THE canal & River Trust (CaRT) has had a poor financial year, causing it to revise downwards £58 millions of expected future income, writes Allan Richards.
This will have a major impact on its ability to maintain the waterways entrusted to its care.
Three years plan
Around this time each year, CaRT publishes a three years plan. This year it was published together with CaRT's 'Ten Year Strategy' and was referred to in the presentation given by chief executive, Richard Parry, at the poorly attended boaters meeting in Birmingham, at which he stated:
Significant step forward?
"The current 'three year plan' ends 'This plan represents a significant step forward for the Trust as it approaches the end of its third year. It has made much progress in its short life to date and this plan will continue our progress, to deliver a sustainable long term future for our waterways. It sees increased income that in turn leads to greater on-going expenditure in our historic infrastructure—whilst also extending our impact on public benefit in line with our long term strategic goals and local priorities. This plan gives us a firm basis upon which to build our vision of living waterways which transform places and enrich lives."
It is signed by Richard Parry, chief executive, and is dated April 2015.
However, the fact is that the current plan is a significant step backwards for the Trust. A massive £58m step backwards which the Trust has tried to hide!
Nobody questioned
It appears that nobody at the meeting questioned why the financial information presented in the latest iteration of the three year plan was in a different format to previous years. Nobody, it seems, thought to compare the new plan against last year's plan.
However, to be fair to attendees the ‘three year plan' was only published 24 hours before the meeting which gave little time to study it. Also, attendees had no knowledge that it would form part of the chief executive's presentation.
The £58m ‘loss' in expected income is very worrying for the future of our waterways. Even more worrying when you consider the blind acceptance in some quarters of the positive spin that CaRT have been putting on their financial performance over the last year or so.
Request unanswered
A request to CaRT to provide its latest three years plan in the format of previous years remains unanswered. Indeed, it took the Trust two weeks to even acknowledge that they had received a request despite usually acknowledging within 48 hours.
As such, at the moment, we can only provide the shocking bottom line figures regarding CaRT's total income. The reasons for those figures will come later when, hopefully, CaRT provides the information requested or makes a statement.
The figures—last year
CaRT's financial year runs from the beginning of April to the end of March. Firstly we will take a look at CaRT's last financial year (2014/15) and compare CaRT's current plan to its previous plan.
CaRT's current plan states that its total income last year was £183.8 millions. However, its previous plan shows that it expected a total income of £196.8m. As such, CaRT has achieved some £13m less than planned!
2015/16 and 2016/17
However, this is not just a single year problem. CaRT's financial difficulties extend into the future and can be best shown by comparing its previous and current 'three year plan' projections for this year (2015/16) and next year (2016/17).
The figures for this financial year show that CaRT has revised its total income downwards by £12m (from £201.2m to £189.4m).
Next year it is even worse with total income down by a massive £33m (from £225.7m to £192m).
So the Trust is now saying that that its total income will drop by a staggering £58m against its previous plan over the three year period 2014/15 - 2016/17.
... only its not saying it! Indeed, it is trying to hide it! The current plan makes no mention of why it performed so badly last year and why that poor performance has caused it to reduce its future income projections.
For those who like to see information in a tabular form here is a small spread sheet:
The spread sheet has been used to verify the figures given above. Again, this shows that CaRT has revised its total income plans downwards by £58m (actually £58,554,000) since last year.
Carrying the can
With Richard Parry's name at the bottom of the current three year plan, it would appear that the intention is that he should ‘carry the can' should the massive loss of income be exposed.
However, the Trustees will, no doubt, have approved this latest plan—a plan that attempts to hide a £58m loss of income.
Shame on them!
With a Board meeting coming up on 20th May, perhaps the Trustees will make a statement on what has gone wrong and who is being held responsible.
[The screenshots are taken from the current three year plan (section 3.1) and the previous three year plan (section 2.1). The highlighted and ringed figures are ‘total income' for (left to right) 2014/15, 2015/16 and 2016/17. These figures have been used in the spread sheet provided.]