Silence on bonus scandal

Published: Monday, 19 September 2011

AT BRITISH Waterways' remuneration committee meeting in May it was confirmed that a decision had already been made not to pay bonuses to its eight executive directors for performance during the 2010/11 financial year, writes Allan Richards.

Despite this, a payment of £15,000 has been made to British Waterways' Chief Executive Robin Evans and £12,500 to other directors. Some have queried what the minutes actually said, the interpretation placed on them and narrowboatworld's call, three weeks ago, that directors should give the money back.

Acting illegally

In July, narrowboatworld reported that four breaches of the Freedom of Information Act act had occurred due to British Waterways not responding to requests within the 20 working days required by law. These breaches occurred despite 24 reminders that British Waterways had not discharged its obligations under the Act and two requests to hold an internal review. They eventually led to four complaints to the Information Commissioners' Office (ICO).

Thanks to the ICO's intervention, various Board papers including minutes of a remuneration committee meeting held on 4th May were made available. They are in the public domain and may be found on

What the minutes say

Item 4 of these minutes states ' Payment of a bonus in 2010/2011 was debated. It was agreed that the Directors performance should be recognised for significant achievements this year against an extremely challenging business climate. This should be done both publicly and internally However, this would not be in monetary terms because it had already been decided not to pay bonuses for 2010/11.'

Significant achievements?

We will leave aside the 'significant achievement' of British Waterways using £9m in a failed attempt to prevent its pub joint venture falling into administration. We will also gloss over British Waterways' £4m provided to its marina subsidiary British Waterways Marinas Ltd to purchase more marinas despite that company not returning any profit to the waterways. Suffice to say it is £13m squandered that could have reduced British Waterways' £39m maintenance under-spend last year by a third!

It's not the British Waterways' self aggrandisement in its minutes that is of importance here but rather the last sentence of the extract. Unarguably, it reaffirms a decision already made not to pay directors bonuses for 2010/11.

Terms of reference

The remuneration committee's terms of reference make it clear that its main meeting is held in May and that one of it's duties is to 'approve the design of, and determine targets for, any performance related pay [bonus] scheme operated by British Waterways for the Chief Executive and executive directors; to review performance accordingly and approve the total annual payments made under such scheme'.

It was, of course, in discharge of this duty that the committee reaffirmed its decision not to pay bonus.


However the Board's decision not to make payment is contradicted in a press release dated 18th August. It states 'The Board of British Waterways, which is appointed by Government, wishes to recognise the exceptional contribution made by certain staff, including executive directors. Accordingly, and in strict adherence to government guidelines, they decided that capped Performance Related Payments should be made'.

Well sorry British Waterways, you have provided information under the Freedom of of Information Act which confirms your Board's decision that these payments should not be made.

No explanation

Perhaps unsurprisingly, no explanation has been forthcoming. To ensure some sort of response a further Freedom of Information request has been made:

'I refer to your press release Statement concerning performance related payments ( 18th August).

This justifies payments made to directors and others on the basis that:

'British Waterways was able to maintain expenditure on maintenance and repair of the historic waterways at similar levels to previous years despite a reduction in grant funding'.

Please provide the figures, with reference to your annual reports, that show maintenance spend in 2010/11 was at similar levels to previous years. Please also provide documentary evidence that directors performance related payments were authorised by the remuneration committee'.

British Waterways is required by law to respond promptly and within 20 working days. To date it has not responded. Indeed, it would be fairer to say that, contrary to its normal practice, British Waterways has not even acknowledged the request.

Buck stops at the top

The buck stops right at the top with this scandal. The remuneration committee minutes record that (Board and Transition Trustee) Chairman, Tony Hales and his Chief Executive, Robin Evans, were both present at the May meeting where it was confirmed that payments would not be made.

As such, both chief executive and chair can not deny that payments have been made against the express wishes of the Board. They also can not deny that the press release states categorically that the Board sanctioned payment. However, neither has taken any action to remedy the situation.

In the letters page of Waterways World (October 2011) we find Tony Hales saying 'I recognise directors pay is both an important and emotive subject to many different parties'. Perhaps that is why he carefully omitted to say, in his three columns of waffle, that British Waterways' directors have awarded themselves bonuses of £15,000 or £12,5000 without authorisation.


However, he is right about it being an emotive issue and certainly this scandal will make it more so particularly with British Waterways' front line staff. They suffered pay freezes, cuts to pension benefits and redundancies last year. British Waterways directors have awarded themselves large bonuses and now it is found that those bonuses were not sanctioned.

Will Evans and Hales resign or will they try and tough it out. Certainly the scandal poses the question are the pair fit to lead British Waterways as a charity? Or were they fit to lead British Waterways in the public sector?