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25 Apr 2007 : Column 289WH—continued
“well, here you have to decide whether you are going to believe the Chairman or the Chief Executive”,
and then quoted those figures. When he made the in-year cut, why did he not engage in the rigorous examination of British Waterways' financial situation, business plan and modelling, which he now claims he is doing, and why was that not done before, when the accounts were signed off?
In a written answer the Minister stated:
“As a matter of good financial management, DEFRA keeps its budgets and spending under regular review and challenge”.—[Official Report, 7 November 2006; Vol. 451, c. 1068W.]
Given the difficulties he claimed to have had in obtaining figures from British Waterways, does he think that DEFRA's previous reviews and challenges of British Waterways were not sufficient? It is no good him saying that it is about British Waterways having more money than it expected in 2002.
Why did it take the Minister so long to get the figures that he needed? He seemed to imply that British Waterways was being obstructive, but in the past few months there have been two Westminster Hall debates and he has also answered a number of oral and written questions. He has had plenty of opportunities to get the answers he was after.
In the Sub-Committee, the Minister was very critical of British Waterways’ financial modelling and the use of its predictions of a financial settlement from DEFRA over the next five years of RPI minus five. He described that as the worst possible scenario. That modelling gives British Waterways a £55 million reduction over the next five years. Can the Minister confirm whether that will be the case; and if he cannot, can he let us know when the decision will be made, and whether the comprehensive spending review is still on track to be concluded this summer, as he has previously asserted?
Sir Nicholas Winterton (Macclesfield) (Con): I apologise for not being present for the first part of the debate. I was attending a private Bill Committee upstairs.
The Macclesfield canal, which is part of the Cheshire ring, is an important facility in my constituency. I am picking up the point that my hon. Friend has just made. A member of the Macclesfield Canal Society has indicated that the cutbacks affecting British Waterways could well undermine the massive amount of voluntary help that is available to it because that help needs some top-up from British Waterways, although the sum involved is fairly modest. Is my hon. Friend concerned about that?
Bill Wiggin: My hon. Friend always makes excellent points, and that one is no exception. Many hon. Members here today have mentioned the importance and value of the contribution that those kind and generous people make to British Waterways because they love the canals. I shall say a little more about that in my closing comments.
My hon. Friend is absolutely right, and what is more alarming is finding out the facts behind the stories that we have heard from the Government so far. In the Sub-Committee’s evidence session, the Minister referred to a letter, which I think he said would take 20 minutes to read out. I just wonder whether he has given that letter to the Sub-Committee and whether it is in the public domain. I am sure that he has given it to the Sub-Committee, as he nodded helpfully. However, I do not know whether it is in the public domain; I have not been able to see it. I asked British Waterways if it would let me have a copy, but perhaps to protect its Minister, it would not pass one on to me, thus showing a degree of loyalty for which he should perhaps be grateful.
Was the Minister aware that British Waterways had already informed his Department when he accused the chairman and chief executive of deceiving him about BW’s plans? If he had the information, or if he was really suspicious about being deceived, why did he not take any action against those two people? He can do so. Alternatively, is it true that his Department had the information but he was simply not aware of it? I am sure that if that were the case he would not have made such strong accusations against British Waterways. He said:
“I slate them for not being transparent and saying when they found out they got it wrong.”
If he knew that the information was in his Department, will he apologise? It may turn out that he got it wrong. Is it true that he does not know what is going on in either his agency or his Department, and that as a Minister he does not have the control that he should have?
The Minister’s hon. Friends have suggested that he has lost control of his office, so will he apologise and get a grip? Does he recognise that the public, boat owners, canal users and taxpayers expect the Labour Government to run their Departments properly, and that when he goes to a Committee and admits that he does not know how public money is being spent, they have every right to be angry about his failure?
I must be careful not to push the Minister too far. It is far easier if my opponent is a Minister who publicly
admits that he has lost control of his job and then gives evidence to a Committee to prove it. I suspect that that is why people will vote Conservative on 3 May.
10.42 am
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Barry Gardiner): I congratulate the hon. Member for Lichfield (Michael Fabricant) on securing the debate. I am aware of his long-standing interest in our waterways, and of the particular importance of the Lichfield and Hatherton canal that runs through his constituency.
I welcome the opportunity to restate in a more accessible form my responses to the Sub-Committee of the Select Committee on Environment, Food and Rural Affairs on Monday evening. In fairness, this morning’s cries of outrage from the Conservative Benches were wholly absent during the 20 years when successive Tory Administrations refused to invest in the network, turning it into a dilapidated shambles, in stark contrast with the £542 million that this Government have invested during the past decade.
However, I pay tribute to many Members for their remarks, and in particular to my hon. Friend the Member for Leicester, South (Sir Peter Soulsby), whose knowledge of the waterways network is extensive and comprehensive, and to my hon. Friend the Member for Staffordshire, Moorlands (Charlotte Atkins).
My hon. Friend the Member for Leicester, South said that it does not need BW to organise a campaign to protect the waterways, which is absolutely right. People demonstrated because they care about the future of the waterways. My hon. Friend focused us, saying that the concern is about people’s confidence in the future of the waterways. That is precisely why I was not prepared to sign up to a long-term settlement with BW, as I was urged to do, until I could see clearly the way in which such a settlement would bring the network to a gradual, timetabled conclusion in steady state.
My hon. Friend the Member for Staffordshire, Moorlands asked us to conclude a long-term contract. Let me make it absolutely clear that I wish to do so, but on a clear and transparent basis where we know the required estimates of the network’s remediation and maintenance programme. Unless the estimates are clearly and properly articulated, it is neither possible nor right to conclude such a long-term contract.
I recognise that my evidence to the Sub-Committee came as a surprise to many hon. Members, who now seek further information. I do not intend to prejudge the Sub-Committee’s findings, but I am happy to set out my position more clearly. I put on record that the British Waterways management of our canal system has been a tremendous success. It has the ability and vision to continue to deliver public benefits, including leisure, recreation, tourism and—of paramount importance—regeneration, as many Members have said this morning. BW’s record speaks for itself: its canals and rivers are in better shape than they have been for 30 or 40 years.
Following 20 long years of under-investment, BW has in the past decade turned around the fortunes of the waterways. It has a strong track record in managing the waterways and its associated assets, and it has fostered excellent relationships with local authorities
and private sector partners. I want to see BW continue to build on that, using its property portfolio to increase its income in order to reduce its dependency on grants. I am confident that we have the right board, management, chairman and chief executive to do so. I had an insight into BW’s effectiveness and ability to engage in partnerships when I met a range of its development partners earlier this year.
It is clear from the weight of correspondence, parliamentary questions and debates just how much concern and interest there is in the fortunes of the waterways, and I wish to ensure that BW has sufficient resources to fulfil its statutory duties. To that end, I sought greater clarity on the strategy and financial projections that BW uses to work up its maintenance programme, notably its target of 2012 to clear its statutory maintenance backlog. Any well run organisation should set itself challenging targets, but they must be realistic.
I was surprised and not a little annoyed that, despite repeated requests, I did not receive the full information until last Friday evening in the form of a letter from the chairman and a spreadsheet setting out BW’s projections in 2002 against its actuals to date and its business plan for 2007-08 and 2010-11.
Sir Peter Soulsby: Will the Minister give way?
Barry Gardiner: I shall do so in a minute.
The information includes grant and commercial income, and both documents have been made available to the Sub-Committee. The table showed that by 31 March, Government grant in aid to BW was £8.8 million more than the projection in BW’s 2002 plan. It also showed that despite BW’s assumptions—some might say, pessimistic assumptions—about future grant levels starting next year, which it calculated on the basis of RPI minus 5 per cent. to show a £48 million loss of grant by 2012, commercial income over the same period was due to rise by some £78 million more than it forecast. That leaves a net increase in BW’s projected total available income by 2012 of £30.1 million—that is, £30.1 million more than it projected in its original plan. Despite that, BW no longer believes that steady state for the network can be achieved by 2012 and has revised its maintenance assumptions.
I should in passing pay tribute to the hon. Member for Leominster (Bill Wiggin), who set out clearly some of the critical questions that need to be answered. He did not make an unreasonable speech, but here is the critical point that I should like to make in response. What we discovered on Friday evening—in fact, what I received on Monday morning, as I was on ministerial business over the weekend—was that the revised maintenance assumptions now show that 15 per cent. of the assets will still be in classes D and E by 2016, instead of only 10 per cent. of the assets being in classes D and E by 2012, as we had previously been led to believe.
In his letter, the chairman advised that a number of factors other than grant would cause the target for the elimination of the backlog by 2012 to be achieved later than anticipated. Among those was the fact that no account had been taken of the wider population of BW’s assets that needed maintenance. Among those
assets are what the chairman referred to in his letter, which I have made available to the Select Committee, as the non-principal assets. He confirmed that BW’s calculations of the maintenance programme took account of the principal assets that needed maintenance, but not of the non-principal assets.
Sir Peter Soulsby: Will the Minister give way?
Bill Wiggin: Will the Minister give way?
Barry Gardiner: There is time, and I shall give way shortly.
A number of assumptions were made, not all of which have been borne out. They have meant that in BW’s view the 2012 target cannot now be achieved. It gave me no joy to receive that letter, although it clearly and unequivocally set out the information that I had requested for so long. However, the letter clarified that BW had underestimated the true cost of the maintenance and upkeep of the waterways in its original projections.
The fact that BW’s assumptions were wrong, however, is not the issue for me. We are talking about a highly technical, 200-year-old network and it is understandable that assumptions about the costs of maintenance can change over time. What caused me concern was that I had waited for the information for as long as I had. It should have been made available earlier, both to me and to stakeholders.
Sir Peter Soulsby: I thank the Minister for giving way, but we are again experiencing a muddying of the waters, with confusing figures that do not answer the concerns that we have expressed here and that others have expressed outside about what he is going to do to restore confidence in the future of the inland waterways. He has told us that he was surprised and annoyed that BW did not provide him with the information before last Friday, but how many times over the past six months has he met the chairman and chief executive of British Waterways to demand those figures?
Barry Gardiner: I have met the chairman and the chief executive, I have had telephone conversations and there has been correspondence between our offices. I cannot tell my hon. Friend how many times I have asked for those figures, but I assure him that on many occasions I have specifically requested the timetable and the assumptions upon which BW could move to steady state.
Sir Peter Soulsby: Will the Minister give way?
Barry Gardiner: I shall of course give way in a moment.
As my hon. Friend will appreciate, the important thing is that we have clarity about an end point, when all of us can be satisfied. I wish to move further in my remarks and to address the points that he made about what is going to happen, because that is the important issue. However, I have on many occasions asked for clarity on the timetable and on the assumptions on
which steady state could be achieved. I had not, before now, received the information that 15 per cent. of the assets would still be in classes D and E by 2016.
Sir Peter Soulsby: Hon. Members will have noted that the Minister did not answer my question about how many times he had met the chairman and chief executive of British Waterways over the past six months. If the Minister’s assertion that he was surprised and annoyed when he finally received the figures is to have credibility, he needs to demonstrate to us that he made some serious attempts to get those figures from British Waterways. Crucial among the actions that we might expect him to have taken would be to have met the chairman and chief executive to demand those figures.
Frank Cook (in the Chair): Briefly.
Sir Peter Soulsby: The Minister can correct me if I am wrong, but is it not the case that over the past two years he has met the chairman and chief executive on precisely two occasions?
Barry Gardiner: I am absolutely confident that I can correct my hon. Friend on that score, because I have met the chairman and chief executive on more than two occasions. However, as I have already promised the Select Committee, I shall make available a full audit trail of the requests by my Department to British Waterways, as the hon. Member for Leominster requested, so that the Sub-Committee can see for itself the requests that have been made on the matter and my insistence that there should be clarity about how the network can move to steady state.
To be clear, I have not sought to evade my hon. Friend’s question at all. I have met the chief executive and the chairman of British Waterways on many occasions over the past year—not the past two years; I have not been in this post for that long—and my Department has been in correspondence with them to seek precisely the clarification that I have outlined to the Chamber today.
Bill Wiggin: Will the Minister give way?
David Tredinnick: Will the Minister give way?
Barry Gardiner: I shall press on, but I shall try to give way before the end.
Now that we have more transparency over the true cost of the upkeep, I am confident that BW and I can work together to agree a way forward that will manage the waterways in a sustainable manner, which will include gaining greater self-sufficiency. I look forward to sitting down with the chairman in the coming days to discuss the issue further, which my office has already been arranging with his. Let both sides stop belabouring the problems of the network that divide us and explore the single problem that unites us: how to construct a viable and vibrant future for this national asset.
BW has been a success story over the past 10 years. My discussions with Robin Evans and Tony Hales over past months have given me an insight into the tremendous contribution that British Waterways makes to the public good. That must now be our focus, in order to ensure that the success story that BW has been over the past 10 years continues.
David Tredinnick: My concern is about safety at Shenton, which I raised. Notwithstanding the cuts, I wonder whether the Minister might not make provision for special operations where safety is affected.
Barry Gardiner: The hon. Gentleman and others asked about specific problems in their constituencies. I am happy to write to all those who have raised specific concerns, whether they be those that my hon. Friend the Member for Staffordshire, Moorlands raised about Caldon and Netherton or those that the hon. Gentleman raised. The hon. Member for Lichfield spoke about the Grantham canal, which he said had been closed as a result of cuts. The Grantham canal is in fact a remainder waterway, part restored, but there is an active partnership to continue developing it with BW. However, I should be happy to write to him and to pursue such matters, although they are of course issues for BW’s programming, and it is appropriate for BW to make priorities within the network.
Bill Wiggin: The Minister told us that 15 per cent. of assets were in classes D and E and would remain there until 2016, instead of 10 per cent. being in classes D and E by 2012. What will be the bill to shift those assets, how many of them were principal assets and is RPI minus 5 per cent. still—
Frank Cook (in the Chair): Order. We must proceed to the next topic for our consideration.
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