Memorandum submitted by the Association
of Waterways Cruising Clubs (AWCC) (BW 18)
EXECUTIVE SUMMARY
The Association of Waterways Cruising Clubs
(AWCC) represent the interests of over 20,000 club boaters. We
are the "self-help" people within the boating fraternity.
We are concerned with the social aspects of boating and the affect
that reduced Grant-in-Aid (GIA) will have on retired people on
fixed income and the ability of the young to enter the sport.
We summarise our comments to you as:
— Good and effective relations are
maintained with British Waterways (BW)—it represents a steady
improvement, which we anticipate will continue.
— The Public Corporation framework
is appropriate for BW, given more flexibility.
— Continued cuts in GIA will have a
cumulative effect upon cash flow and maintenance and place unreasonable
pressure on licence fees.
— GIA as a long-term funding arrangement
for BW will always be susceptible to political pressure.
— Future development, and enhancement
by Government, of the BW property portfolio is essential to maintain
adequate third party funding.
— More third party funding could be
obtained by seeking co-operative arrangements with other public
bodies, such as English Partnerships.
— The necessary re-organisation of
the navigation and leisure function of the Environment Agency
(EA) will have consequences upon the long-term funding arrangements
for BW and should not be ignored.
— The inland waterways of the UK are
an "undervalued", yet important leisure and tourism
asset. There is a lesson to be learned from the Irish experience.
Our recommendations to government are:
— To give BW more freedom and flexibility
to develop the public corporation structure.
— To provide BW with a long-term contract
for maintenance of public assets.
— To help BW generate more income by
endowing them with more property.
— To allow BW to form a property development
partnership with English Partnerships.
— To review the status of the EA Navigation
and Leisure Function and allow them to work as an independently
"Next Steps" Agency, or give the function to BW.
— To reaffirm the messages in Waterways
For Tomorrow, to recognise the primary role of inland waterways
as a major part of the UK's leisure and tourism industry and to
show a continued commitment, thus restoring confidence in those
who invest in it at home and those who visit from abroad.
INTRODUCTION
1. The Association of Waterways Cruising
Clubs (AWCC) exists primarily to foster the interests of cruising
on the inland waterways. We have a direct interest in the continuing
regeneration and development of an integrated system of waterways
in the UK and its organisation through the major Navigation Authorities
(NAs). We are an Association of over one hundred cruising clubs
with more than 20,000 affiliated members. We represent the interests
of self-help people within the boating fraternity and promote
our cruising aims through a policy of mutual assistance exercised
through our clubs. We enter consultations and negotiations with
British Waterways (BW) and the Environment Agency (EA), and other
bodies at national, regional and local levels. We join with other
national waterways user associations as an Associate Member of
the Parliamentary Waterways Group (PWG). The AWCC has a positive
view of the future development, maintenance and use of the waterways,
which we expressed before the previous Select Committee inquiry[1]
in 2001. We would now like the same opportunity and offer the
following in initial written evidence.
USERS RELATIONSHIPS
WITH BRITISH
WATERWAYS
2. The AWCC pursues a policy of positive
engagement with BW and the other NAs. We maintain good and effective
professional relations with the Chairman, Chief Executive, the
Board and executive staff of BW through a series of national,
regional and local meetings. We also participate in regular ad
hoc meetings to discuss specific topics. For example, we recently
met with the Chief Executive and Marketing Director, together
with IWA and NABO, for an update on funding. We have a former
BW Chairman (Sir Frank Price) as our senior Patron, who maintains
a close interest in the waterways and AWCC.
3. The British Waterways Advisory Forum
(BWAF) is a recent example of how effective consultation with
BW has been greatly improved. Together with other National Chairman,
I participated in the formation of this forum under the chairmanship
of Prof. Jeffery Jowell QC, and have contributed to its discussions
since. The chairman of the forum is elected from within the user
and trade community, with BW Board executive and non-executive
members attending the six monthly meetings. It has started a process
of intelligent discussion of major strategic and policy issues,
such as funding. I have personally ensured, via the intermediate
agenda meetings, that the subject of third party funding and development
of the property portfolio has been addressed at a full meeting.
There is clearly still some way to go in the development of the
forum to make it a fully effective policy advisor to the Board,
but AWCC is pleased by—
— the effort that BW put into achieving
its foundation;
— the commitment of, in particular,
the current Chairman and Chief Executive to making it work; and
— by seeing that it provides an opportunity
for achieving greater consensus within the user community, leading
to a more effective forum.
4. It is clear to us that BW put a great
deal of effort into consultation with users, the trade and the
wider public—maybe more than any other public body. Some
of this is more effective that others, but user bodies such as
AWCC will continue to try to improve effectiveness, as it is in
everyone's interest to do so. Consultations with other NAs often
appear less effective.
FINANCIAL FRAMEWORK
OF BRITISH
WATERWAYS
5. The creation of BW as a Public Corporation
in 1999 was a massive step forward in encouraging business management
freedom and allowing financial flexibility to tackle years of
neglect of the inland waterways system. It has attracted new executives
with business skills to join BW and encouraged existing staff
to tackle their work with an ethic of both business and customer
service. This action of foresight in creating the new framework
retained the fundamental reliance on Government grant for a large
part of its income, given that the freedom to raise money and
generate third party income now exists.
6. We believe that it is a sound means of
holding these multiple use public assets that comprise the inland
waterways, given that it is further developed to suit BW's role,
with greater powers to invest and raise money. The AWCC would
like to see the long-term improvement of the "third stream"
of funding to both BW (and the Navigation and Leisure Function
of the EA) in order to reduce their dependence on potentially
variable government grant. BW has the real opportunity in the
long-term to improve the sympathetic management of their property
portfolio for the benefit of the waterways.
7. GIA given to a public organisation by
government recognises the provision of a public service, the cost
of which cannot be recovered at the point of use. It is fair and
reasonable that payments for such services should come from taxation.
There are many example of this type of service within BW. The
increasing number of walkers that come to simply stroll along
the towpaths, to watch the boats and to enjoy a waterside meal
is maybe the best illustration of both success and the need for
public maintenance money to provide safe and attractive access.
For example, it was reckoned that nearly 300,000,000 visits were
made to the inland waterways in 2005, over one third of these
to walk and enjoy the ambience. Boater numbers are very small
in proportion and they could be forgiven for feeling that they
are now required to pay a disproportionate amount for system upkeep.
GIA is appropriate for the funding of maintenance as a public
good. If it is cut, there will be a debilitating effect on maintenance
and unreasonable pressure on licence fees and those in society
least able to pay, eg the retired on fixed income and the young,
for whom lower access charges should apply. AWCC's approach to
boat owning is called "The Third Way" and aimed at keeping
costs down.
8. The history of the restoration of the
canal network has been forged by the commitments of volunteers
both physical and financial. Many of AWCC's older members helped
create and develop club moorings and facilities on derelict land.
They will feel betrayed and their efforts wasted if funds for
ongoing maintenance are not to be made available. In these circumstances,
it would not be surprising if they withdraw their support for
ongoing restoration and regeneration schemes and leave the waterways
scene somewhat embittered.
9. It is clear to the AWCC that every pound
of public money spent on inland waterways returns many more to
the UK economy through urban and rural regeneration and restoration
projects. The reinvigorated waterways have stimulated growth in
waterway-related businesses, multiplied economic and social benefits
for local communities throughout the country and boosted a thriving
voluntary sector. Central Government funding also produces confidence
and financial leverage with other bodies such as the regional
development agencies. Unexpected cuts in grant will reduce confidence
in waterways' projects and it will put future regeneration at
risk. This should be viewed together with all the millions invested
by the Heritage Lottery Fund and the millions of hours freely
given by volunteer labour on restoration and care of the waterways.
10. Public money is appropriate, but grant
will always be the subject of political pressures and the consequent
variability that results. A chief executive that suffers an in-year
cash flow problem because of his own errors or omissions may be
rightly criticised, but one who has vital cash removed by a government
department will be understandably upset. The reduction of planned
maintenance has already been and will clearly continue to be the
first to suffer. The short-term solution that we propose is that
the DEFRA grant is replaced by a cross department service contract
to maintain assets that have use by a wider public, funded by
relevant departments and/or a precept on local authority rates
via a Treasury block adjustment of the rate support grant.
11. In the longer term, the financial freedoms
given to BW within the public corporation structure should be
reviewed and loosened. BW should be enabled with a greater borrowing
ability and given a more flexible approach to the management of
their property portfolio, with powers for greater co-operation
with others in the investment in property and raising of third
party income. The search for innovative ways of achieving extra
income must be continued. Our expanded views are given below.
STEWARDSHIP, WORK
AND COMMERCIAL
ACTIVITIES OF
BW
The Property Portfolio
12. BW already has a substantial property
portfolio, which they inherited from their days as a nationalised
industry. It is varied and largely an accident of history. It
has been enhanced by government in recent years; eg the West India
Docks. The BW Commercial Director recently gave a presentation
to the BWAF on this subject where he explained the current development
philosophy aimed at providing a future stream of income to support
the corporation's waterways activities. The direction described
the need to buy water-related property and to sell less appropriate
property with the aim of maximising income, but often within an
environment of a considerable heritage interest. James Froomberg
declared that he wished to run the property portfolio to a world
class set of benchmarks, both in terms of income generated and
all other standards.
13. The members of BWAF appreciated and
understood the approach described and took the opportunity to
set with James guidelines on how the portfolio should be managed.
For example:
— To ensure a strict demarcation between
capital and revenue.
— To examine novel ways to develop
historic wharves and boatyards to retain the heritage, to extract
profit and to engaged in planning gain agreements with local authorities,
eg Section 106.
— The need to ensure a high level of
expertise within the BW Board and Executive.
14. The BWAF exercise helped to convert
sceptics, given that developments will be sympathetic, to agreed
guidelines and acceptable benchmarking, and that discussions with
those affected will come sooner. It is now an accepted way forward.
The question of how to enhance and further improve this activity
remains? We recommend that the portfolio of appropriate property
needs to be increased to a value of at least £1 billion and
that this should be done where possible from government sources.
We also suggest that a partnership with English Partnerships,
the Government's principal regeneration agency, could be used
to further develop the BW portfolio. The five key principles of
English Partnerships form a good match with what are the BW objectives.
We would encourage more partnering deals with regional development
agencies, local authorities and other public and private bodies.
15. Stewardship. Many valuable points
were raised in Sir Peter Soulsby's Adjournment Debate[2]
at the end of 2006. Bob Laxton (PWG Chairman) referred to a Monopolies
and Mergers Commission report, which stated BW "has to maintain
a 200-year-old canal system in a safe condition". It goes
on to talk about BW's extensive heritage and environmental responsibilities.
It concludes, "given the history of the system, it is unlikely
that that the Board can ever run its affairs on a wholly commercial
basis. It is therefore inevitable that British Waterways will
continue to rely on public funds for a significant proportion
of its annual turnover". These words provide a brief summary
of the problem with a fair indication that "the Board"
does take their stewardship role seriously.
16. The Work. The Rochdale Canal
embodies the dilemma faced by BW. The late Fred Dibnah reopened
it in 2002 to much applause, following a successful campaign to
raise £25 million from local authorities, the Northwest Regional
Development Agency, the National Lottery and other public bodies
for its restoration. BW then accepted the operation and maintenance
role, with assistance from co-operative local authorities. However,
two extremely expensive emergencies have since arisen. Their efforts
to regain through navigation have been considerable and much praise
is due to BW for having achieved it under difficult circumstances.
We are convinced that should this happen again, BW would not be
able to afford to reinstate failed structures and the canal would
close. This is not a unique situation and it shows the continuous
need for appropriate maintenance including technical asset assessment.
17. The EA Connection. It is difficult
to consider the proper funding needs of the inland waterways without
also looking at the EA, as they are the second largest inland
NA and an integral part of the system. The EA are constituted
rather differently to BW and are constrained on commercial activities.
The EA Navigation and Leisure function also desperately needs
a third funding stream to fill a growing financial hole. The solution
that we have put to Sir John Harman, with a deal of acceptance,
is to seek the full powers available under the Trading Fund Act
for "Next Steps" Agencies, to set up a fully functional
trading fund and to recruit the necessary expertise. This would
inevitable require a separate agency, or compartment of the existing
agency, to cover navigation and leisure. We suggest that such
separation would enable the function to be run on business lines,
it would allow the generation of extra funding from third party
sources and it would remove the dichotomy referred to in our previous
Select Committee Memorandum in 2000. If the Government feels uncomfortable
with such a step, the remaining practical solution is to transfer
the responsibility to BW, but this will require enhanced third
party money. However, given more commercial freedoms, navigation
may have a greater chance of success within BW, with opportunities
for more efficient operation and consistency of policies and approach.
LEISURE AND
FREIGHT
18. The AWCC has long supported the expansion
of both leisure and freight. We have argued for a more efficient
structure for the waterways (there are more that twenty NAs) and
for one countrywide licence. There are many popular spots, but
equally many that could see greater use, where more investment
may help. We support the freight objectives of WFT and
do not see this to be in conflict with leisure. Old wharves may
close, but new ones may open for today's niche markets. The new
one on the Paddington Arm in London is to be applauded. We would
encourage a greater diversity of use as part of a successful future
for the waterways.
A MESSAGE FROM
IRELAND
19. I recently had the opportunity for a
detailed discussion with Eamon O'Cuiv, the Irish Environment Minister,
who is responsible for Waterways Ireland, together with his Chief
Executive. It is clear that they both agree a seven year programme
that is then funded in full without fear of random reduction.
The programme is fully funded by government as part of a vibrant
and expanding promotion of leisure and tourism and in the knowledge
of the benefits that such an approach is bringing to an expanding
Irish economy. The two men are comfortable in each other's presence
and clearly enjoy promoting their product on diverse public occasions
in the UK.
20. The lessons that may be taken from the
Irish experience are:
— the framework and structure of the
business organisation of Waterways Ireland is secondary in importance
to the agreement with government of a firm strategy and programme
that is then properly funded; and
— the perception by government of the
availability of public money in this activity is related to both
the buoyancy of the economy and the determination to pursue agreed
policies.
THE WATERWAYS
FOR TOMORROW
PROMISE
21. We agree wholeheartedly with the White
Paper, which began by saying—
"The Government wants to promote the inland
waterways, encouraging a modern, integrated and sustainable approach
to their use. We want to protect and conserve an important part
of our national heritage. At the same time, we want to maximise
the opportunities the waterways offer for leisure and recreation;
as a catalyst for urban and rural regeneration; for education;
and for freight transport. We want to encourage innovative uses
such as water transfer and telecommunications."
22. Many other promises were made in the
form of policy statements. A Partnership with the People was promised
and the principle of developing the BW property portfolio was
accepted. It is time to confirm these strategic objectives, together
with a means of achieving them.
23. This memorandum encapsulates of our
thinking for creating a successful long-term organisation for
BW and the inland waterways. We would have pleasure in expanding
this evidence before the Committee and to submit supplementary
evidence as required. Copies of our previous submissions are available
on request.
Association of Waterways Cruising Clubs
January 2007
1 AWCC Memorandum to ETR Select Committee Secretariat
dated 28 September 2000. Back
2
Hansard record of Sir Peter Soulsby's Adjournment Debate, 6 December
2006 Back
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