Examination of Witnesses (Questions 60
- 79)
MONDAY 26 FEBRUARY 2007
MR CHRIS
FOLEY AND
MR STEVE
HOLLAND
Q60 David Lepper: So the current
financial pressures on British Waterways may lead to them making
some decisions, particularly as property owners and developers,
on a short-term basis rather than thinking strategically, as you
would hope they would, in terms of the regeneration of an area?
Mr Foley: Yes.
Q61 David Lepper: Could you give
us an example or two, if you are aware of any, where the tensions
between the different roles of British Waterways have had a negative
effect on a particular regeneration project or scheme?
Mr Foley: Looking back, certainly
with the Cotswold Canal, where my understanding is that there
it took a lot of discussions over a long period of time to get
BW to be prepared to put money into that scheme. My understanding
is that initially they were not proposing to put any capital into
that particular scheme because it was not seen as a key part of
the network, and it took, as I say, a period of time and discussion
to get them to change their minds. What the factors were behind
that I do not know.
Mr Holland: I do think the current
financial arrangements have had quite an impact personally. Droitwich
Canal is a good one where the agency agreed to fund £3 million
towards the cost of the works. It took us nearly 18 months to
agree the milestones and outputs that we were going to get. It
took an awfully long time. Within the business at the moment there
are an awful lot of divisions in terms of business divisions.
I had a meeting last week with them, thinking it was going to
be a one-to-one, and somebody from Footpaths turned up, and somebody
from Bridges turned up, and somebody from Estates turned up. Very
many people come along from different parts of the organisation.
The biggest thing that we seem to find locally at the moment is,
due to the current funding situation within BW, there is a huge
inability to be able to absorb project development fees, for want
of a better expression. You have to speculate to accumulate but,
because there is such a tight purse string drawn on the resources,
those funds do not seem to be available, and the strategy that
appears to be being adopted in some parts of our patch is very
much "We can only look at short-term projects in terms of
short-term revenue generation," rather than ideally what
we would like to be looking at of comprehensive redevelopment
of some of these canal-side locations over the next five to 10
years.
Q62 David Lepper: As well as financial
pressures, can I come back to the first question which I asked
about the multiplicity of functions and roles of British Waterways?
Is there any one of those functions which you feel would be better
carried out by some other organisation, existing or to be dreamt
up, particularly with the financial pressures on them? Should
Defra be taking something away from them and putting it somewhere
else?
Mr Holland: I do not know if ISIS
has come into the equation. That would be quite interesting. It
either has or has not worked in terms of that relationship with
British Waterways and in terms of bringing some of those sites
out of their portfolio and putting them into the other pot. I
am not sure if that has come out of your discussions.
Q63 David Lepper: Just remind us:
ISIS, as a partner organisation and arm, has existed for how long?
Mr Holland: Four years.
Q64 Sir Peter Soulsby: If I could
follow on your answer to David Lepper's question about the impact
of the funding reductions and the grant reductions from Defra,
you have perhaps to some extent answered the question, but what
are the impacts that are being noticed by those who are having
to work in partnership with BW? Is it just the short-term nature
of their thinking as a result of it or are there other aspects
as well?
Mr Holland: The really big impacts
I do not think will be felt for quite a long time. I really think
the impact is going to be very much in the long term, not the
short term. We are also seeing short-term impacts now but the
actual impact of the cuts will be longer term.
Q65 Sir Peter Soulsby: What do you
fear?
Mr Holland: We are having issues
at the moment where they just do not have the resource to develop
projects. That is a big issue.
Q66 Chairman: Is that existing projects
or is that new, potential projects?
Mr Holland: I think it is both,
Chairman, which I think is a great concern to all of us, obviously
particularly to them. Long-term maintenance, big-ticket items
of maintenance will obviously be of concern to them; certainly
locally, the restructuring, they have been very keen to deal with
it. There has been a big restructuring, 50 posts were lost, I
think it was a £2 million saving a year. They are looking
to put that sort of cash into projects/works on the canal. I think
the issue is, with the sort of cuts that are there, they are going
to struggle to maintain the standards that they have built at
the moment.
Q67 Sir Peter Soulsby: Do you think
this argues for some different financial framework for British
Waterways?
Mr Foley: I think certainly a
clarification would be helpful in terms of perhaps differentiating
between the operational side, which has its own set of day-by-day
pressures, and the regeneration and the development side, which
is a different kettle of fish. As we have said already, it is
much more about a longer term, 10-20 year horizon on these things.
We all know how long major projects take to get themselves to
a point when they actually start to come on site and start digging,
as it were, and it does require that long lead-in, and it requires,
I think, pump-priming money in terms of the initial things that
Steve has just been talking about, the feasibility money, if you
like, and certainly that is something that we have put into a
number of schemes, and quite significant amounts. I think we put
in—and I am not quite sure of the precise figure -something
in the order of over half a million pounds or so into feasibility
work on Cotswold Canal over a fairly lengthy period of time but,
as I am sure you are all well aware, on major bits it is fairly
easy to run up those sorts of figures, and quite justifiable to
do so in order to be able to be clear about what you are getting
into, what the risks are, how you mitigate those risks, and how
you can deal with the 101 issues that are implicit within that
type of development. I think having something within BW that says,
"This is an area we can call on for that funding," and
not feeling that it is always being pulled into the other areas,
particularly where you get the budget cuts, as we do now, would
have to be helpful.
Q68 Sir Peter Soulsby: It does strike
me that the sort of things you have been talking about as being
important that BW is resourced and able to be effectively engaged
in have little to do with the core responsibilities of its parent
Department, as it is at the moment. Is that a fair observation?
Mr Foley: I suppose one could
look and say "Where does it best sit?" I am not sure,
again, the I am best suited to answer that particular question.
Q69 Sir Peter Soulsby: It is true,
is it not? The regeneration issues you have been talking about
really are not central to the concerns of Defra.
Mr Foley: Yes, I think that is
probably correct.
Q70 Mr Jack: You have expressed concern
about the impact that the cuts could have on the effectiveness
and development potential of projects coming from British Waterways
and therefore it will have an impact on what you, as bodies concerned,
amongst other things, with regeneration can achieve. Given that
is a problem, have you made representations to Defra about this,
or to the DTI? Who in Government knows what the downside is in
development terms of these cuts?
Mr Holland: Certainly locally
we are trying to address it with management. Whether a formal
approach has been made to our governing Department or not, I genuinely
do not know.
Q71 Mr Jack: So the answer is you
do not know?
Mr Holland: I personally do not
know.
Mr Foley: No.
Q72 Mr Jack: Is there any way you
can find out? You have communicated to us in your evidence; you
have said the grant reductions have the potential to have a negative
impact on the way that British Waterways is able to operate and
potentially jeopardise projects which require investment by British
Waterways. Some of those, you have just given a clear exposition,
have a regenerative effect in the areas that you respectively
represent. I would have thought it was worthwhile making a bit
of noise about that, was it not?
Mr Holland: As I say, a lot of
this has happened quite recently. Whether we have collectively
been giving it a period of months to settle down, I genuinely
do not know but we can certainly find out and ask the question.
Q73 Chairman: In a way, this whole
area of regeneration is a four-way partnership between yourselves,
BW, local authorities, and indeed the private sector. I think
we would be quite interested to know what noise is coming from
yourselves but to some extent you are also going to be having
the ear of the private sector, because if the private sector has
decided it is to prepare to put some serious money into canal
redevelopment, or rather canal-side redevelopment, it stands to
catch an early cold if there is either delay or a shortfall in
the public sector commitment. If, as Michael says, you know of
or could put your finger on what sort of noises are coming loud
and clear from either yourselves or the private sector, we would
like to hear that. I have not been overwhelmed yet by the private
sector saying this is a disaster area because of the public sector
not keeping to its earlier commitment.
Mr Holland: Certainly, if you
look at some of our bigger areas, Birmingham, Coventry, a lot
of the people British Waterways have got on the ground in terms
of dealing with private sector development schemes coming forward
are very, very commercial. They certainly drive the hardest bargain
possible for British Waterways in terms of securing their pound
of flesh, for want of a better expression. I think the problem
is it may be more of an impact on us, on some regeneration-type
schemes where we are tending to take a relatively longer-term
view, maybe 5-10-year term projects, which a lot of these projects
take to deal with the London Assembly, driving them forward. It
is that sort of up-front potential delay. I think that is more
where we are concerned, rather than some private sector developers
who have schemes on the ground, ready to go chase adjacent to
the canal with BW because they know they are going to get cash
out of that pretty quickly, they would put resource on to that.
Q74 Mrs Moon: I am intrigued by the
tensions between British Waterways and local authorities that
we have had fed to us in some of the responses that we have had,
where some people feel that British Waterways will push forward
developments that are not necessarily in the interests of local
people. Equally, there are those that say British Waterways tries
to engage with local planning authorities and the local planning
authorities do not understand the needs of British Waterways.
Local authorities have a multiple set of needs and aspirations
for its local people to meet, many of which are reflected in the
myriad of uses that British Waterways has, including the walkers,
the anglers, the boat owners, the property developers, the housing
needs of the local authority, the environmental groups, all of
those. What is your view of that dynamic? Do you see it as a positive,
two-way communication or is there just no understanding about
the responsibilities and pressures of each other?
Mr Foley: I think it is very variable,
that in some areas, on some schemes, if you like, there has been
excellent working and certainly what we, as RDAs across England
have found in terms of preparing for this is that there are some
very good examples of working with the local authority and it
has worked extremely well. Equally, there are comments that have
come back that have said how it has been dire, and that reflects
what I was saying earlier on, that so much depends on who you
get and where you are. Some things work very well; other things
do not work as well as you would like to see them go.
Q75 Mrs Moon: But is that dire relationship
in those local authorities where we already know there is a dire
planning department or is it that you can get a really good planning
department that just cannot have a constructive relationship with
British Waterways? Where is the problem coming from?
Mr Foley: I think the comments
that I was getting were that BW is good in places but not right
across the board, and again, that is no different to many organisations,
I guess. I have not looked at it from the point of view of was
this a local authority that was good or bad, as it were, in planning
or any other function.
Q76 Mrs Moon: So you feel that the
communication breakdown comes from British Waterways in some regions?
Mr Foley: No, I am only saying
that I have only looked at the question of how does BW get on
with it, not the other way round to see whether or not fault might
be apportioned to the local authorities or whether they were poorly
performing or whatever. We did not look at it like that.
Mr Holland: Again, as always,
it depends on who you are dealing with within any organisation,
both planners and British Waterways. British Waterways have a
finite asset base. They need to maximise the money they can generate
from their assets. That will often put them in conflict with some
local authorities, both public sector organisations working together
but BW have to maximise the value from that asset, which may often
be at odds with what the local planning authority want to see
developed as part of that sort of scheme.
Q77 Mrs Moon: Equally, the local
planning authority may be having pressures from organisations
who are involved in heritage and do not want an old site to be
developed or may want aspects, as we heard previously, of that
site to be conserved. Equally, you might have a local opposition
group who do not want further development in that area, or indeed
the leisure services department might have a utilisation that
they want. I just wonder whether or not there is an understanding
between the two that perhaps their perspective on a planning application
might not necessarily be as simple and as obvious on both sides.
Mr Holland: With every single
development project there are always going to be those who want
it and those who do not. It would not matter whether it was British
Waterways as the land owner, it could be us as the RDA, it could
be a private sector development partner. Those frustrations will
always be there, I am afraid.
Mr Foley: I could understand that
BW, with fixed assets, fixed location, it is not like a private
sector organisation that can pick and choose where it may buy
its asset or just put it back on the market and say "I could
not make that work. I will get rid of it and look for something
that is in a better location." It has the hand of cards that
it has been dealt, as it were, which inevitably means it will
have some quite difficult things and will quite often perhaps
find that it is running up against other policy. Again, perhaps
more from the RDAs' perspective than the local authority point
that you were making, we are certainly keen to work with the grain
of the things that you were talking about, particularly the heritage
point. That, after all, is one of the key aspects quite often
of these developments and something that makes it worthwhile going
into. In Gloucester, for example, one of the key aspects there
is supporting heritage, working to bring it back, because quite
often that heritage is in a pretty ruinous state. On the one hand,
that comes quite often with a very high price tag but it does
mean that you have not then got, as it were, a street that could
be anywhere. It does at least reflect and be something that is
local, so we would hope to be able to do those things but it does,
for all of us, put the price tag up.
Q78 Mrs Moon: Waterways also go through
quite a large area of countryside and there are a whole other
set of tensions there from farmers, the environmental lobby, as
well as the fisherman and the walkers and the bird watchers and
what-have-you. Those are added tensions.
Mr Foley: I suppose they are tensions
but they are opportunities as well, in that you can try to find
that common ground so that all parties can hopefully benefit from
these things. Finding that common ground may be pretty difficult
at times; I certainly do not deny that but it does have that opportunity,
I think.
Q79 Mrs Moon: Is British Waterways
good at finding that common ground?
Mr Foley: I would come back to
what I said before, that it is variable. In some instances I think
they have done an excellent job. In others, it has not been as
good because the focus has not been there or the word has not
come down and said that that is important and therefore we need
to spend that extra time, go that extra mile, because it is a
long-term thing and it does take time. It takes time to establish
relationships, to gain trust, and quite often all of us find that
that difficulty of being able to sit down and communicate and
be believed is the most difficult thing to establish; it takes
the longest. You start with everybody has their preconceptions
and whatever hat you happen to be wearing, "Oh, well, you
would do that, wouldn't you?" and trying to get beyond that
to say, "Well, actually yes, there is a genuine desire to
put together whatever this project is. These are our constraints,
these are our opportunities. What are yours, and how do we mesh
those all together?"
Chairman: Gentlemen, you heard what I
said earlier. What you have said cannot be unsaid. It is on the
public record. I know we have sought some additional information
from you: Mr Jack's point about whether there is some level of
discussions further up the chain, and I also asked about the issue
of noise from the private sector as well as RDAs on the current
state of cuts which Defra have imposed on BW. It would be useful
to get that information in a written form so that we can include
it as part of the inquiry. Can I thank you for coming.
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