Examination of Witnesses (Questions 406
- 419)
MONDAY 23 APRIL 2007
MR BOB
LAXTON MP AND
LYNDA WALTHO
MP
Q406 Chairman: Welcome, everyone.
This is the latest and the last session we are taking on BW, unless
we consider otherwise, and it is a delight to have two of our
colleagues before us. We have Bob Laxton, who is the Chair of
the Parliamentary Waterways Group, and Lynda Waltho, who is the
Treasurer. If I could start, how much damage have the cuts caused?
This is a group which were asking to give evidence to us and which
is very active within Parliament. How much damage has this current
situation caused and how much ill feeling is there out there?
Mr Laxton: What I would like to
do, if I may, Chairman, is a little bit of scene setting. I have
a fairly brief contribution to make, and then perhaps I could
deal with that question. Can I first introduce my colleague, Lynda
Waltho, who is the Treasurer of the all-party Waterways Group.
She holds a seat in Stourbridge which many of you will know is
an historic canal centre, and has far more experience than I do
with regard to the canal system around particularly Birmingham,
commonly known as the BCN. I am the Chair of the all-party Waterways
Group. To give you a very brief background, 40 or 45 years ago
I owned my first narrow boat and I am the proud owner of one at
the moment, with a rather classy vintage Gardiner engine in it.
I have only been the Chair of the all-party Waterways Group for
perhaps a couple of years but part of my background as well is
I am also President of the Derby and Sandiacre Canal Trust which
seeks to open Derby or Swarkestone through to the Erewash canal,
so I have some experience of funding and those sort of issues.
Just to give you a bit of background about the all-party Group,
members of the Group are MPs and peers; we are open to associate
membership from any organisation or an individual with an interest
in Britain's inland waterways. We meet round about five times
a year for one hour and focus on the strategic importance of the
waterways, and to raise awareness of these matters and identify
and explore possible solutions. The usual format of our meetings
is for one or two guest speakers to address a topic which is then
debated. Our speakers are usually Government ministers and chief
officers of navigation authorities or other organisations of interest,
and it is open to the members to request particular speakers.
We are a resource for MPs and peers on waterways issues, and a
consultant from time to time, and we also give advice to associate
members on how to communicate effectively with parliamentarians.
We do not have the resource, however, to undertake a great deal
of research, regrettably. Our submission makes reference only
to matters raised in our more recent meetings, current users of
the waterways network and their relationship with British Waterways.
There is a vibrant, and I mean a vibrant, body of voluntary user
groups covering every conceivable waterway use, feature and location,
and commercial interests are also well represented, evidenced
not least by the large volume and high attendance of representatives
amongst our associate members. Voluntary work in restoring and
maintaining waterways is an integral part of the post-war development
and more recent renaissance of our waterways, and there are numerous
local and national forums recently enhanced by the procedures
for consultation following improving openness and accountability.
On the financial framework of British Waterways and the impact
of changes in Defra's budget, if I could refer the Committee in
part to the Adjournment Debate British Waterways on 6 December—
Q407 Chairman: There is another one
this week.
Mr Laxton: Yes, taking place on
this Wednesday—Hansard Vol. 454 Col. 112 Westminster Hall
to Col. 137 Westminster Hall, and this includes the key points
and local details from some of our members. The Waterways that
British Waterways manages for the nation are a 200 year old transport
system with industrial technology of that era. Maintaining this
is essential and to some extent unpredictable, I would say, despite
the excellent surveying exercise undertaken in recent years and
the substantial inroads made into the maintenance backlog. This
is a national system with every component independent. I would
have to say, because the facts are irrefutable, that certainly
over the last 10 years the large injection of money from the Government
into British Waterways and, of course, money as well coming from
successful lottery bids has made a huge difference to the quality
of the waterways network, and I can speak with some experience
of that. Forty-five years ago, for example, staying in Gas Street
Basin one would be surrounded by dead rats and dead dogs in an
area of absolute abject decline, a really grotty place, and one
goes back now to find that it is a hub in the centre of Birmingham,
with all of the facilities and high quality surroundings. It is
an absolute eye opener, it really is. Expensive unforeseeable
emergencies will occur as evidenced by the breach on the Brecon
& Abergavenny canal on 17 January this year. The Netherton
tunnel, which Lynda may wish to talk about, in the West Midlands,
which is a key route through to ensure Birmingham and the Black
Country canals can be accessed and used, was to be closed for
inspection and repair this winter and the funding cuts have led
to this work being postponed. There are fears that when the inspection
does take place there may not be funds to carry out the necessary
structural work and the towpath is currently closed to walkers
and cyclists at present. There is much concern that one or two
events could lead to the rapid deterioration of the network and
the investment of recent years being wasted. Surface work such
as towpath enhancement also requires regular maintenance. MPs
have expressed great concern about the impact on much loved and
well used local amenities, and I have for the information of the
Committee prepared the response that we have had back from a cross-section
of MPs, both in a political and geographical sense, about their
concerns that they have raised as a result of the reduction in
grant aid to British Waterways. Members have also raised with
us concerns about the lack of funding for our waterways museums.
They are considered to be not supported in the way that other
national collections generally are, and whilst museums are managed
by the Waterways Trust, the Trust is in turn supported by British
Waterways in a number of ways. The reduction in Defra's funding
to British Waterways may lead British Waterways to reduce or remove
support to voluntary groups. Support such as professional assistance
with grant applications or administrative and health and safety
assistance at local events could go if British Waterways staffing
in such roles is cut, and this could be seen as a breach of the
public sector compact with the third sector. The much celebrated
leverage that British Waterways achieves with its urban and rural
regeneration projects is lost if regeneration can no longer be
supported as all funds have to be allocated to maintaining existing
resources. Confidence lost in projects due to the funding threat
could lead to large sums from investors being withdrawn completely,
and there will be a temptation to opt for a short-term property
development profit rather than take a long-term view of the waterways
network and its assets to make good any shortfall, and that perhaps
in part, Chairman, answers your earlier question, but only in
part.
Q408 Chairman: Can you bring it to
a speedy conclusion?
Mr Laxton: Yes. I was going to
briefly talk about stewardship work and the commercial activities
of British Waterways but I guess you have had that information
already or are likely to obtain it from British Waterways. There
is an issue about that, about how they handle their property portfolio
and how that generates much needed income into British Waterways.
There is an issue about the relationship between British Waterways
and central Government departments, regional development agencies
and local authorities. Again, 180 staff have gone from British
Waterways, or are on the way to departing from British Waterways,
and that is going to have an impact in terms of pairs of hands
even who will have to deal with regional development agencies,
local authorities and government departments. Can I finally say
that the waterways benefits and uses are cross-departmental but
few departments, it seems to the all-party Group, fully recognise
this. The group, however, invites ministers from a number of departments,
from Defra, the Department for Culture Media and Sport, and the
DCLG may be the most obvious, but the role in education, health
and trade should not be overlooked and even the Home Office should
take an interest. For example, the police run schemes for young
offenders to take up angling and these have been a great success,
so it covers a whole plethora of government departments and our
concern as the all-party Waterways Group is clearly what we have
seen already as the cut in funding. Defra will argue, I guess,
that it is going to be a fairly limited cut at this stage, but
we have to put that against the context or the background of the
Comprehensive Spending Review, and we have to take a view, and
the all-party Group would certainly take the view, that there
is a real danger that the lower level of funding received by British
Waterways from Defra is going to be a lower base upon which any
reduction in the Comprehensive Spending Review may impact, and
therefore there is a real danger that we can start very quickly
to see a downward spiral in the overall activities of British
Waterways, and that will impact gradually in the long term upon
the viability of the inland waterways and the canal network. As
I have alluded to earlier on the Netherton tunnel, for example,
if that proves to be prohibitively expensive to repair then that
would be a big substantial hit against British Waterways' total
financial arrangement, and if they decide to do that it could
be potentially at the expense of doing a lot elsewhere. Alternatively
they do not do it and, for example, then Lynda, my colleague's,
constituency on the canal network at Stourbridge is completely
cut off and just becomes a backwater and all that flows from that.
I will conclude at that. I have made some reference to the impact
that the damage has done already but the real concern of the all-party
Group is that we can see this downward spiral taking place and
a few big hits because of major breaches or tunnels collapsing,
et cetera, on a 200 year old system, and there is a certain
inevitability that will happen and consistently has happened over
the past, and will create huge problems for the canal network
and everyone who uses it and the millions of people who access
it every year.
Q409 Mr Jack: In terms of looking
for the future, what changes could be made, in your judgment,
to British Waterways' regulatory framework to secure some kind
of long-term stability for the waterways network?
Mr Laxton: British Waterways would,
on the one hand, say that they have been eminently successful,
and they certainly have, in generating far more income than perhaps
any of us would have expected from some of the development work
that has taken place alongside the waterways. We all have the
statistics. The valuation of property alongside water is generally
20% higher than property that is not alongside water, but quite
frankly who would want to develop an area for housing, flats or
apartments in a city centre if it was against the backdrop of
quite a pleasant canal there at the present time, but which if
the funding is not there is going to deteriorate and they are
going to see less boat usage, and that opportunity would go? So
I think British Waterways have been eminently successful, but
if the message goes out that there are likely to be problems in
terms of the overall funding package for the canals and the level
of maintenance is not maintained then we could see that disappear
fairly quickly.
Q410 Mr Jack: But have you given
any thought to evaluating, for example, some kind of longer term
arrangement that BW could negotiate with its sponsor department,
Defra, and equally the current structure of British Waterways,
because on the one hand it tries to combine the core activities
of running a canal network with also being a property development
company but with one arm strapped behind its back because it has
no borrowing capability. Do we need to see some changes in the
arrangement with the principal department and the core financial
set-up to give it an ability to be more flexible in the long term?
Lynda Waltho: There certainly
is a feeling within users of the canal system, and there has also
been a suggestion, that the assets could become part of a trust
arrangement with the whole of the assets effectively kept in trust
for the future, so there are all sorts of suggestions that come
forward from either commercial users or boaters or all the different
groups. So there is a lot of goodwill there as well with these
groups who want to make this work, but there is sometimes a feeling
that their suggestions are not necessarily looked upon as being
helpful.
Q411 Mr Jack: But do you as a group
have a preferred alternative model or option that you want to
put to the Committee?
Lynda Waltho: I do not know that
we have a preferred option. We just know it does not work properly
at the moment.
Mr Laxton: There has been an on-going
debate in the all-party Waterways Group about whether it is appropriate
to have Defra as the host department for British Waterways or
whether it would be more relevant for it to, say, come under the
Department for Transport, for example, or the Department for Communities
and Local Government. The all-party Group has not reached a clear
view on that, there is an on-going debate about it, and the argument
goes simply something like this, that if they had been in another
department they would not have to face the cuts they have as a
result of being in Defra, and that is certainly true, and I am
going to sit in afterwards and listen to the Minister and I am
sure you will ask him that, and it will probably be more appropriate
for him perhaps to take a view on that, but the all-party Waterways
Group has not reached a view and the debate continues.
Q412 Sir Peter Soulsby: Obviously
there has been discussion about whether Defra is the right department.
Another line of discussion has been whether there is some way
in which departments could together provide a degree of funding
for British Waterways to cover the very wide range of output that
obviously they deliver for other departments. Do you think that
is something that is perhaps worthy of further development?
Mr Laxton: I think it is worthy
of that but, as I say, the all-party Waterways Group has not taken
a view. We have had discussions with ministers, we have had some
discussions with Treasury ministers as well, and I think probably
that could be an avenue as a means of bringing some revenue stream
into British Waterways so that at least the network can be maintained
as it is, and hopefully improved, and certainly to keep on board
the development sector out there where I think there is still
a lot of untapped potential for British Waterways through its
property group. Michael, you made reference to whether British
Waterways could be restructured itself. British Waterways operates
through its development arm, Isis, almost a separate organisation
that deals with development, and from British Waterways' perspective
I can understand them doing that. They have literally thousands
of listed buildings, sites of special scientific interests—all
of those sorts of issues, and if they so to speak slung those
out to some development company that they did not have effective
control of, then we could find ourselves perhaps as a nation in
some difficulty. So, on the one hand, they have gone part way
down the road to separating their organisation to generate revenue
streams through Isis, whilst at the same time retaining that element
of control, and on balance my own view is that is probably pretty
sensible, and perhaps as far as they really should go.
Q413 David Taylor: In the submission
from the Parliamentary Waterways Group you talk about contingency
reserve, and in your earlier comments you mentioned the difficulties
of a 200 year old network sometimes with essential but unforeseeable
and unpredictable costs associated with the work that needs to
be done. Why do you think a contingency reserve might tackle that?
It would need to be a very large sum, and the Government is not
too likely to come up with that, is it?
Mr Laxton: I did not specifically,
with respect, David, make reference to a contingency reserve.
I think the real problem British Waterways have is they do not
hold a big pile of money sitting earning interest in a pot that
they can draw down, say, for the Netherton tunnel, where there
are old mine works underneath, the floor of the tunnel is coming
up closer to the roof, the level of water in the tunnel is reducing,
it could be a major job, what is that going to cost, is it safe,
they have closed the cycleways and the towpath, boats are still
going through, they are still doing an assessment of the costs
which could be 100,000, a million, several million, so where do
they find that money from? They do not have a contingency.
Q414 David Taylor: But how would
they find that? Are you asking the Minister to give a blank cheque?
Mr Laxton: No. I am saying the
situation is that British Waterways do not have that sort of contingency
to deal with those unforeseen problems, a big breach of a canal
that costs hundreds of thousands to repair which hits them out
of the wide blue yonder. They have to find that from within their
existing resources; they cannot programme the work and say they
will do it over the next two or three years; they have to do it
immediately and find that money, and it is a choice. Maybe one
of the choices might be with the Netherton tunnel, and they decide
they cannot afford it and therefore they close it, therefore that
cuts off the whole section of the canal. That is one of the hard
decisions they have to make, and if they had more money available
and a guaranteed income from Defra—which they do not have
now; the only guarantee is it is going to go down and down and
down—then that would increase the pressure on those hard
decisions they have to make.
Q415 Chairman: But BW in their evidence
to us raised the issue of self-sufficiency, that was not at Defra's
instigation, so how do you tie those two positions together? That
on the one hand Defra may be seen to be being unfair to BW in
the way they brought these cuts forward, but BW have a clearly
strategy?
Lynda Waltho: One great fear is
that BW are being bounced into that sort of view. Whether or not
that is the case, who knows, but that is where this idea of a
contingency grew from; it is that fear that they are taking those
commercial decisions when, in fact, really we should be treating
them as a public body effectively, and they are actually quite
different. So there is that fear of being bounced into these commercial
decisions that will not necessarily be the right decisions for
the canal network.
Mr Laxton: Can I say that, as
I understand it, the long-term position of British Waterways was
to continue to seek out of Isis and other organisations an increase
in their revenue stream so that over perhaps a 10 year period
they could withstand a gradual and programmed reduction in the
grant in aid money they get from Defra. The problem is they were
hit in-year with a step change in their budget followed by the
Comprehensive Spending Review which may end up with another step
change downwards in their budget, and they find that very difficult
to deal with. Any organisation would find it difficult to deal
with. If, on the one hand, they can say: "We can agree a
contractual arrangement with Defra that provides for steady downward
step changes in the budget then we can pick up the slack because
we can programme in increased income generation from within our
organisation"—fine, but no organisation is able properly
to contend with a state of affairs where in-year, out of the blue,
they get told "Sorry, the money you were expecting you are
not going to get now" and it has the potential only to get
worse over the next few years.
Q416 David Taylor: Can we move on,
now, to the relationship that BW has with its users and with its
customers? I think I heard you say earlier on, Bob, that the Group
were concerned that because of present financial pressures support
for voluntary groups would be cut. When we received evidence from
users and customers it was a little bit ambivalent. There were
some which were reporting concerns about lack of consultation
and sometimes conflict: others were much more positive. They described
good and effective relations and they exampled the Advisory Forums
as evidence that there was effective consultation with British
Waterways. Is that how you see it?
Lynda Waltho: British Waterways
have a responsibility to volunteers, and part of what they have
done is they get the ideas together, they get the people together,
and they support. I went through Netherton tunnel last Friday
with people who had managed to do the work to reopen the Dudley
tunnel to the Dudley limestone caverns, and they did that over
a period of I think 3-4 years every Saturday or Sunday, virtually
digging it out, and that has been supported by British Waterways.
There is such a lot of goodwill in terms of back-up and if we
are losing 180 staff, or whatever, we are also losing a lot of
experience. It takes a lot of years and bringing together of all
of that knowledge and goodwill, and I am afraid that is where
I am most concerned, particularly if I look at Stourbridge, where
once again it was volunteers that dug that canal out. That has
been established over many years and is at best shaky, if not
crumbling in some places now.
Q417 David Taylor: Do you sense that
the BW response to the staffing pressures that they are enduring
at the moment will be a sharp growth in volunteer activity? That
is not going to compensate or bridge any void left by government
parsimony, is it?
Mr Laxton: I do not accept that
it will. I do not accept the premise—
Q418 David Taylor: They have not
said that.
Mr Laxton: I do not accept that
reduction in funding will suddenly mean that out of nowhere a
whole host of volunteers will jump into the breach—literally,
maybe—and deal with the issues that British Waterways should
deal with. There are not people around with the technical expertise
and experience that was invested and remains invested in British
Waterways. There are 180 people going and they are not going to
be able to plug that. I have been involved for a number of years
and am President of the Sandiacre Trust, and I know how difficult
it is to keep building up, if you like, the enthusiasm of volunteers
to do this, so I do not accept the premise that all these people
would suddenly arrive. Can I say also on your original question,
David, about the relationship of the users of British Waterways,
it depends who you talk to. The Committee were down in Gloucester,
a place very close to the Chairman's heart, and I understand you
had "mixed views" from various people, some taking the
opportunity to have a go at British Waterways because they were
unhappy about their relationship with them. For my part, my boat
sits at a place called Sawley Marina, which is probably one of
the biggest British Waterways marinas in the country—
Q419 David Taylor: Which constituency
is that in?
Mr Laxton: It happens to be in
yours! North West Leicestershire, and the hon. member is one Mr
David Taylor, who more than adequately represents that area. In
fact, I know that his election literature gets on to people who
live on boats down there—it is quite remarkable!
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