Memorandum submitted by The Cotswold Canals
Trust
1. Executive Summary—The Cotswold
Canals Trust (CCT) deplores the way in which British Waterways
(BW) has withdrawn from the Cotswold Canals Partnership. Its action
has put £30 million of funding for the Cotswold Canals restoration
project at severe risk and is seen as a betrayal by those interested
in Britain's unique national waterway network. The current situation
highlights some deep seated problems in the direction that BW
has been going in recent years. CCT wants to see BW re-engage
with the Cotswold Project but we also believe that BW needs to
be made fit for purpose with a clear focus that concentrates on
the well being of our waterways in an inspirational way so that
confidence can be restored.
2. The Cotswold Canals Trust, a registered
charity, is the largest canal restoration society in the UK with
over 5200 members. Its primary objective is to bring about the
restoration of the historic Stroudwater Navigation and Thames
& Severn Canals which together link the River Thames to the
Severn. The Trust is a key member of the Cotswold Canals Partnership.
3. The restoration of the Cotswold Canals
is ranked near the top, if not at the top, of the priority list
by waterway bodies and enthusiasts alike. Its strategic place
as the missing link between England's two greatest rivers is unique.
4. BW's involvement as lead partner provided
confidence to both funders and the local community with the result
that expectations of early progress and success were raised. The
project successfully secured an increasingly rare major Heritage
Lottery Fund (HLF) grant of £12 million which enabled a funding
package worth a total of £35 million to be assembled.
5. BW's withdrawal at the beginning of February
was without notice to most of the other Partners, including CCT,
and has accurately been described as a "betrayal" and
"a kick in the teeth". One of our members made the following
analogy: "It's akin to the government saying " You know
what, I don't think I want to do the Olympics now, let's just
not bother"—after all the hard work, deals struck,
funding secured and already paid out—it's just not do-able
in any sense. Yet that is exactly what BW is trying to do."
6. In pulling out, BW have shown a reckless
disregard for businesses that have assumed that the project will
happen and have invested on that basis, the aspirations of the
local community for the restoration itself and resulting economic
regeneration and the views of canal supporters throughout the
country (many of whom have been campaigning for BW's own grant
to be safeguarded).
7. The other Partners are resolved to continue
the project and there is little doubt that both the technical
and financial capability exists to do this. However, in withdrawing
and saving themselves perhaps £3 million of their own money,
BW has put the other £30 million funding of the project in
severe jeopardy. BW signed the agreement with HLF as lead partner
and we have been told that is not possible to simply swap them
for a new one. HLF have indicated that they will require a new
grant application. The delay and uncertainty that this would cause
could easily compromise the other funding and set off a domino
effect resulting in the loss of the project.
8. BW has used the cost of repairing the
breach on the Mon & Brec Canal and the government reduction
in their funding as excuses to pull out of the Cotswold Project.
CCT does not accept these excuses for the following reasons.
(a) Even assuming that BW could not have
borrowed money, they have many assets, particularly property related
ones, and could have chosen to sell a small part of these to overcome
the Mon & Brec problem.
(b) BW seemed to be all too ready to pull
out of the Cotswold Project without fully exploring alternative
funding sources for the Mon & Brec problem.
(c) Long before the DEFRA funding cuts and
the Mon & Brec problem, BW had been showing signs that they
were not wholeheartedly committed to the Cotswold Project.
9. BW became involved with the Cotswold
Canals project hot on the tail of several spectacularly successful
but very challenging restoration projects including the Huddersfield
Narrow Canal, the Rochdale Canal and the Millennium Link (including
the Falkirk Wheel) in Scotland. David Fletcher was Chief Executive
and BW was a confident "can do" type organisation with
high staff morale, inspirational leadership and the ability to
attract third party funding and partners for both restoration
and commercial projects.
10. Following changes at the top of BW,
the attitude started to change. Whist still supporting the Cotswold
project publicly, investment in the all important project management
side of things frequently bordered on the non-existent. CCT warned
Robin Evans, in a meeting called for the purpose, of our concern
that a project of this complexity would degenerate into a mess
without proper project management but this warning went unheeded.
11. Coupled with inadequate project management
came a near obsession with risk and an unwillingness to get the
project moving. The minutes of BW Board Meetings in 2005 show
that they were anticipating the real possibility of pulling out
even then. This was averted by CCT demonstrating that it had project
managed the successful delivery of a road bridge using contractors
at a cost of £360,000 as against a BW consultant's previous
estimate of £830,000 (adjusted to 2005 prices). BW then conducted
an internal review of their previous costings and concluded that
the project could be delivered after all.
12. In January 2006, HLF confirmed their
grant to the Cotswold Canals Project and the works were expected
to be complete in 3 years. Incredibly, no project manager was
put in place until January this year; the same month BW decided
to withdraw. Instead, the intervening two years were occupied
by yet more risk reviews either centred around engineering costs
or lower potential property development returns whilst a small
number of relatively junior BW engineering staff struggled to
get the project going in the face of little support from senior
management.
13. Running in parallel with these problems,
BW has frequently failed to take advantage of the availability
of volunteers offering professional expertise in many areas as
well as those prepared to help in physical works. Although volunteers
often receive praise, the reality is that BW does not seem to
understand the Third Sector nor the considerable contribution
that it can make.
14. The attitude towards financial management
of the project has been poor. Concepts like value for money and
not treating contingency money as just another part of the ordinary
budget seem alien. In October 2005, CCT was told that putting
work at Oil Mills Bridge (the first one in the project) out to
tender was not possible because of the shortage of time so a BW
Omnibus contractor would have to do the job. The project actually
started in October 2007.
15. Delays in the project have wasted about
£3 million in inflation costs alone. For a long time now,
the biggest risk to the project has been the constant review of
risk resulting in the failure to get on with the job. The delays
have also put other time related third party funding at risk.
16. The Cotswold Canals Project remains
entirely viable, technically deliverable and remains highly desirable.
CCT and Stroud District Council working together are determined
to see the project through and it won't be hard to make a better
job of it. The biggest problem we face is keeping the funding
package intact. BW is perceived as the national body with all
the expertise needed to successfully restore, operate and maintain
canals; their withdrawal from any project can therefore have catastrophic
consequences. There is already evidence that future funders have
already been put off by BW's actions.
RECOMMENDATIONS:
1. Confirm to BW that restoration projects,
with the huge benefits they bring, are a core part of what BW
are expected to deliver.
2. Given the risk of losing £30 million
of other funding if they withdrawal, BW should be instructed by
the Government to re-engage properly with the project. It should
be made clear that they cannot simply decide to walk away from
their prior commitments, including signed agreements, in the way
they have.
3. There needs to be a massive change of
culture within BW to make it the inspirational, efficient organisation
championing the waterways of Great Britain it was becoming rather
than the risk averse, low morale, "can't do" organisation
that it has become. This is unlikely to be possible without some
changes in leadership.
4. BW needs to be able to engage with the
Third Sector and will reap financial benefits by doing so. A Board
level appointment of someone with attributes which include a background
of involvement in the waterway restoration movement would help
provide do this.
5. An urgent look at the way that navigation
authorities are funded should take place which takes into account
the benefits that waterways bring in terms of regeneration, public
health and economic activity which fall beyond the normal remit
of DEFRA.
The Cotswold Canals Trust
March 2008
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