Memorandum submitted by the Department
for Environment, Food and Rural Affairs
1. This memorandum updates the Committee
on Defra's work to follow up agreed recommendations to the 2007
Inquiry into British Waterways ahead of its one-off evidence session
to examine British Waterways' regeneration and restoration role.
FUTURE FUNDING/CSR
SETTLEMENT
2. Grant funding for British Waterways of
£56.624 million (plus £1.024 million towards the repayment
of the capital of a National Fund Loan) in 2008-09 has been confirmed.
We have maintained investment in the canal network at broadly
flat cash which reflects Defra's commitment to the waterways and
recognises the value of maintaining the integrity of the existing
BW canal network for delivery of a wide range of public benefits
including regeneration. This is the best that could be realistically
achieved for the waterways within a tight spending review and
competing priorities. We shall be finalising the position for
2009-10 and 2010-11 over the coming weeks.
DEFRA STRATEGIC
STEER ON
GOVERNMENT PRIORITIES
FOR CSR PERIOD
3. Defra understands the importance of its
role in sponsoring British Waterways as the custodian of the waterways
network on behalf of Government, which delivers a wide range of
public benefits including regeneration. Government acknowledges
the good work British Waterways does in maintaining and improving
the historic network for current use and future generations as
well as its involvement in regenerating communities through both
maintaining a vibrant canal network and developing its property
adjacent to the waterside. We also recognise that British Waterways
has to balance many different and competing priorities within
finite resources. For this reason Defra has set out a Strategic
Steer for British Waterways provides more detailed guidance on
government priorities and in association with this has agreed
a Deal to help strengthen our positive partnership with British
Waterways (both attached) and these documents were developed in
the last quarter of 2007, provisionally agreed in January 2008
and formally confirmed in February 2008.
4. The Steer advises that the three areas
for Government priority in England and Wales are:
(i) maintaining the network in satisfactory
order to deliver a wide range of associated public benefits;
(ii) achieving the shared Government/BW longer
term vision of moving towards greater self sufficiency;
(iii) delivering a range of additional public
benefits.
5. Government broadly favours (i) as the
first and foremost priority. We have agreed with British Waterways
that their main priority for the CSR period is to maintain a vibrant
existing network to enable public benefits dependent on it, such
as regeneration, to be delivered. Nevertheless we look to the
British Waterways Board to strike a balance between the objectives,
taking account of the costs and benefits, in deciding what British
Waterways can reasonably achieve against all three.
6. Apart from the regenerative impact of
a vibrant waterway network, Government fully recognises the potential
of specific regeneration projects to contribute to government
regional and urban economic development programmes as well as
sometimes delivering commercial income to help support the network.
Regeneration projects are mainly funded by external sources such
as grants from RDAs and local authorities, lottery funds etc and
involve many other partners. However, these grants are generally
only towards the capital investment required and do not help meet
the ongoing costs of maintaining any restored canals or new waterways
which need to be met by British Waterways.
7. Given maintaining the existing network
is our agreed main priority, Government supports British Waterways
restoration activities, only where there are overriding benefits
and where new cost streams do not compromise its ability to maintain
the existing network in good order. Although restoration projects
may bring regeneration benefits, there are ongoing costs to British
Waterways which need to be carefully assessed for affordability.
In addition, British Waterways often carries the risk of the project
when it acts as project manager (in the case of the Cotswolds
Canal Project, this had doubled to £6 million and could be
more). Whether or not to engage in restoration projects is clearly
a matter for the British Waterways Board in the light of the need
for it to carefully assess the wide range of costs and benefits
and alternatives together with existing pressures. Central government
is not well placed to decide between restoration projects across
the country or fund them through the grant to British Waterways
which is to maintain the canal network. These projects benefit
local communities and it is for regional and local funding providers
to decide on priorities and what should be supported. Whilst some
modest seedcorn funding might be appropriate, Government does
not believe it is for British Waterways to carry the risk and
responsibility for restoration projects—beneficiaries should
share the burden.
INTERDEPARTMENTAL
GROUP
8. Defra has met its commitment to set up
an Interdepartmental Group to formalise and strengthen contact
with other Government departments and make sure that the potential
benefits of waterways are understood. The Group met for the first
time last December and agreed its Terms of Reference [attached]
and will meet again in the Spring. The Group also considered the
Strategic Steer before it was agreed.
9. Going forward the Group will be involved
in a new research project on the economic and social benefits
of the waterways to help form a cohesive view of the ways in which
the inland waterways contribute more widely to our objectives.
Defra is in the process of commissioning the research with advice
from experts—IWAC, AINA and British Waterways. The identification
of the benefits and beneficiaries should help focus attention
on most appropriate sources of funding for further support of
inland waterways.
10. Further to a DfT study on which waterways
are best suited to freight use (due to be published in late March),
the Group will consider whether there is a need to set up an Industry/Government
group to take forward how Government and industry might further
encourage more businesses to move onto the waterways.
11. We are also intending to review Waterways
for Tomorrow with other Government Departments over the next year.
The Government's policies for inland waterways, as set out in
Waterways for Tomorrow published in June 2000, encourage a modern,
integrated and sustainable approach to their use. However, it
needs updating to reflect new cross Government Public Service
Agreements for the CSR period, including climate change and protection
of the environment on which Defra leads.
DEFRA'S
RELATIONSHIP WITH
STAKEHOLDERS
12. Jonathan Shaw has made a number of visits
to the waterways including to key regeneration projects in the
Midlands, the Olympics, and Wood Wharf, the latter with the potential
to generate significant commercial funding for the network in
the future. He met a wide range of stakeholders last December
in a constructive and useful meeting and another such forum is
planned for the summer.
RELATIONSHIPS BETWEEN
DEFRA AND
BW
13. British Waterways has a good relationship
with Jonathan Shaw with regular contact every few months (in July,
September, October, November and this month). His next BW visit
planned is when he goes to see the Monmouthshire and Brecon Canal.
He will meet the British Waterways Board on 19th March.
14. Defra has been working closely with
British Waterways to agree the Strategic Steer and Deal and on
its strategy for the longer term. Both Defra and British Waterways
are now working to apply the Deal. In this, inter alia, Defra
agrees not to seek to micromanage British Waterways and the British
Waterways Board agrees to manage risk and be accountable for its
decisions. The Chief Executive and Chair regularly meet Defra
officials and the Shareholder Executive, including at Quarterly
Shareholder Meetings, to go through British Waterways' business
performance, plans, projects and risk so that Defra can have an
effective engagement in British Waterways' business planning process.
BRITISH WATERWAYS
STATUS REVIEW
15. We will consider carefully the outcome
of British Waterways' Status Review into whether there are other
structural models which might enable British Waterways to increase
its commercial income for spending on the waterways.
DEFRA
March 2008
| 
