Examination of Witnesses (Questions 120-139)
JONATHAN SHAW
MP, MR ROBIN
MORTIMER AND
MS SARAH
NASON
19 MARCH 2008
Q120 Chairman: Therefore it would
not be an unreasonable assumption to think that as part of the
Corporate Plan you might flesh out this question of the balance
of funding between public monies and own resources. There may
be something more specific in the plan that would elicit a little
more clarity on that; would that be an unreasonable suggestion?
Jonathan Shaw: I am sure we will
be looking at that.
Q121 Chairman: I know you might be
looking at it but you have not answered my question.
Jonathan Shaw: You always make
reasonable suggestions, Chairman.
Q122 Chairman: I do not make any
suggestions at all about what should be in the Corporate Plan.
All I want to know is whether that is something which is going
to be considered. If you get a plan for a three-year period, I
am sure BW would want to say something about their prospects about
how much money they are going to raise taking into account the
future development income which they undoubtedly have.
Jonathan Shaw: I am sure we will.
Q123 Chairman: They will; you are
not writing the Corporate Plan.
Jonathan Shaw: No, I am not writing
the Corporate Plan but I am sure we will have a discussion about
their assets, about their investments and what they hope to realise,
and that relationship with the grant.
Q124 Chairman: Before I pass the
questioning over to one of my colleagues, I would just like to
probe a little bit more about how your Department sees the benefits
that arise from what BW does. Let us distinguish between the maintenance
and sustenance of the existing canal network and some of the regeneration
projects which they have. Again, one of the parts of the document
that I have quoted from talks about maximising the quantifiable
best economic return from investment and that might therefore
not always be the Government's priority. I was a bit confused
by that. I do not want to read out a great long paragraph, but
I just wondered if you might be able to help us a bit on how your
Department views from your end of the telescope the purposes of
the BW investment strategy, particularly taking into account the
wider benefits which a regeneration project can generate from
BW using its expertise both in terms of refurbishment of a canal
and the adjoining property opportunities that are with it. What
is your guidance to them about how they should approach these
matters?
Jonathan Shaw: You are right to
highlight the investment and what that has brought to many areas,
and I think that some of the examples that BW would have presented
to the Committee yesterday many people are familiar with. Indeed,
I have seen those myself. In terms of our priority, we need to
see the network maintained, that is the first priority. Following
from that, we need to see them using their investments for regeneration
and restoration. The two can go together, they do not necessarily
need to be apart, and we have seen examples of that as well, ones
that have currently just finished their planning application process
and others which are currently under construction. Our priority
is, as I say, the maintenance of the network, but flowing from
that we want to see them use their investment to ensure that they
can maximise restoration and regeneration so the two can go hand-in-hand.
Q125 Chairman: I am going to ignore
my own advice and I will have to read out the paragraph in the
light of what you have just said because that intrigues me. As
I say quoting again from the document that you have delivered,
under "Defra Strategic Steer for Business Planning",
you say: "There is a critical balance here between the short
and longer term—prioritising self sufficiency for the future
might not deliver as many benefits as improved investment in the
network in the shorter term; maximising the quantifiable best
economic return from investment might therefore not always be
the Government's priority if eg it resulted in a loss of confidence
in the waterways because of a shortage of immediate investment."[1]
Can you just interpret what that means?
Jonathan Shaw: They are not an
entirely public body, are they Chairman, and they do have their
own joint venture organisation as well, so it may well be that
the joint venture part of the organisation may not be what a Government
priority is in terms of maintaining the network. Can I bring Sarah
Nason in.
Ms Nason: I am the author of this
sentence so I think I had better try and explain it.
Q126 Chairman: It is always nice
to speak to the author.
Ms Nason: I had better try and
explain what it says.
Q127 Chairman: Jolly good!
Ms Nason: Essentially this is
in the paragraph about supporting BW's vision to be largely self-sufficient,
and what we are trying to say there is that there is a balance
between the short-term interests and the longer term, so if for
example—
Q128 Chairman: Could you just define
what you mean by "shorter term" and "longer term"?
Ms Nason: What I meant by shorter
term might be over the Comprehensive Spending Review period; longer
term would be more like ten to 15 years, which is the kind of
projection they are looking at for their commercial investments.
So if BW wanted to use the fact that we support them growing their
commercial business to put all the money they could find into
growing their commercial business, that might have short-term
impacts on the network that we did not particularly want, so what
we are saying there is we are not urging them always to go for
the quantifiable best economic return from how they spend their
money, because if that is over the longer term it might create
short-term problems for the network. In some circumstances, we
might want them to put some of their commercial capital pot into
works in the network whereas obviously if they had invested that
in a joint venture, they would get a better economic return in
the long term, so it is asking them to balance these two things.
Chairman: That is quite a helpful statement
because I think that will assist particularly when Mr Drew comes
to talk about matters connected with the Cotswold Canals and the
alternative draw of funds to the Brecon and Monmouthshire Canal
which seems to have put a spanner in the works of that particular
project because I think that makes a very interesting juxtaposition
between the maintenance of the network and the longer term investment
issue. It is very helpful to know where we are coming from and
I am going to hand the questioning to David Lepper.
Q129 David Lepper: I want to stick
with this idea of balancing the various priorities that have been
given to BW by Defra. The first item of the statement from Defra
is that you will give clarity on Defra's strategic priorities
to British Waterways, and I think Defra have said, maybe you yourself
Minister have said, that the Government "broadly favours"
maintaining the network in a satisfactory order as the foremost
priority for BW whilst allowing BW to "strike a balance"
between that and other priorities. Does BW need you as Minister
or the Department to explicitly approve any decisions it makes
about prioritising its work? If it decides there is another priority
which ought to come first, does it need government approval to
do that? Another item on the deal says that Defra will not seek
to micromanage BW of course.
Jonathan Shaw: We agree the Corporate
Plan that the Chairman referred to in his opening remarks and
the priority is, as you have rightly pointed out, to maintain
the network for the public benefit. Part of the agreement is that
there should not be any surprises, but I do not sign off particular
projects, and in terms of assessing the risk of particular projects
and where they should invest, that is a matter for BW.
Q130 David Lepper: On the Strategic
Steer that has been referred to, published last month as a part
of the deal or supporting the deal or arising from the deal, could
you just sketch out for us how in terms of guidance to BW the
Strategic Steer document differs—or maybe it does not—from
what has gone before?
Jonathan Shaw: Again arising from
the Select Committee inquiry, we clearly needed to review our
relationship with British Waterways and we wanted to set out a
new approach, a new deal, a refresh to the relationship (and we
have not had this steer before) in order for there to be clarity.
We want them to act in the way of making the decisions about which
parts of the network they invest in, where they seek partners
for regeneration, and they have done that very successfully, but
we want to ensure that the relationships are very clear and hence
we have set this document out. What is the priority? Is it regeneration
or is it the public? We have said very clearly what it is and
what order it is, but in terms of the day-to-day decisions, that
is for BW and I am not going to micromanage that organisation.
I think Mr Mortimer wants to come in.
Mr Mortimer: I just want to add
one thing to that which is that at the very start of the document
it makes quite an important statement which is that one of the
things we are trying to do through the steer is to acknowledge
that, although Defra obviously has the sponsorship relationship
with British Waterways, we do that on behalf of the whole of government
and in effect we hold the relationship in trust for government.
In a way that is a fairly obvious statement on one level, but
it is an important statement because it reflects the approach
which we are trying to adopt which is not to force BW into delivering
Defra's particular priorities but to look more broadly, and obviously
the establishment of the new interdepartmental group reflects
that. I think that is another purpose of the steer to put it in
that larger context.
Q131 David Lepper: I am not sure
whether anyone else is going to ask about the work of the interdepartmental
group but presumably that is seen as the forum should there be
issues that arise between British Waterways and Defra?
Jonathan Shaw: What we want to
ensure with the interdepartmental group is that the policy development
across government takes account of the benefits of the waterways,
and so that body has had its first meeting and it is my intention
to chair a number of those meetings.
Q132 Sir Peter Soulsby: Could I follow
that up because we heard evidence last time, and indeed in our
report there was a lot of discussion about the way in which BW's
work and its output relate to the responsibilities of other departments.
In response to that, I think we were very pleased to see the establishment
of this interdepartmental group, but it became clear when we were
asking questions of BW yesterday that although there has now been
one meeting of it, not all departments were in attendance, which
obviously causes some concern as to whether other departments
really were signed up to working within that group to actually
provide a focal point of the relationship between government and
BW to join up across the departments. I wonder if you would like
to say whether it is going to be made to work and whether departments
are going to be made to participate.
Jonathan Shaw: There are six departments
that have signed up and it is my intention to invite the Children's
Department as well, as there is a whole agenda there, particularly
for communities which have waterway networks and particularly
where there is regeneration happening, because we want to ensure
that children are involved in those consultation projects that
are going to determine the future shape of some of the development
that is going to take place within their communities. The next
committee meeting will look at planning which is important for
a whole range of issues in terms of the waterways and so rather
than having general discussions there will be themed discussions,
and obviously that will involve CLG and, as I say, I will be chairing
some of those meetings.
Q133 Sir Peter Soulsby: I think the
other department that was not represented at the first meeting,
as we understood from the answers yesterday, was DCMS, and clearly
given the heritage that the waterway network represents, it would
seem to be a fairly significant absence.
Jonathan Shaw: They were invited
and I do not know the reason for the official not attending that
particular meeting—they are a small department—but
I have written to all of my ministerial colleagues in those departments
and they have given the assurance that they are enthusiastic and
they will ensure that their officials attend. As I say, I will
be chairing a number of those and I will be advising my colleagues
that I will be chairing a number of those. I think this interdepartmental
working group is absolutely vital. I want to relook and refresh
Waterways for Tomorrow and to ensure that that is a meaningful
exercise it is important that it is a government document, so
all of the relevant government departments have got to be involved,
and anything that we conclude on the refresh of that document
will obviously ensure sign up.
Q134 Chairman: Minister, before the
Summer Recess commences you might care to write to us a little
report about how progress is being made on the interdepartmental
committee because, if nothing else, we would like to know if everybody
is going to turn up, and we agree with you that it is a very important
thing, but we would also like to know what you have been up to.
Jonathan Shaw: I would be delighted
to write to you. Everyone has a lot of pressure on their time
but I see it as an important priority of my work as the Waterways
Minister to ensure that this wonderful asset that we have is not
just within one government department but all of the government
departments, as they involve planning policy, and not just the
departments of course but their delivery bodies—
Q135 Chairman: Perhaps you could
invite them to have a meeting on the Regent's Park Canal on a
boat and then they could not escape!
Jonathan Shaw: Perhaps you would
like to drive the boat, Chairman!
Q136 Chairman: We will come along
and join in the meeting.
Jonathan Shaw: I know some of
you would.
Q137 Sir Peter Soulsby: I know it
is early days yet but I think we might also hope that at some
stage some of those other departments might feel they want to
put some resources in as well because clearly when it comes to
educational activities there are things that the relevant department
could well be asked to fund or indeed DCMS, either to do with
museums and the heritage or the boat collection and things of
that sort.
Jonathan Shaw: There are certain
constraints on departmental budgets at the moment, but it is a
reasonable point to say if we can maximise some of our assets
then we can get more bangs for our buck from the public purse.
That is a key priority for me and one of the tests will be as
to whether not just for departments but also for their delivery
bodies at a local level, it is on the radar, that is the crucial
thing. That is the test for me as to whether I can get it properly
on the radar, and the refresh document, which will require sign
up, will be the test of that radar signal.
Q138 David Lepper: Just to return
to priorities again, one of the priorities is developing a range
of additional public policy benefits from BW's operations and
those public policy benefits often arise from the regeneration
work that British Waterways is doing. What BW tells us in its
memorandum to the Committee this time around is that the contribution
it receives is usually in public benefit rather than direct financial
benefit to British Waterways. Is that so, that delivering public
benefit, particularly for regeneration, does not necessarily produce
much financial benefit for the company itself? Are they right
in claiming that?
Jonathan Shaw: Yes, they make
an investment into a particular part of the waterway network;
they bring together a whole range of different partners; and what
that then does is produce some fantastic regeneration for public
benefit. In terms of the organisation, no, there are not huge
returns on that but there are huge returns, as I say, for the
public benefit in case examples which you are familiar with, Mr
Lepper.
Q139 David Lepper: Defra does say
that a part of the impetus for, for instance, BW's investment
in its waterside properties should be that it might reduce Defra's
financial commitment by growing the commercial business, so is
there a tension there that you want it to do both things at once?
Jonathan Shaw: I think they can
do both things at once.
1 Ev 21, Strategic Steer para 4(ii) Back
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