Waterways Funding Cuts Announced

Defra has today announced that its grant to British Waterways next year will be £41.5m. This is a reduction of £9.8m (or 19%) from the 2010/11 baseline grant of £51.3m. Given that Government funding makes up approximately half of the net spend on the waterways, this will translate into an effective cut of resource available of about 12% in 2011/12.

The settlement probably represents the last annual grant to British Waterways in England and Wales before a longer term contract comes into place in April 2012 when the canals, rivers and docks in its care are expected to be transferred into a new charity.

To put this into perspective, British Waterways is already operating with a budget some £30 million short of the minimum and have only recently implemented measures to reduce annual expenditure by some £10 million; this new cut of £9.8 million effectively wipes out that hard earned reduction.

Defra has also announced indicative funding from 2012/13 to 2014/15 will be an annual £39m, with a long-term commitment that a funding contract running up to at least 2022/23 will not fall below this level. As we currently understand it, this means the grant will effectively fall each year by the rate of inflation.

British Waterways’ chairman, Tony Hales, commented: “In the current climate it would be unrealistic to expect British Waterways to be exempt from cuts in public spending and we will have to make difficult decisions to ensure the continued maintenance of the historic canals and rivers in our care. The Government’s commitment to the first ever long-term public funding settlement for the waterways is, however, a good step forward and I have been heartened by ministers’ continued commitment to this ‘Big Society’ flagship.

Security of funding is fundamental to achieving the Government’s objective of establishing a new ‘national trust’ for the waterways. The challenge now is to develop a funding plan which gives confidence to the incoming trustees of the new charity and retains the support of waterway stakeholders. I firmly believe this can be achieved and, while we would all have hoped for a larger settlement, we are one step closer to turning the long-held vision of a waterways charity into reality.”

Many waterway activists, however, are concerned that the cut may be too much for the new charity to bear. It will be interesting to see how the new Board of Trustees – to be appointed in early 2011 and widely expected to include stakeholder representatives – will react to this cut which is more savage than expected.

Given the apparent support of the Waterway Minister for a reasonably generous start for the charity, coupled with wide cross-party support amongst back-benchers and 13 million waterway users across the country, this might well become an issue where the Treasury is persuaded to take another look.

That fact that British Waterways already operates with a virtual £30 annual deficit, a further cut of £10 million might well prove the difference between a flourishing new charity and a highly visible failure at the politically sensitive time of the next election.

The amount of money involved is peanuts in the scale of the tens of billions being allocated to each of the budgets for welfare, education, health and defense.

Certainly the NWC should consider launching a membership scheme as soon as it is formed; what waterway user would begrudge £5 per annum to support such a popular resource?

More details of DEFRA cuts can be found at:

Corporate reports, finances and accounts « Defra.

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