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Government announces Canal & River Trust deal

The Canal & River Trust is “full steam ahead” after its trustees struck a deal for more grant money – but Government delays have pushed the launch back from April to June.

The new charity, which is taking over from British Waterways, had been scheduled to launch on April 1st. The trustees were unhappy with the Government’s initial offer of £39m per year, and have been negotiating to raise the settlement.

With public finances stretched, the new deal will see the £39m, inflation-free figure retained for the first three years, but then raised to £49m plus an adjustment for inflation. The initial offer was a 10-year deal, but the final agreement will now last for 15 years.

“This deal was unanimously agreed by the trustees,” according to trustee John Dodwell. “The key thing is ‘have we received something that makes the Trust viable?’, and the answer is yes.” He estimated that the deal is worth around one-third more than the original offer.

The details

The Government and trustees have also struck a deal on the BW pension fund deficit. The Trust will receive a one-off sum of £25m to cover increased costs; the Government will then guarantee the balance for 19 years. The pension fund’s trustees were anxious that a charity would be less secure than a state-backed organisation, and could have asked the new Trust to pay off the whole deficit at once.

John Dodwell emphasised that the long-term nature of the deal was as much a breakthrough as the extra money. “In the past, BW might have thought they had three years’ money, and then it would be cut within that period. We have certainty for 15 years.”

In return for the increased grant, the Government is likely to set conditions for the Trust: for example, on canal maintenance, the number of structures in the worst ‘D’ and ‘E’ categories will be required to stay below 25%. Privately, the Trust believes it will also need to ‘rebalance’ spending so that more is dedicated to dredging and other work.

Launching the Trust

With the Parliamentary transfer process behind schedule, British Waterways and Government department DEFRA have conceded that the April 1st date is unattainable. They are now working towards a June launch, though no formal announcement had been made when WW went to press. BW’s Simon Salem said that the date was “perfectly workable”, and he was confident the new Trust would receive media attention despite competition from the Queen’s Diamond Jubilee and the Olympics.

The Trust will then need to concentrate on “growing its income” beyond the Government contract and BW’s existing commercial activities. 

“The contract is not a free pass to do nothing else for the next 15 years,” said Simon Salem. “But it’s a good platform on which to get going.” 

Tuesday 31 January  | Andrew Denny  | 10.55am, Tuesday 31 January 2012

Comments

A good result for the new Trustees.

Capt Ahab  | 12.18PM, Wednesday 1 February

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