The statement from parry is pathetic. The fact that they are giving you some more money doesn’t mean that you offer “clear value for money.”
Our Response to the Government Grant Review
12 June 2023
A message from the Canal & River Trust - 10th July 2023
We have been waiting to hear the outcome of the Government Grant Review for some time now as you know and – without any warning – Defra has made an announcement today.
As you know, we receive £52.6m each year in grant from Government in an agreement that was put in place when the Trust was first created in 2012, and which runs until March 2027. This provides almost one quarter (25%) of our annual income.
Under the current agreement we receive no allowance for inflation in the period from 2021 to 2027 and hence the value of our grant funding has been significantly impacted by the high inflation we’ve all suffered over the past two years. By 2027 we expect the total value of the grant in real terms (that is, after allowing for inflation) to have fallen by nearly 30%. When this is combined with the increased work required to address the resilience of our ageing infrastructure to keep it safe we face very difficult financial challenges over the next few years.
We had hoped this would be reflected in the future grant review. Disappointingly, Government has announced that our public funding will instead reduce year-on-year from 2027 onwards, with grant payments declining by 5% each year. It will start by falling to £50 million in 2027/28 and then reduce in steps to reach £31.5 million in 2036/37 with no adjustment for any inflation. This means that the real value of the grant will decline even more steeply. We calculate that – when compared with 2020/21 (when the annual grant was first set at £52.6m) – this will be a real-term reduction of over £300 million over the ten years.
We should acknowledge that there are some positive aspects of today’s announcement. There was no legal obligation on Government to continue its funding after our initial grant agreement expires and we have successfully demonstrated that there is a strong case for funding to continue given the scale of benefits the Trust delivers. We have convinced Government that another long-term agreement is justified given the significant national infrastructure in our care, with Government committing to a new 10 year grant agreement, up until March 2037.
The Review also confirms that funding for the Trust represents ‘clear value for money’ with canals shown to deliver substantial benefits to the economy, to people and communities, and to nature and biodiversity.
However, this makes the future grant levels announced even more disappointing.
What now?
It is important to note that grant is only 25% of our income and we can focus our efforts on increasing the income we generate from other sources; indeed strong growth is already assumed in our long-term plan. We must also manage our work efficiently and innovatively to find ways to reduce costs, building on the current Operations & Maintenance review. Nevertheless, we are issuing a warning today that such a steep reduction in grant will inevitably lead to a decline in the condition of the network and the alarming prospect of canal closures.
What we’re going to do…
We know that this isn’t the outcome that millions of people would want and so today we are launching a campaign to change this decision. This won’t happen immediately so we need to plan for this to run for several months. We are determined to fight to reinstate the funding and – with nearly four years to run on our current agreement - we think we can successfully achieve this. With the prospect of a general election next year, and a new government (of whatever party) in place, with a fresh five-year term, we believe the case for providing sufficient funding for the nation’s canals, and all the benefits they deliver, will be overwhelming.
I know this will cause many of you to be concerned about the future. I know how passionate you are for the canals and the work we do. But we should not be discouraged. Rather we will re-double our efforts to make our case even more convincingly.
I am sure this will pose lots of questions and I will share a video message later. Our conversations on this announcement will continue over the coming weeks.
What we are asking the public to do…
We're now reaching out to all of our different users, partners and supporters, asking them to join us in our mission to #KeepCanalsAlive. We are urging them to take action by emailing their local MP, letting them know how important canals are to them, for nature and for future generations - and the consequences of funding cuts to canals will have in their community.
They can send an email to their local MP in a few easy steps by clicking here. We are providing you with this information so you can answer any questions or queries you may receive.
Finally, please be assured that there is no immediate impact from this announcement on our work today or our plans for the year ahead. The reduction in grant funding does not come into effect until 2027 and the great work we all do must continue. People and communities, the history we are entrusted with, and the nature we provide for, are all depending on us to care for the waterways and to ensure their future.
We're getting some dates together as soon as possible for you to join us in some online calls to find out more and come together with us.
Thank you for your commitment to the Trust and the vital work we do.
Richard