After three years of planning, British Waterways is to leave government control and become a charity. David Ainsworth reports on progress and interviews its chief executive, Robin Evans
Early in 2009, British Waterways, the quango responsible for maintaining the country's canals, floated a plan: it wanted to spin out of government and become a charity.
Those plans are likely to come to fruition next month, when the trust expects to receive final approval from the government and will be launched as a new, independent entity - the 13th largest in the voluntary sector, with an income of more than £200m a year.
A charitable vehicle has already been set up to receive the quango's assets in England and Wales, and a new name has been agreed - the Canal and River Trust. Scottish waterways will remain under the control of the Scottish government.
The trust has faced a number of challenges, not least negotiating how much government funding it would retain. British Waterways in England received grants worth £47.4m last year, which will fall to £39m in its first year of independence.
But despite this cut - in line with those made to other government-backed organisations - the long-term settlement is relatively generous. It is worth £800m over 15 years, including a guaranteed index-linked grant and an extra £10m a year from 2015/16 onwards. The trust will also acquire £460m of property.
All this means that, unlike many other charities, it has a guaranteed package of basic funding. It also knows that any new income streams will not flow back to the Treasury. Tony Hales, chair of the trust, says the settlement will provide "a bedrock on which to build the future prosperity of our precious waterways".
The trust has also thrashed out a deal over pensions. British Waterways' generous government scheme is likely to be left open to existing members of staff, but will not apply to anyone joining the new organisation. But the scheme already has a substantial deficit. In its accounts, this is listed at £60m, but pensions experts say that if the trust were to close, the final shortfall would be closer to £200m.
The government has contributed a one-off payment intended to help with the existing shortfall, and issued a guarantee that it will meet the charity's pension debts if it were to fold for any reason.
Despite the settlement, however, the new charity will not have the cash it needs to maintain about 2,200 miles of canals to the standard it would like. It says it can keep the waterways open and repaired with its core funding streams, but there is much more that it wants to achieve.
Its ambition is to raise an extra £20m a year. To that end it has appointed Ruth Ruderham, previously at Christian Aid, as head of fundraising and sunk time and effort into its fundraising strategy. It is similarly keen to boost volunteering to a level comparable to the National Trust, to which 60,000 people give time each year. Margaret Bennett, a director of Think Consulting Solutions, which worked with British Waterways to develop its fundraising and volunteering strategies, says: "Our research showed very early on that there was an appetite among people such as dog walkers, cyclists and boaters to give time and money to support their local canals.
"A lot of people think the canals are theirs," she says. "The trust has a good strategy and a team focused on engaging with people who already use the canals. I think it is extremely well placed."
The CRT has the potential to make fundraising more difficult for wildlife trusts, nature reserves and the National Trust. But Fiona Reynolds, the outgoing director of the trust, told Third Sector recently that she was delighted that there was "a viable proposition to protect the future of the canals and waterways".
Ken Burnett, a fundraising consultant and author who worked briefly on the development of the CRT, says it will be very interesting to have a new organisation come into the sector. "To be honest, it might be good if it treads on a few toes," he says. "I think there will be some resistance, and some people won't welcome it, but I think the sector should embrace it."
Another key issue for the new organisation has been how to consult a diverse set of stakeholders. Its answer has been to supplement its board of trustees with a council that includes cyclists, walkers, boaters, anglers, CRT employees and businesses based by the canals. Some of these groups have elected their representatives; in other cases they have been appointed. About 150 people will be part of the governance structure.
Mike Hudson, a consultant who worked with the charity to develop the structure, says he is sure it will work well. "I think this has the potential to show the way for other spin-outs from government," he says.
Ivor Caplan, who has lived on the waterways for 15 years and was recently elected to the council as a representative of private boaters, says there is a lot of support for the organisation among the constituencies the council represents. "It's the best opportunity for the waterways," he says. "It wasn't looking viable in government. Some people are still sceptical, and there's a lot of uncertainty. But it gives all of us who use and enjoy the waterways a real chance to have a say in how they're run."
INTERVIEW: 'I THINK IT WILL WORK FOR US - AND FOR OTHERS' - ROBIN EVANS
Robin Evans, chief executive of the Canal and River Trust, is close to launching it as an independent organisation after three years of preparation - and he's sure it's the right move.
"We've never felt that being part of government was the right place for the canals," he says. "Government is the best place for you if you've got a crisis, but not if you just want to keep something running from day to day."
But he emphasises that it will mostly be business as usual after the spin-out of British Waterways in England and Wales. "More than 95 per cent of what we do will remain exactly the same," he says. "We're running exactly the same waterways and they've got exactly the same water in them."
The big change, he says, is that the organisation will be more outward-focused: "Everyone we meet is a potential supporter who can donate time or money. Previously we had users. The people on the towpath contributed nothing except potholes.
"Before, when they had problems they came to us, and when we had problems we went to the government. We held out our hands and it gave us some tax money."
It has taken a lot of work to get various stakeholders onside, he says. But the secure agreement with the government over future funding has helped persuade them: "For the boaters there was a lot of security in government. Now the waterways are their responsibility. It's taken longer than I thought, but they're beginning to see the positives.
"Employees here also needed persuading. Our people had an image of charity as folk who weren't very rich going round with buckets. Charities to them were needy, they weren't a good place to be. But when we talked about being a trust they changed their minds. I hadn't appreciated that they saw things that way."
Nor was the government easy to convince. "Every time you meet someone new they suck their teeth and go 'hmm' and tell you that something can't be done," he says. "We were told by HM Revenue & Customs it would cost £80m to transfer out. We've now got a letter saying it's a tax-exempt transaction."
He now hopes that other organisations will follow in the trust's wake. "I would advise them to consider this process," he says. "It worked for Historic Royal Palaces. I think it will work for us. And it will work for others too."