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Volume 130: debated on Tuesday 29 March 1988

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To ask the Secretary of State for the Environment whether he has received a response from the British Waterways Board to the Monopolies and Mergers Commission's report on the maintenance of the boards' waterways; and if he will make a statement.

I am grateful to the Monopolies and Mergers Commission for its wide-ranging investigation of BWB. The board has carefully studied the Commission's report under its new chairman, Mr. David Ingman, and I am placing copies of its initial response in the Library of the House.The commission proposed a major programme of changes and improvements, some of which BWB has already begun or identified as necessary, for implementation over the next two to three years. Its recommendations cover the definition of maintenance standards and tasks, achieving the optimum balance between in-house work and the use of contractors or consultants, the development of procedures for project appraisal, the basis for allocating resources to individual waterways, BWB's freight operations, the raising of revenue both from leisure use and from BWB's estate, the management of BWB's direct labour force and salaried staff, and some aspects of management systems and structure. The Government broadly endorse the commission's findings.BWB has accepted most of the commission's recommendations and has set in hand the process of management change. Key elements are the development of comprehensive plans for individual waterways as a basis for budgetary control and resource allocation, structural reorganisation, the appointment of new commercial and personnel directors, and the overhaul of cost control systems. I welcome the board's positive response to the report and its commitment to change. I support both its overall approach and the action it is taking to implement the report's recommendations. I attach particular priority to making progress with the recommendations on maintenance and contracting out, direct freight activities, project appraisal, and the management of BWB's estate.The Department is liaising with BWB on the development project appraisal procedures, and will review the guidelines on submission of schemes to the Department for approval in the light of the new arrangements. I shall also keep under review BWB's responsibilities for public road bridges over canals.Some of the commission's recommendations on BWB's financial and budgetary framework would require Government action. The commission thought it important that the guidance figures which BWB is given on grant levels for future years should be respected. It also recommended that the Government should consider the possibility of relating part of the grant to meeting the cost of non-revenue earning requirements and that BWB should be given an incentive to increase its income from users by being allowed to retain at least part of any such increase.These issues need further consideration in consultation with BWB. I recognise that BWB would like as much assurance as possible about future grant levels, subject always to public expenditure constraints. I also attach importance to incentives. The existing grant arrangements do, however, already allow BWB to use all receipts within the same financial year and to carry over to the following year, subject to approval, receipts from the sale of land. Further work is needed to assess the feasibility and practical value of splitting the grant between revenue and non-revenue earning requirements.

I will make a further statement this autumn in the light of the first substantive report which BWB will prepare then on progress in implementing the commission's recommendations.