Skip to main content

British Waterways

Volume 451: debated on Wednesday 8 November 2006

To ask the Secretary of State for Environment, Food and Rural Affairs (1) whom he has consulted about the changes to British Waterways’ budget since January 2006; and if he will make a statement; (100184)

(2) what changes he has made to the 2006-07 budget for British Waterways since January 2006; why the budget was changed; when the decision to change British Waterways’ budget was made; what discussions he has had with British Waterways on changes to their 2006-07 budget; and if he will make a statement;

(3) what discussions he has had with (a) British Waterways on their budget for the next five years and (b) the Chancellor of the Exchequer on British Waterways’ budget for (i) 2006-07 and (ii) the next five years; and if he will make a statement.

The Government have consulted closely with the Chairman and chief executive of British Waterways (BW) on the financial pressures facing the Department and what these mean for its sponsored bodies. The Secretary of State and I met recently with the chief executive of BW to listen to his concerns. A further meeting between the Chairman, chief executive and myself is planned for later this month. This will look further at the implications for the adjustments in subsidy and how BW can continue to contribute towards Government and DEFRA priorities.

In order to accommodate budgetary pressures, all areas of the Department’s spend have been subject to rigorous scrutiny as part of a budget review. The review was comprehensive in nature and has ensured that DEFRA’s funding for the current year is placed where it can have the greatest impact. As a matter of good financial management, DEFRA keeps its budgets and spending under regular review and challenge and adjusts them as new pressures and demands arise. The overall budget for the Department remains unchanged and will be subject to the normal Parliamentary approval and scrutiny.

Grant allocation for 2006-07 for BW was originally confirmed as £59.429 million and they were notified of this in April 2006. However, the July in-year review of budgets brought a further cut of approximately 7 per cent. Final grant allocation for 2006/07 will therefore be £55.497 million. Allocations for 2007-08 will be issued shortly, following further engagement between the Secretary of State and the Chairs of our key delivery partners, including BW.

The taxpayer would not expect DEFRA to consult Her Majesty’s Treasury (HMT) every time there were financial pressures. We seek to manage the pressures that inevitably arise from time to time from within the annual budget voted by Parliament.

Allocations beyond 2008 to 2011 are dependent on the outcome of the current comprehensive spending review (CSR) which is scheduled to conclude by summer of 2007. Consultation will take place with HMT as dictated by the CSR timetable. However, officials are in discussion with BW about the potential for a long-term contract within the context of the CSR period.

To ask the Secretary of State for Environment, Food and Rural Affairs what assessment he has made of the likely effect of the reduction in British Waterways’ budget on (a) British Waterways’ operations and effectiveness, (b) British canals, (c) the environment and (d) regeneration; and what discussions he has had with ministerial colleagues about the likely effect of the budget reduction on the economy. (100185)

The Government are working with British Waterways (BW) to minimise the impact of the current restructuring. They have been involved with over £10 billion of waterside regeneration and have already created public private partnerships that will deliver in excess of £200 million over time. BW has also facilitated the restoration and re-opening of 200 miles of derelict canals.

As a matter of good financial management, DEFRA keeps its budgets and spending under regular review and challenge, and adjusts them as new pressures and demands arise. Further funding pressures can be foreseen for the next financial year and DEFRA will be reviewing the 2007-08 budgetary position with its agencies and non-departmental public bodies over the autumn as part of a DEFRA-wide review of spending plans.

There have been no specific discussions on the issue the hon. Member raises. However, I have regular meetings and discussions with ministerial colleagues on a wide range of issues including funding pressures facing DEFRA.