Merger of EA navigations and CRT – No Thanks!

NABO’s Thames Rep. and volunteer lock-keeper,Louis Jankel, outlines the areas of concernover any merger of EA navigations and CRT

In the boating press a number of ill-informed individuals have been claiming that the founding fathers of the IWA, namely Messrs. Aickman and Rolt, had declared that the River Thames should be part of an integrated waterway system. This is quite untrue. The much published Rolt wrote that the Thames Conservators were an administration to be envied and he would have liked to emulate it for the canals. I have asked for chapter and verse for the source of a less-published Aickman statement that the Thames should be included into the integrated canal system, but I am still waiting and I expect I shall do so indefinitely. Actually Rolt’s first trip on the Thames from Oxford to Reading and the Kennet and Avon was such a bad experience (Angela Rolt aboard Cressy disappearing down the river with Tom ashore holding the parted cotton line) that it was a number of years before he tried it again. So why is it such a bad idea to merge the Thames into CRT. Here are five compelling reasons.

1. Funding
In 2008, Defra instructed the EA to identify the annual ‘funding gap’ – the government liability between income and expenditure. Annual capital expenditure was identified as 3.5% of the capital asset valuation. The 3.5% annual charge was the figure Defra wanted to be used, being a motorway maintenance costing formula borrowed from the Department of Transport! This 3.5% was made up of 2% asset replacement provision, 1% assets maintenance and repair with the remaining 0.5% to inspect and investigate the assets. In 2008, locks were valued at £250,000,000 and weirs valued at £720,000,000. In 2013, unattributable sources tell me that lock values are now >£500,000,000 and weirs >£1.2 billion. To reduce this to simplistic terms, taking on nothing more than the Thames locks maintenance, the CRT Trustees would need to have a dowry of £10m per annum. For the Nene and Great Ouse this figure would have to be doubled to £20m each year at least. And these figures do not include the annual amount of money Defra currently pays the EA towards wages, some £5m just for the Thames.

It is because the figures are of this proportion, being way over anything that can be considered in the current financial climate, that Owen Patterson put a stop to the merger discussions. CRT is into its second year and has identified opportunities for increased funding because of its charitable status, but I doubt anyone would expect £10m extra annual income from new sources. Proponents of CRT acquiring the EA navigations should be aware of how quickly such a merger could weaken CRT’s already rather precarious fiscal health. Currently the entire EA has a national annual budget in the region of £1bn, even after stringent government cuts. In the event of a major infrastructure failure anywhere in England, the EA has contingency funds available that are more than the entire CRT £58m annual repair bill. As yet the piper has to be paid to cover the costs of remedial work caused by the recent Thames flooding. For certain the EA Thames Area will have to go cap-in-hand to the EA Board for fiscal support, likely to run into millions. Had the Thames already been a part of CRT that invoice would be sitting on the CRT Trustees’ table. And who is prepared to gamble that such flooding is just one in a thousand years: one in a hundred years: one in a decade or it might just be repeated next year.   

2. Harmonisation

Fees: In 2008, Defra instructed the EA to harmonise its charges with BW but after three months of discussion it was found impossible to achieve any common ground. So Defra downgraded its instruction to harmonising the different tariff structures of the then three EA regions into a single tariff band. After a further six months Defra admitted defeat and harmonisation of tariffs was dropped. No method could be found to achieve harmony that would have a neutral effect on income. In all the suggested options, at least 40% of boaters would pay more or significantly more in registration fees. To achieve harmonisation of all licences and registration fees and not cause any boater to pay more than at present would cost CRT the best part of £1.5m in lost income. Gold Licences would obviously cease to be needed. Currently they generate around £300,000 for the EA and must be worth more than £500,000 to CRT – more lost income. Around 85% of Thames boats are not able to squeeze onto the canals, because if the width doesn't get them the low bridges will. So these cruisers only need to buy River-Only CRT licences. That would be another hefty reduction in income for CRT, which could be more than £1m.

VAT: EA boat registration does not attract a VAT charge. At the outset BW had the option to apply for VAT exemption on registration of boats and licences, but it forgot! Even using the existing EA tariff, if the EA waters are subsumed into CRT, the CRT tax regime will pertain. So CRT could either increase all EA navigation charges that are currently VAT-exempt and expect users to pay an extra 20% or it would have to absorb and lose the 20% (about £1.5m in total) to make neutral any merger charges – more lost income.

Moorings: Accommodations¹ account for about £900,000 of current EA income and at least £500,000 in uncollected fees have been identified. Marinas located off the course of the main river pay nothing to the EA for the right of access to the river, nor the use of the water and maintenance of water levels. In fact the EA have given fiscal incentives to ‘the trade’ by freezing charges for the past couple of years and have expressed a view to continue the policy for the next year. In the original merger discussions, it was never clear whether CRT would want to impose their marina charge on merging. It would seem to be unfair to allow such financial advantages to Thames marina owners over CRT marinas.
EA visitor moorings are currently free for 24 hours and some allow up to a further two days for a payment of £5 per night. Any requirements to moor for periods in excess of a few days are satisfied by private marinas. In the myriad alternative moorings on the river, more or less anything goes and hence mooring abuse is a serious problem. But this can only be resolved by local authorities and major landowners (e.g. Thames Water) working together under the River Thames Alliance (RTA) initiative to produce a common workable policy.

3. User groups

The RTA was funded by the EA until last year. It is to become a subscription charity with the aim of coordinating local authorities, business and public organisations to come together and set river-wide standards and policies. Seven separate River User Groups (RUGs) meet three or four times a year and are funded by the EA as a statutory duty. They offer a briefing for the public on local issues and the EA is required to listen to any questions raised by the attendees. The Thames Navigation User Forum (TNUF) is a formal standing committee that comprises boating organisations’ representatives and the chairs of each RUG. It is the main vehicle for dialogue between the EA navigation management and users and it meets four times a year under EA auspices. Under the existing organisation within CRT, there would seem to be a single RUG meeting which is currently ‘owned’ by CRT. The structure of CRT does not have room for the Thames consultation system, which has taken a number of years of hard negotiating to achieve and members would feel very unhappy if the system was diluted in any way.

4. Structure

In 2008, Sarah Nason, Head of Waterways in Defra had agreed that ring-fencing the River Thames was desirable within the proposed charity that eventually became CRT. As has become apparent, there is no appetite within CRT for such a model and actually it would seem to be impossible to achieve with the current CRT structure. Since King Richard I flogged the river off (circa 1187), there has been a contiguous single organisation administering it holistically with success. Holism denotes a whole and the river Thames was considered in its entirety. The EA took the Thames within its embrace in 1997. To fit within its organisation the Thames’ functions were parcelled out among the various EA technical divisions that handled those functions and were subsumed into the divisional cost headings. The new EA Navigation Division became the navigation authority. The EA still manages to embrace that holistic entity as its divisional management has overall responsibility for all river activities. It works well. Currently the EA is moving closer to the original inherited model by combining the flooding budgetary considerations with water level control and flood defence financing. The recent flooding has highlighted this holistic management as every EA employee has been involved in flood alleviation. A transfer to CRT would end this approach whether it is just navigation or it also includes flood control, as there are ecological and environmental aspects to managing the river that will stay with the EA.

5. Timeframe

There is a further final consideration: we see the excellent determination with which CRT has approached its inheritance, but it is going to take a few years for its plans to take effect and its aspirations to bear fruit. Any proposed merger of EA navigations with CRT must be agreed and subject to an executive order by 14^th December 2016 (Public Bodies Act 2011 – sunset clause, 5 years from date of enactment ²), otherwise it will require primary legislation and there is not a chance in hell of that ever happening. Both users and staff understand the river and its demands, and to attempt to absorb the River Thames into CRT within the timescales demanded may well be a meal too far. Certainly the Government has no appetite to spend the sort of money that I expect the trustees would have to demand to satisfy the Charity Commissioners.

In summary, the management of the River Thames is internationally recognised as being one of the best examples of its kind in the world. We have a British heritage jewel that needs to be nurtured and not forced into a marriage with an organisation that has only ‘boats on water’ in common.

² General Order-Making Powers, Item 12, page 7. See www.legislation.gov.uk/ukpga/2011/24/pdfs/ukpga_20110024_en.pdf