The Trustees) of Canal & River Trust (The Trust Or CRT) Held at Jury’S Inn Hotel, 245 Broad Street, Birmingham B1 2HQ on Friday 28Th September 2012 at 09:00 Am

MEETING OF THE BOARD OF TRUSTEES

Minutes of a meeting of the Board of Trustees (the Trustees) of Canal & River Trust (the Trust or CRT) held at Jury’s Inn Hotel, 245 Broad Street, Birmingham B1 2HQ on Friday 28th September 2012 at 09:00 am.

Trustees: Tony Hales Chairman Lynne Berry John Bridgeman Marisa Cassoni Jane Cotton John Dodwell Steve Shine Simon Thurley

Apologies for absence: Manish Chande Tom Franklin

Executive Directors: Robin Evans Chief Executive Nigel Johnson Corporate Services Director (and Secretary to the Trust) Stuart Mills Property Director Vince Moran Operations Director Philip Ridal Finance Director Simon Salem Marketing & Fundraising Director

Also attending: Sally Ash Head of Boating (items 12/071 to 12/074)

Secretary of the Meeting: Mark Devin Prism Cosec

Action 12/071 CHAIRMAN’S WELCOME

The Chairman welcomed all those present.

12/072 PRESENTATION ON NON-COMPLIANT CONTINUOUS CRUISERS (CRT 31)

Mr Salem and Sally Ash together presented a paper on non-compliant continuous cruisers, which the Trustees considered and discussed.

The issue had been aired at the Council meeting held the previous day (the same paper being presented) and the views of several national boating organisations, (including those of the NBTA); other stakeholder groups; local government and neighbouring communities were made known to the meeting by Council members, Trustees and management. The range of views were all considered

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and noted at that meeting.

A number of projects being developed in various locations on the waterways were outlined in the paper and discussed. The Trustees noted the strong support from the Council to the direction of travel set out in the paper and presentation. The Trustees encouraged consideration of the further use of technology and (appropriate) use of volunteers as elements in the ‘toolkit’ to address non- compliance by an increasing number of continuous cruisers who have established their homes along the towpath in particular areas. The Board underlined the importance of using every suitable opportunity to increase the number of residential moorings, notwithstanding the many difficulties involved, particularly with regard to the planning system.

After further discussion the Trustees approved in principle the proposals set out in the paper and agreed to endorse:

1. The interpretation of Section 17(3)(c) of the British Waterways Act 1995 formerly used by BW and now by the Trust and its processes implementing this;

2. The strategic management solutions currently being developed as a SS means of boosting the Trust’s ‘toolkit’ for reducing non-compliance and improving harmony amongst waterway users; and 3. The commitment of resources in principle to this programme as outlined in the paper.

12/073 BOAT LICENCE FEES 2013

Mr Salem presented a paper that requested the Trustees to confirm increases in license fees in accordance with the formula for the final year of the published three year plan for licensing. This would result in an increase in private licence SS fees of 4.6% from April 2013. Following a [wide ranging debate and discussion considering all options]*, this was agreed.

The Trustees further considered future increases to licence fees from 2014 and agreed that a benchmark of standard fees only rising in line with inflation should be applied for the financial years commencing in 2014, 2015 and 2016.

It was noted that the practice of applying discounts on licences for boats used by charities varied considerably around the country. Some boats were simply used to raise charitable funds, others were used to provide accessible experiences for the disadvantaged and some had a dual role but the current policy was not

applied consistently.

The Trustees considered generally the issue of cross-charity discounts. In general, it was not commonplace for all charities to offer discounts as a matter of policy to other charities. However, the Trustees agreed, for the time being, to maintain the policy of offering discounts but only where the charity boat was not used for fee-paying passengers at all. Further guidance would be issued to the industry by way of consultation in advance of implementation.

Mr Mills said that an on-going review of the licencing of business boats would be SM finalised for April 2013.

[* Words in square brackets added pursuant to minute 12/090 of 22 November 2012]

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12/074 FEEDBACK FROM COUNCIL MEETING 27 SEPTEMBER 2012

The Chairman provided feedback following the Council meeting held the previous day and on behalf of the Trustees thanked those responsible for organising the meeting.

It was noted that a letter had been received from Tim Coughlan of Braunston Marina that raised concerns about a nearby proposed marina development at Onley and sought direct intervention form the Trust to prevent it. Mr Johnson was asked to write to Mr Coughlan articulating the legal situation and the Trust’s position. NJ

(Sally Ash left the meeting)

12/075 DECLARATION OF INTERESTS IN ANY MATTERS ON THE AGENDA

No interests were declared by individual Trustees. 12/076 MINUTES

The amended minutes of the meeting held on Wednesday 25th July 2012 were approved.

Matters arising:

Heritage Lottery Funding (minute 12/067): A meeting with representatives of the National Trust and English Heritage would be arranged. SS

12/077 CHIEF EXECUTIVE’S REPORT (CRT 32)

The Chief Executive supplemented his written report with a verbal update on various issues, inviting other executives to comment as appropriate.

Mr Moran reported that the first major contractor/Trust safety forum had taken place and that he had received positive feedback on the event.

It was noted that Hilary Bainbridge, the current Waterways Ombudsman, had produced her final report for 2011-12 before leaving office and had met with some Trustees to provide feedback on the previous day. Mr Johnson updated the Trustees on the process of the Waterways Ombudsman Committee (where the Trust was in a minority) to appoint her successor.

An employee survey would be conducted in October 2012, which would include questions about the change to trust status.

12/078 FINANCE DIRECTOR’S REPORT (CRT 33)

Mr Ridal presented his written report. The principal workstream currently was the preparation of completion accounts as at 30th June 2012.

The current cash position was noted. The balance and the cashflow forecast had not changed materially since the last Trustee meeting on 25th July. It was agreed that the Strategic Plans Committee would give consideration to the development of high-level cash targets for the three-year period 2013/14 and 2015/16.

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12/079 FUNDRAISING REPORT

Mr Salem’s written report was received and noted. It was agreed that a strategy to attract major donors should be considered for inclusion in the Operating Plan, benchmarking against other charitable organisations as appropriate. SS

12/080 OPERATIONS REPORT

Mr Moran reported on the recent breach of, and other damage to, the Trent & Mersey Canal following recent exceptionally heavy rainfall.

12/081 DECISION PAPERS (CRT 34)

The following matters were considered and agreed:

1) Proposal for a Strategic Plans Committee: It was agreed that members should be John Bridgeman, John Dodwell, Steve Shine, Manish SS Chande and Tony Hales;

2) [Commercially confidential minute removed]; SM 3) Operating Plan 2012-15 for publication: The Trustees were invited to comment on the draft Operating Plan. Subject to the incorporation of amendments as noted, the Plan was approved for publication to the Trust’s website. RE

12/082 PENSION SCHEME DOCUMENTATION

Mr Johnson tabled a paper dated 26th September summarising the contents of three documents prepared by the pension fund lawyers requiring approval for execution. It was noted that the subject matter of the three documents does not directly come within any existing delegated authorities. Mr Johnson summarised the subject matter of each document and, after due consideration, the Trustees approved entering into the following: 1) A flexible apportionment arrangement with The Waterways Trust (‘TWT’) relating to the exit of TWT from the pension scheme; 2) Two supplemental deeds making minor amendments to the Pension Scheme Principal Trust Deed in relation to (i) the process for future partial termination on the departure of any other associated employers; and (ii) additional voluntary contributions.

12/083 BOARD COMMITTEES

The Trustees noted the minutes of the Investment Committee meeting held on Wednesday 12th September 2012.

12/084 JIM STIRLING

The Trustees noted that Jim Stirling would be retiring from the Trust at the end of the month and that tributes had been paid to him at the Council meeting the previous day. He was presently in China at the World Canals Conference (not at the cost of the Trust) and that otherwise the Trustees would have wished to pay their tribute to him in person.

Jim had given remarkable service to British Waterways and the Trust since

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joining the former in late 1992. As Scotland Director he had led the restoration of the Lowland Canals. The ground breaking design and construction of the Falkirk Wheel as part of that project won many awards and the Wheel now features on the Scottish £20 note. Jim was rightly awarded an OBE for those achievements.

As technical director Jim oversaw a complete overhaul of the management of infrastructure risks and the delivery of major works programmes. For the last two years Jim was a key member of the transition team that negotiated the transfer of British Waterways to the Trust. Jim made a major contribution in convincing government that the Trust would inherit from BW the skills, processes and experience to provide a safe and sustainable future for the waterways outside of government control. Jim was regarded by all sides in the project as the technical expert and this was a vital factor in ensuring that the Trust started life with achievable targets and a good funding settlement.

12/085 DATE OF NEXT MEETING

Thursday 22nd November 2012, Ellesmere Port, Liverpool.

12/086 SUCCESSION TO THE ROLE OF CHAIR OF THE TRUST

Tony Hales and the Executive Directors withdrew from the meeting for this item of business (other than Nigel Johnson, as Secretary to the Trust).

The Trustees noted that Tony Hales had, in 2011, indicated his intent that he would stand down from the position of Chair, and as a Trustee, of the Trust at the end of March 2013. Had the launch of the Trust as successor to British Waterways in England & Wales gone ahead in April of this year as planned, there would have been one year for him oversee the transition to the Trust and for the Board to identify a successor. The Trustees noted however that Parliamentary processes had delayed that launch till July 2012 and that accordingly there was limited time for the identification of a successor in a process that involved both the Board and the Council.

Accordingly the Trustees agreed unanimously to invite Tony to remain as a Trustee in the Chair of the Trust for the present (subject to retirement by rotation and possible re-election as a Trustee at the first Annual General Meeting of the Trust in September 2013). That would provide an appropriate period of time to identify a successor and manage the succession in a considered manner. The Trustees then went on to consider the detail of that process.

12/087 CLOSE OF MEETING

There being no further business, the meeting closed at 1:15 pm.

Chairman

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MEMORANDUM TO THE BOARD

NON COMPLIANT CONTINUOUS CRUISING: BRIEFING FOR TRUSTEES SEPTEMBER 2012

CONTENTS

Executive Summary

1. Background

2. Trustee Action

3. Licensing & moorings policy regulations – overview

4. Generic solutions

5. Current local projects

6. Resourcing

7. Conclusion

APPENDIX A - A SHORT CHRONOLOGY OF PAST CONSULTATION 2002 - 2012

APPENDIX B – LEGAL BACKGROUND – MORE CONTEXT

APPENDIX C – THE ENFORCEMENT PROCESS

APPENDIX D – HOTSPOT MAP OF PRIORITY NCCCs

EXECUTIVE SUMMARY

This paper provides a briefing on our current policies for achieving fair sharing of increasingly scarce mooring space along the towpaths in ‘hotspot’ locations around the waterways. The British Waterways Act 1995 enables those using their boat ‘bona fide’ for navigation and not staying in a ‘place’ for more than 14 days to avoid the obligation to secure a home mooring – somewhere where the boat may lawfully be kept when not being used for cruising. Since the passing of the legislation, the number of boat owners taking advantage of this provision grew steadily and has accelerated markedly since 2007. One consequence is the emergence of informal residential boating communities along certain stretches of our towpaths in urban areas of the south and east, largely in response to the housing shortage.

We have put in place guidance for boaters without home moorings which make clear our interpretation of the legislation, but achieving satisfactory compliance with it is a goal that has persistently eluded us. The legal process is sound but extremely slow and costly. The problem has grown up over 15 years so that we now have substantial clusters of long term residents along some towpaths comprising people whose fundamental life style would be threatened by any change in our policies to tighten up implementation of the statute. The matter is now the cause of tension between the growing band of ‘non-compliant continuous cruisers’ and leisure boaters who report being deprived of the opportunity to tie up at popular short term moorings during their cruises.

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The Trust now needs to be clear on our way forward. As well as setting out essential context, this paper outlines a number of generic options for dealing with problems locally. They focus on strategic management options rather than continued reliance on legal powers, although the latter will continue to provide the last resort credible sanction against non-compliance. They will require increased effort as we start to design and implement local mooring plans tailored to different areas and locations, and there may be short term cost implications. Some of the proposed measures would however be expected to generate new income. Brief summaries of how we are trying to apply solutions on the Kennet & Avon Canal and in London are set out and the paper ends with a short discussion of resource implications.

1. BACKGROUND

Income from boat licences, moorings and associated activities accounts for over 15% of our annual turnover. It has been subject to strong growth over the past decade arising from both volume and above inflation price increases. The number of boats using our network on a long term basis grew at an average rate of c.825 each year in the decade from 2002 and now stands at nearly 35,000.

Growth in residential use of boats has been particularly strong. For many it’s a niche lifestyle choice and for others, the need to secure affordable accommodation in areas close to employment opportunities is the driving factor. As a navigation authority, we are not concerned with how people use their boats, only that they comply with licensing rules. Our job is to ensure that the navigation and associated facilities are available to all licence holders.

Quick facts In much the same way as parking control is an essential feature of smooth operation of highways, maintaining the  In 2007, we had approximately 3,200 boats amenity of the waterways requires some element of licensed as continuous cruisers. In July 2012 mooring control along the towpaths. Legislation in 1995 the figure was 4,400, an increase of 37%. gave us powers to require that boats should have a This compares with a 12% increase in total lawful home mooring, unless they were used ‘bona fide’ licences issued over the same period. for navigation. Shorthand for this is that they ‘continuously cruise’. The legislators decided (and BW  Continuous cruisers currently account for agreed) that it was reasonable that boats engaged in c.13% of all licences continuous journeys did not need to have a home  Analysis of our dataset of all boat sightings mooring. Precisely what was meant in the Act by ‘bona between 1st Jan and 31st Aug 2011 fide navigation’ and ‘without remaining continuously in suggested that over 2,000 boats coded as any one place for more than 14 days or such longer continuous cruisers had moved less than period as is reasonable in the circumstances’ has been 10km during the period. the subject of increasing and sometimes acrimonious debate within the boating community since 1995.  In spring 2012 we re-ran our analysis to concentrate on those boats which moved less The problem we face is in enforcing our interpretation of than 5 km and we are now concentrating on this widely drawn legislation, when the only sanction approximately 600 boats which move the least provided within our statutory powers is to remove the and are regularly sighted on visitor moorings. boat from the waterway. In the case of a residential The appended map shows geographic boater, this would effectively mean loss of their home. We have no desire to make people homeless, but concentrations of these boats. neither can we fulfil our statutory obligations of preserving waterway amenity for public benefit in the

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face of large scale disregard of our interpretation of the legislation (which court judges find reasonable).

Tension has been rising across different sections of the boating community about the number of boats claiming ‘continuous cruiser’ status without appearing to be ‘bona fide’ navigators.

On the one hand, we have the (relatively new and small) National Bargee Travellers Association (NBTA) completely rejecting our interpretation of the legislation for operational management purposes. They believe that any boater has the right to settle on the towpath within a specific area without the need to secure a home mooring. Our attempts at constructive engagement with them to establish how they reconcile this unconstrained ‘right’ with our statutory duty to preserve wide public benefit and amenity have largely failed. Their activities include campaigning against our moorings policies on a number of niche websites and internet groups, submitting successive complaints and requests for detailed information (under FoI) and providing support to boaters who are within our enforcement process for failing to demonstrate compliance with mooring guidance.

The 2,000 strong Residential Boat Owners Association also represents residential continuous cruisers (and those with a home mooring) and takes a constructive approach to the subject and has recently prepared its own document on the subject (http://waterwaywatch.org/rboa-produces-a-paper-on- continuous-cruising/

The Inland Waterways Association (representing c.50% of boat licence holders) is increasingly vocal in defending the rights of leisure boaters to enjoy access to towpath moorings for short periods during a cruise. They have recently called on us for “action on continuous moorers”.

Appendix A provides a short chronology of past consultation on the subject.

2. TRUSTEE ACTION

This paper asks Trustees to;

 endorse our interpretation of the BW Act 1995 as it relates to continuous cruising (and therefore the maximum length of stay in any one place)  agree to specific initiatives designed to improve understanding and fair sharing of towpaths in hotspot areas.  support the level of resource required to implement changes and enforce policy  3. LICENSING & MOORINGS POLICY/REGULATION - OVERVIEW

All boats must have a licence (average cost £700 p.a.) or river registration (average cost £400 p.a.) and EITHER a home mooring or be declared as a continuous cruiser in which case only the licence fee or river registration is paid. Licences are subject to contractual terms and conditions which are consistent with our interpretation of our statutory powers.

The legislation

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navigation throughout the period for which the consent is valid without remaining continuously in any one place for more than 14 days or such longer period as is reasonable in the circumstances.

The language of the Act is generic and, as with all statutes, requires interpretation. We therefore developed guidance for customers based on professional legal advice, including from Leading Counsel, which we believe reflects the correct legal interpretation of the Statute. The Guidelines updated in 2008 were considered in the Bristol County Court in 2010 in the case of British Waterways v Davies. The Judge expressly found that Mr Davies’ movement of his vessel every 14 days (whilst remaining on the same approximate 10 mile stretch of canal between Bath and Bradford on Avon) was not bona fide use of the vessel for navigation. We updated the guidelines in 2011 to reflect this judgement.

In summary, the guidance says:

1. the boat must genuinely be used for navigation throughout the period of the licence.

2. unless a shorter time is specified by notice the boat must not stay in the same place for more than 14 days (or such longer period as is reasonable in the circumstances); 3. it is the responsibility of the boater to satisfy CRT that the above requirements are and will continue to be met.

A more detailed treatment of the legal context including our interpretation of ‘navigation’ and ‘place’, which is critical for operational implementation of the legislation, is at Appendix B

Implementing the legislation – enforcement overview We employ an enforcement team of 50 people at a cost this year of £2.18 million of which 69% are staff costs, 16% are contract costs (for ‘Section 8’ boat removals, storage and disposal) and 9% legal fees and court costs. The team’s primary function is to maintain a low level of licence evasion, which reached unacceptably high levels before 2009. Now that this is under control, greater focus is being applied to reduction of non-compliant continuous cruising.

During August 2012, the enforcement team had some 640 NCCC cases in process. Because non- compliance is a breach of licence conditions, our standard remedy is to revoke the licence and remove the boat from the waterway. This is a long process which is further complicated when the boat is someone’s primary residence, in which case, we obtain a court order before taking possession in order to avoid claims of unreasonable behaviour. We have never been refused such an order in respect of an NCCC, although the number of cases reaching the final stage of process is small. Further detail of the processes we follow, from gathering of evidence of movement patterns over a sustained period through to submission of cases to our solicitors is contained in Appendix C

Trustees are asked to endorse our interpretation of 17(3)(c) of the British Waterways Act 1995, and our processes for implementing it.

4. GENERIC SOLUTIONS

We believe that our core policies and enforcement procedures are sound and based on good legal advice. However, while good enforcement is necessary for the credibility of our processes, it is not in itself sufficient to achieve the compliance levels we need to satisfy the great majority of our boating customers and to ensure the harmony amongst waterway users that’s needed to maximise public benefit. The process is unavoidably slow and expensive and can never be expected to achieve significant change

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CRT31 in behaviour by the considerable number of boaters who appear to be disregarding our rules. We therefore need to expand our toolkit to address the long standing non-compliance by a sizeable cohort of continuous cruisers who have established their homes along the towpath in particular areas.

Unofficial communities of residential boaters have taken root over the years because they observed that BW seemed unable or unwilling to take action to move them on. Some – or maybe many – of these do not see themselves as ‘boaters’ in the navigational sense – they have chosen to live on a boat not in order to navigate but to stay in the particular locality where their family, work and support arrangements are. Demanding that they follow mooring guidance at this late stage would be futile.

We have come to recognise over the past 18 months that constructive engagement with NCCCs will be an essential ingredient of sustainable solutions and we have started work in two waterway areas to try out slightly different approaches. These are summarised in section 5 below. The difference in approach arises from particular local circumstances, but both are likely to draw on at least some of the following generic solutions.

i. Communications

 Perception (and reality) is that our only one to one communication with NCCCs has been through formal standard warning letters and notifications which of necessity set out the legal position. Only relatively recently have we introduced an initial, more informally worded letter, but even this is probably not the easiest of read for some boaters. To broaden understanding of the reasons for our rules, we need more face to face contact with the boaters concerned.

 We have a sadly poor understanding of NCCC demography because as licence holders, there’s a reluctance to respond to our annual boater survey (probably for (unfounded) fear of being identified.). Based on informal observation, a number of groups are identifiable, such as young families with insufficient income to afford conventional homes; singles of all ages and employment profiles but with possibly a trend amongst young professionals to choose a boat to live on as their first step on the housing ladder; and we appear to host a number of disadvantaged people struggling to ‘survive’ in today’s increasingly complex world and who see the waterways as an escape from rules and regulations. To support the latter, the Salvation Army has re-invented (after a 40+ year break) a Waterways Chaplaincy service in partnership with the charity, Workplace Matters. This has been operating successfully in the Hertfordshire area for the past 3 years, working closely with our local enforcement officers. In established NCCC hotspot areas, community support and engagement of the type provided by this chaplaincy service is likely to be an important component of any solution, albeit with a broader focus to include spreading understanding of the Trust’s position and explaining new mooring options designed to reduce non compliance.

 We need to be clearer through signage and leaflets about what it means to be a continuous cruiser in a particular hotspot area. Our generic guidance document is not locally prescriptive, but it is prescriptions that many boaters claim to need. To be enforceable, such local prescriptions must have the endorsement of our local partnerships.

ii. Differentiation

 In engaging with existing NCCCs, we must be clear in developing customised arrangements, designed to enable them to continue living aboard in a particular area

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without a conventional home mooring, that we are offering this only to boaters already established as resident in the locality. It is not a policy option that should apply to new arrivals. Already established residents may be eligible to take up a newly defined ‘community mooring permit’ (subject to conditions), but the permit will not be assignable to any other person. By this means, over a period of, say, 10 – 15 years, the number of permits would be expected to decline naturally as people move on or into land based accommodation.

 In specifying this, we will of course continue to welcome genuine continuous cruisers providing they comply with mooring guidance. We recognise and value the benefits that occupied residential boats provide to the waterway scene. Generally, occupied boats are preferable to unoccupied ones as they add life and a sense of security to the area. But the continued ad hoc emergence of unofficial residential communities along lengths of towpath is something that we wish to avoid. iii. Visitor moorings

 Visitor moorings are differentiated from casual moorings along the towpath (where the time limit for staying in any one place is 14 days) by (as a minimum) welcome signs, shorter time limits and mooring rings. They are typically located at access points convenient for nearby shops and services. What they currently lack is an indication of permissible return times. This of course makes it difficult to enforce since boaters may legitimately move away for as little as 24 hours and then return. We are planning new signage which will make clear the total number of days in a calendar month that a boater may make use of the visitor mooring.

 Regardless of whether or not the boater has a home mooring, general respect for spirit of visitor mooring time limits is important as the number of boats increases and reports of congestion at these locations grows. With a total of some 870 visitor mooring sites around the country, the task of monitoring daily use as a credible deterrent to boaters from overstaying would require a substantial increase in data checker budgets. We did however complete consultation on the principle of extended stay charging in 2009 and are now in a position to introduce monitoring and invoicing for overstay permits in hotspot areas, if we increase our monitoring resources. We do not expect income from permit sales to match the monitoring costs. We have considered the possibility of seeking volunteers for this work but in hotspot areas, tensions amongst boaters would make this an unattractive volunteer proposition. iv. Increased provision of long term residential moorings A little under a third of continuous cruisers indicated in our recent national boater survey that they would like to secure a long term residential mooring. We briefed the BW board on this subject in July 2011 and Stuart Mills is now leading a project to develop additional sites in London and the South East. The planning environment has eased following a statement by the Housing Minister in August 2011 encouraging local authorities to grant consents, pointing out that these moorings would qualify for the New Homes Bonus (and therefore additional government grant to the authority).

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v. Greater flexibility in mooring options To cater for boaters who like to continuously cruise during the summer but remain in a fixed location in winter, we have developed the practice of offering winter mooring permits bookable by the month along up to 50% of the length of some visitor moorings between 1st November and 31 March each year. Many commercial marinas of course also offer this facility, but tend not to attract residential boaters. It is mooring along the towpath that tends to be the choice of most continuous cruisers. For this reason, local solutions might also embrace the offering of shorter term mooring agreements by our commercial moorings business, particularly as demand for our three year and one year agreements has weakened with the onset of recession.

Trustees are asked to endorse the above principles as a means of boosting our ‘toolkit’ for reducing non- compliance and improving harmony amongst waterway users.

5. CURRENT LOCAL PROJECTS

London (Regents Canal, Hertford Union and lower River Lee) and the western section of the Kennet & Avon are the two largest hotspot areas where we have been seeking solutions over the past two years. Brief updates on these are below. London and River Lee

We regularly observe around 550 boats without home moorings moored along the towpath of London’s waterways (Regents, Hertford Union and River Lee). Our project objectives here are to achieve:  “A vibrant waterway, well served and well connected, with everyone getting on well.”  Changed mindsets: Better engagement and respect between users. A sense of the river as a (collection of) neighbourhoods. Improved stakeholder perceptions of boating and boaters. Improved perception of CRT as the navigation authority.  Fair sharing: Agreed understanding of what ‘capacity’ means and fair sharing of desirable space between users and uses, leading to an improvement in mooring provision, quality and choice for visitor, leisure and residential moorings.  Social enterprise: a new approach to improve facilities, meet needs and improve the river corridor  Overall cost reduction: Net reduction in costs for the Trust compared to current spend + liabilities. Reinvestment of surplus into the project objectives and/or the Trust’s charitable objects.

We have retained social enterprise and community engagement specialists, Locality (formerly the Development Trusts Association) to lead the supporting work programmes. Progress is being made, but is very slow, with an underlying difficulty being that of establishing an effectively constituted body which can speak for people whose motivations and objectives vary widely. As a means of building trust and understanding, we have recently entered into a short term ‘meanwhile’ lease for the (publicly funded) Waterside Centre at Stonebridge Lock on the Lee in Tottenham. Under this, London (residential towpath) boaters in partnership with three other local community groups will as tenants, develop a sustainable business plan for optimising use of the centre. A ‘listening’ programme is underway, led by community organisers funded through the government’s ‘big society’ programme with community conflict

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resolution techniques being applied. The disruption to mooring arrangements caused by the Olympics has slowed progress as many boaters moved away from the area, but we are hopeful that a London Boaters group will soon achieve incorporation and the capacity to start creating social enterprise ventures with continued help from Locality.

Kennet & Avon Canal (West)

We regularly observe approximately 150 boats without home moorings between Bath and Devizes who do not comply with our mooring guidance.

Our framework plan issued in August has the following aims:

a. To protect the amenity of the waterway for widest public benefit b. To improve access to popular visitor moorings by boats being used for leisure and holiday purposes, and to stretches of ‘unmoored’ water by anglers c. To provide a means by which boaters without a home mooring currently resident between Bath and Devizes may continue with their chosen lifestyle without the need to move every 14 days. d. To clarify local rules and achieve understanding and compliance through effective, positive, communications and support, reducing dependence on requirement for exercise of legal enforcement powers.

Key elements within the plan are: 1. Designate visitor mooring stretches; sign them clearly at start and end points; specify ‘return rules’ in the form of max. x days within any calendar month. 2. Extended stay charges for breaching time limits at visitor moorings. Sufficiently frequent sightings by professionally recruited paid staff to support this – warning notes c. 24 hours ahead of when extended stay charge kicks in. 3. New type of “Community” mooring permit for continuous cruisers who have been recorded by the Trust as being resident on the towpath in July 2012. Approx. 20 locations each accommodating up to c.10 boats to be designated where permit holders can stay for up to 28 days at a time before moving on to another one – or any other length of towpath providing they comply with the rules for that location. i. Subject to an annual fee pegged to a percentage of the average rate for our directly managed sites in the area. ii. Permit holders will be treated as having a home mooring and permits will be subject to all applicable terms of the mooring agreement for our directly managed moorings. iii. Eligible for a discount on winter mooring fee (i.e. where you can stay put for 5 months) iv. Not assignable – only available to existing licence holders (not their boats) who have already established ‘residency’ in the area. Eventually, the number of ‘community’ berths will decline as people move away naturally. 4. Define neighbourhoods for boaters without home moorings and, using additional Trust resources, enforce continuous cruising rules (14 day limit) using existing processes 5. Towpath presence – current enforcement processes apply but a community worker to be employed for a fixed term to help with communications and to support boaters to in resolving personal

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difficulties. (We are planning to support an extension the Waterways Chaplaincy and a temporary mooring warden for this purpose) 6. Signage, maps and other information published in paper and electronically.

We have placed this framework plan on our extranet for the waterway partnership and navigation advisory group and have mailed it to national boating organisations and those involved in last year’s consultative process. IWA, RBOA and APCO had requested updates on progress prior to completion of the plan and we took those opportunities to share the detail before publishing. On the basis of these informal discussions, we believe that the approach, if we succeed in implementing it, will meet wide approval from traditional leisure boaters, the boating trade and many residential boaters.

Implementation detail, particularly the decisions on zoning different stretches for visitor/community/no- moorings, is the next significant challenge. The waterway partnership has agreed to develop advice for us on these and other detailed aspects for which good local knowledge and perspectives are essential. It appears that the partnership will require support in the form of a professional facilitator for this work and we are in the process of appointing a suitable contractor.

6. RESOURCING

We have committed £33k for the current year to consultancy and community capacity building for London, and a further sum (up to c.£5k) may need to be committed for completing the implementation plan for K&A moorings. These sums are within current budget provision.

Our Enterprise team will work with Workplace Matters to seek external funding for community support work for the K&A during the implementation phase for the new mooring plan once it is confirmed.

Once we are ready to implement, signage costs will be the major item of expenditure but the scale of cost is dependent on the number of locations which is not yet known. Assuming that the uptake of the Community Mooring permit proposal is in line with our predictions, income from permit sales should more than cover these and other setup costs.

We anticipate that local partnerships may identify other problem areas needing specific NCCC strategies. Where the geographical scope is quite limited, a simple approach of updating visitor mooring signage and implementing extended stay charges may be sufficient. Elsewhere, there may be need for approaches akin to our two existing project areas. We need to factor in this contingency into the 2013/4 business planning round.

We are not planning at this stage to cut the budget for legal fees associated with enforcement cases. Whilst we hope that the need for legal action will decline as the ‘softer’ initiatives outlined in this paper start to bear fruit, it is important to maintain the deterrent effect of legal enforcement.

Trustees are asked to endorse commitment of resources to this programme as outlined above.

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7. CONCLUSION

Trustees are asked to consider the actions highlighted at the ends of sections 3, 4 and 6.

Simon Salem Marketing & Fundraising Director September 2012

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APPENDIX A: CHRONOLOGY OF CONSULTATION ACTIVITIES, 2002 - 2012

With the passing of the British Waterways Act of 1995, BW was empowered to refuse to licence a boat which did not have a home mooring – unless the boat was used ‘bona fide for navigation’, ‘not staying in the same place for more than 14 days’. In signing a licence application, the boater confirms a commitment to “bona fide navigate” if there is no home mooring. Growth in residential boating had already started at this time, and establishment of small groups of boats within a limited area in London, on the western K&A, southern GU and other suburban areas was becoming a feature of the local canal landscape.

In 2004, following public consultation, we introduced mooring guidance for continuous cruisers which set out BW’s interpretation of the legislation to help those without home moorings to comply with the Act.

The absence within the statute of clear definitions of ‘bona fide navigate’ and ‘place’ contributed to growth in non-compliant continuous cruising (NCCC) , as did growing evidence of a shortage of long term mooring provision. As a possible means of stemming growth in NCCC, consideration was given in 2002/3, in 2005/6 and again in 2007 (by BWAF) to modifying the licence fee structure so that those without a home mooring would pay significantly more for their boat licence. No national boating organisation supported this approach in the associated public consultations and the plan was dropped.

The shortage of affordable housing in the South East is a major driver to accelerating demand for boats for residential use, and people buy boats to live on without securing a home mooring because they know they can (usually) ‘get away with it’. We recognise the need for increased provision of long term residential moorings, and a statement by the housing minister in August 2011 was helpful in encouraging local planning authorities to take a more supportive stance, confirming that the New Homes Bonus is payable in respect of residential moorings. The property director is leading a project to create new residential moorings in London.

We last consulted on this subject during 2009 and in 2010 updated our national moorings policies as a result. We then attempted to implement new moorings control processes as outlined in the policy through development of local mooring strategies for the western end of the K&A and the River Lee.

For the former, we established a steering group representing all types of local boater and parish councils. After nearly a year of discussions, there was little consensus, but we took useful outputs from their work and have recently published our framework plan on which Trustees were briefed during their July meeting.

In February 2011, in an endeavour to fast track progress in London, we presented for public consultation a tentative mooring plan which defined movement requirements for continuous cruisers in the Lee Valley. This triggered vociferous opposition by unaffiliated residential boaters living along the towpath and an effective PR campaign against our proposals. We shelved the proposals in August 2011 in favour of a strategy of engagement with boaters concerned with the aim of establishing a more effective social enterprise model for creating a happier environment for all on London’s waterways.This is a long standing issue, but the leisure boating community, the boating trade and some land based communities are increasingly concerned about the impact on their enjoyment of boating of increasing number of residential boats tying up for long periods along the towpath in the same place in some areas of our network. There is an increasing polarisation of views and the creation of the Trust has raised expectations that policy will be developed to progress this issue.

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APPENDIX B: LEGAL BACKGROUND – MORE CONTEXT

Section 17(3)(c) British Waterways Act 1995 states that BW may refuse a licence (“relevant consent”) unless (i) BW is satisfied the relevant vessel has a home mooring or: “(ii) the applicant for the relevant consent satisfies the Board that the vessel to which the application relates will be used bona fide for navigation throughout the period for which the consent is valid without remaining continuously in any one place for more than 14 days or such longer period as is reasonable in the circumstances.

In summary, the guidance says:

1. the boat must genuinely be used for navigation throughout the period of the licence. 2. unless a shorter time is specified by notice the boat must not stay in the same place for more than 14 days (or such longer period as is reasonable in the circumstances);

3. it is the responsibility of the boater to satisfy the Trust that the above requirements are and will continue to be met.

It provides definitions as follows:

“Navigation” means travelling on water involving movement in passage or transit. We put reliance on the meaning given to the word in the case of Crown Estate Commissioners v Fairlie Yacht Slip Limited. Whilst a decision of the Scottish courts, the English courts can, and have, taken the views of the Scottish Judge into account. In that case the basic concept and essential notion of the word “navigation” was said to be “passage or transit”, the underlying concept being one of movement.

“Place” means a neighbourhood or locality, NOT simply a particular mooring site or position. The Shorter Oxford Dictionary gives some 8 separate principal meanings for the noun ‘place’. Therefore the rules of legal interpretation require the meaning that most appropriately fits the context to be used. Since ‘navigation’ means travelling by water and ‘travel’ means a journey of some distance, the word ‘place’ in this context is used by the Act to mean an “area inhabited or frequented by people, as a city, town, a village etc” (meaning 4b in the Shorter Oxford Dictionary).

And the guidance which follows from the above is:

 to remain in the same neighbourhood for more than 14 days is not permitted. The necessary movement from one neighbourhood to another can be done in one step or by short gradual steps. What the law requires is that, if 14 days ago the boat was in neighbourhood A, by day 15 it must be in neighbourhood B. Thereafter, the next movement must normally be to neighbourhood C, and not back

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to neighbourhood A (with obvious exceptions such as reaching the end of a terminal waterway or reversing the direction of travel in the course of a genuine cruise).

 What constitutes a ‘neighbourhood’ will vary from area to area – on a rural waterway a village or hamlet may be a neighbourhood and on an urban waterway a suburb or district within a town or city may be a neighbourhood. A sensible and pragmatic judgement needs to be made.

 It is not possible (nor appropriate) to specify distances that need to be travelled, since in densely populated areas different neighbourhoods will adjoin each other and in sparsely populated areas they may be far apart (in which case uninhabited areas between neighbourhoods will in themselves usually be a locality and also a “place”).

 Exact precision is not required or expected – what is required is that the boat is used for a genuine cruise.

 Circumstances where it is reasonable to stay in one neighbourhood or locality for longer than 14 days are where further movement is prevented by causes outside the reasonable control of the boater. Examples include temporary mechanical breakdown preventing cruising until repairs are complete, emergency navigation stoppage, impassable ice or serious illness (for which medical evidence may be required) Such reasons should be made known immediately to local Trust enforcement staff with a request to authorise a longer stay at the mooring site or nearby. The circumstances will be reviewed regularly and reasonable steps (where possible) must be taken to remedy the cause of the longer stay – eg repairs put in hand where breakdown is the cause. Where difficulties persist and the boater is unable to continue the cruise, the Trust reserves the right to charge mooring fees and to require the boat to be moved away from popular temporary or visitor moorings until the cruise can recommence. Unacceptable reasons for staying longer than 14 days in a neighbourhood or locality are a need to stay within commuting distance of a place of work or of study (e.g. a school or college).

 The law requires the boater to satisfy us that the bona fide navigation requirement is and will be met. It is not for the Trust to prove that the requirement has not been met. This is best done by keeping a cruising log, though this is not a compulsory requirement. If however, we gain a clear impression from our regular boat sightings that there has been limited movement insufficient to meet the legal requirements, we can ask for more information to be satisfied in accordance with the law. Failure or inability to provide that information may result in further action being taken, but only after fair warning.

 Failure then to meet the movement requirements, or to provide evidence of sufficient movement when requested, can be treated as a failure to comply with s.17 of the 1995 Act. After fair warning the boat licence may then be terminated (or renewal refused). Unlicensed boats must be removed from CRT waters, failing which the Trust has power to remove them at the owners cost.

 In any case where the boat is the licence holder’s primary residence, we seek a court order before exercising these powers. This provides the judge with the opportunity to consider the proportionality of the sanction in the context of the Human Rights Act. In the small number of cases that have completed the full course of our enforcement processes and reached the law courts, judges have always upheld our case.

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APPENDIX C: THE ENFORCEMENT PROCESS

For the control of both licencing and mooring, all boats are monitored every 2-4 weeks regardless of their mooring status. ‘Data checkers’ walk each stretch of towpath at least twice monthly. A ‘sighting’ is recorded using GIS enabled hand-held devices – the boat’s index number, date and location is recorded.

Sightings of boats without a home mooring are analysed regularly to build up a picture of their movements over time. In locations where the same boats are sighted repeatedly and consistently in the same place, more frequent visits will be made to help us form a view of whether the guidance for boats without a home mooring appear to be being breached

Where a boat is left on inland waters owned or managed by the Trust without lawful authority, we have statutory powers to remove it. If the boat is sunk, stranded or abandoned on our waterways, a statutory notice can be served under Section 8 of the British Waterways Act 1983 permitting us to remove the boat after a minimum of 28 days’ notice. We can also serve notice under Section 13 of the British Waterways Act 1971 to remove a houseboat that is moored unlawfully or without a valid licence after a minimum of 28 days notice. The procedure that is followed in each case will depend on whether the boat is occupied (“liveaboard”) or not:

Liveaboard Procedure Our policy is to serve a series of letters on the owner/occupier warning them of the consequences of failure to remove the boat. This correspondence takes several months and gives the owner/occupier ample opportunity to remedy matters and discuss any queries with the Trust. If, despite the opportunities afforded, the boat remains on Trust waters without lawful authority, we will serve statutory notices under Sections 8 and 13 (see above).

Upon expiry of the minimum 28 day notice period the Trust will notify the owner/occupier that the file is being transferred to solicitors to issue Court proceedings. Court proceedings are then issued for declaratory and injunctive relief and are served on the owner/occupier. The owner/occupier has then an opportunity to defend the case and have a fair trial on the merits. The Court can then review the procedure followed and determine the scope (if any) of the relief granted to us.

In most cases however, once the enforcement procedure commences the owner or occupier of the boat removes it from the water, obtains a mooring or starts to follow the mooring guidance before we reach the stage of issuing legal proceedings. Cases are generally labour intensive

Non-liveaboards Where a boat is sunk, abandoned or otherwise not occupied, the Trust will serve a notice under Section 8 requiring removal from its waters within 28 days. If the notice is not complied with we can remove the boat from its waters without issuing Court proceedings. Both of these procedures are human rights compliant.

The overwhelming majority of continuous cruiser enforcement cases which we open are resolved or closed without reaching court. We have sent a total of 19 cases to our solicitors since March 2009. Of these: o 4 settled in court in our favour o 4 awaiting hearing date o 5 resolved without going to court o 6 remain in process o The average costs incurred for the 11 cases closed and billed up to July 2011 is approximately £8,100

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APPENDIX D: HOTSPOT MAP OF PRIORITY NCCCs

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Proposal for a Strategic Plans Committee of the Board

1. BACKGROUND

1.1. The Trustees have expressed a wish to create a forum where more detailed discussion can take place on financial matters and some have suggested a financial committee should be established.

1.2. In discussion with various Trustees the following issues arose: 1.2.1. The Property and Investments Committee does a very good job of scrutinising the property and JV income. It could easily also embrace the other income streams within Stuart Mills directorate i.e. Utilities and Moorings. 1.2.2. Trustees wanted to have time to understand the expenditure choices that could be made/have been made. In particular the choices around maintenance spend and expenditure on other charitable objectives. 1.2.3. No Trustees raised any financial accounting policy issues or the need for a forum to discuss these. 1.2.4. It was felt by some that the Audit Committee should not be the Committee that scrutinises expenditure. 1.2.5. It was also felt that the Board must not delegate responsibility for its strategic financial responsibilities and that most strategic choices should be taken by the full Board where the full balance of opinion exists.

2. THE EXECUTIVE’ PERSPECTIVE

2.1. Income

2.1.1. Regular scrutiny and monitoring of the Trust’s income is important for obvious reasons. There are often strategic, tactical and practical issues to be agreed during the course of the year and so a forum where Trustees can be more fully engaged would be useful. 2.1.2. The Investment and Property Committee already covers % of earned income and it could easily encompass BWML, Utilities and Moorings. 2.1.3. Boat Licences raises £ income p.a. The key decision point is the annual Licence fee renewal. Given the importance of this decision we consider it should be made by the full Board. Licence evasion is also a key measure to be monitored and this is one of the proposed KPI’s to be reported to the Board .. 2.1.4. Fundraising is important to the Trust both reputationally and strategically. We therefore believe this should be discussed and considered by the whole Board as a regular agenda item.

2.2. Expenditure

2.2.1. There are three main expenditure categories:  National Teams - in effect the core overhead of the Trust  Waterway Maintenance and Major Works  Museums and Attractions

2.2.2. National Teams:

There is a large expenditure area where there has to be constant pressure to keep costs down and deliver efficiencies. Much has been achieved in recent years but more can and will be done. The real decisions are strategic and materialise during the business planning process. Usually they are around restructuring, office costs, outsourcing, pay review etc. We therefore believe Trustee involvement would be most effective during the Business Planning Process.

2.2.3. Waterway Maintenance and Major Works:

Expenditure on waterway maintenance has to take account of achieving safety standards, repairing high priority defects, maintaining customer service, towpath and vegetation standards, carrying out inspections and planned preventative maintenance as well as doing intermediate repairs and dredging. Detailed processes have been developed to prioritise and allocate funds to achieve these requirements. The overall levels of expenditure are also compared with the Steady State model. The largest element of cost is payroll but outsourced contractors are being used more extensively.

Most of the decisions about resource allocation occur during the business planning stage.

2.2.4. Museums and Attractions:

Here costs exceed income by about £800k p.a. There is a Museums and Attractions Partnership who will be looking in detail at most of its operating plan and outcomes during the year. Trustee involvement is probably best directed at the business planning stage where the annual costs can be set and priorities agreed.

3. CONCLUSION

3.1. Trustees can best influence strategic resource allocation decisions when the 3 year operational plan is put together each year. This is when allocations between the many competing demands of the business are made. 3.2. There is more need for regular review and involvement in the income earning activities of the Trust. The Board needs to approve certain high value transactions and there are often tactical decisions to be made which should involve the Trustees. 3.3. Once the plan has been agreed there are fewer strategic decisions required in year on most of the major expenditure areas. For core waterway and major works the Board need to review performance against plan during the year and improved reporting is being worked on for future Trustee meetings. If additional resources become available in year then the Board should be engaged in deciding where it is allocated.

4. PROPOSAL

4.1. The Investment and Property Committee should review income earning activity in the following areas:  Property  Utilities  Mooring  Joint Ventures  BWML

4.2. The full Board should receive updates and review the fundraising activity at every Board Meeting. 4.3. The Board should establish a Strategic Plans Committee (“SPC”) to work with the Executive in compiling the Operational Plan each year. By being involved in building the operational plan and having an overview of the individual directorate plans the committee will be able to influence strategic decisions on risk management and resource allocation. 4.4. I suggest the process could operate along the following lines:

Sept: The executive to draft strategic priorities for the forthcoming planning round and submit to the Board for approval.

Oct/Nov: SPC meets with the Executive to refine the strategic priorities and decide what the implications are for the new 3 year operational plan of the Trust. Agree the priorities and high level strategic instructions to managers within the Trust so they can draft their individual plans

Some of the decisions around resource concern accounting policies and treatment of various transactions. For example the Wood Wharf and Easynet deals, the policies and issues around General and Restricted Reserves, the draft 3 year Plan surplus/deficit and the issues around surplus cash balances. Some of these discussions may be highly technical and might best be handled in the audit committee but will need to be coordinated with the SPC

Nov: Report to the Board on:

 High level income forecasts for plan period  Refined strategic priorities and how they are manifested in the instructions to managers  Likely downsides of the above (i.e. what cannot be done or cannot be prevented)

Dec-Jan: SPC considers high level results from Department draft plans and refines resource allocation where necessary. Considers any initial feedback from Waterway Partnerships

Jan: Board receives first drafts of:

i. Financial Plan ii. Operations Plan for publication

Feb/Mar: SPC further considers responses from waterway partnerships, and directorates. Finalises resource allocations decisions. Approves final draft of Operations Plan. Approves final draft of Financial Plan.

March: Board signs off Financial and Operational Plan

Sept/Oct: SPC reviews performance to date and agrees any changes to strategic resource allocations resulting from increase/decrease in net income.

Decision Report

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BOAT LICENCE FEES FROM APRIL 2013

It has been our established practice to notify private boat licence holders at this time of the year of the increase in licence fees to apply to licences starting on 1st April next.

In November 2010, we published the appended statement about increases that we expected to apply in 2011, 2012 and 2013. This means that the default assumption for 2013 is that we increase the price of the12 month private pleasure boat licence by 2% above the July 2012 consumer prices index, i.e. 2.6% + 2% = 4.6%.

Commercially confidential material removed

Changes in fees and changes in number of boats licensed over the past three years have been as follows

12 month licence % increase in % change in fee for 15m boat licence fee number of boats licensed April – Aug incl. April 2009 £698 8.5% 0% April 2010 £705 1% +5%* April 2011 £742 5.2% 0% April 2012 £789 6.4% -1% April 2013 £825 4.6% proposed * This increase is probably attributable to the improvement in enforcement that followed creation of central team in 2009 rather than genuine change in the market

Commercially confidential material removed

Trustees are asked to confirm that fees for private boat licences should increase by 4.6% from April 2013.

Commercially confidential material removed

Simon Salem Marketing & Fundraising Director

September 2012

Appendix – public statement on licence fees, Nov. 2010

Licence fees from April 2011 While BW’s grant settlement for 2011 is still to be announced, we have certainty that it will be at a substantially reduced level – DEFRA’s reduction is c. 30% over four years and this would translate to an annual cut for BW (England & Wales) of more than £3 million for 2011/12 with further reductions in the following years. We will accommodate this primarily by cutting expenditure, but an increase in licence charges will reduce the impact on maintenance standards. The depressed state of the property market means there is little prospect of additional income from our commercial activity in the short term.

The standard, 12 month pleasure boat licence fee will therefore increase by 5.1% from April 2011 (before VAT is added). This represents a 2% increase above the current value of the government’s consumer price index (CPI) and is expected to generate additional waterway maintenance budget of c. £0.85 million for 2011/12.

The Gold licence fee will increase by 2.5% (before VAT). This is the weighted average of the increases pending for normal licences on BW and EA waters.

We are often asked by boat owners for some longer term indication of increases i.e. beyond 2011. Given current uncertainty about the economic situation, it is not easy to make firm predictions. However, we can share the fact that our business plan for 2012 and 2013 projects licence price increases of 2% plus inflation in each year. We might be able to moderate these increases if our plans to introduce extended stay charges and transient mooring permits result in income significantly greater than the costs of collection from 2012, and if market conditions allow our other businesses including property to perform to plan. INFORMATION REPORT

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MEMORANDUM TO THE BOARD

CHIEF EXECUTIVE’S REPORT – SEPTEMBER 2012

1. Health and Safety Report

The Health & Safety Report is attached (Appendix 1).

2. Trustee Papers

These papers have been sent in electronic form to all Trustees and in hard copy to those who requested one at the last meeting (TH, JD, JB and LB) In response to Trustee comments we have change the format of the Director Reports. This pack contains the following reports which we propose as being standard for all future Trustee meetings:

Chief Exec’s Report: A brief summary of all significant activity over the past two months and major issues looking forward.

Finance Director’s Report: A new style with new financial summary and more in appendices

Fundraising Report: An update on fundraising activity with particular emphasis on voluntary giving as this is a new area of activity for the Trust.

Operational Report: Report and analysis on spending and outputs in respect of waterway maintenance and repairs.

In addition to these standing reports there will be individual papers on matters requiring Trustee decisions together with any special topic papers requested or deemed necessary from time to time. I would welcome feedback on the above.

3. Extranet

We have created an extranet facility for use by Trustees, Council, Partnerships and Advisory group members. This internet based facility allows secure access for authorised users. The extranet can be accessed from any computer and also works from mobile devices such as tablets.

So far the site is being used by both Partnership and Council members and we will shortly be emailing login details to Trustees so that you can access board papers and a Trustees calendar on line. A user guide will be sent to you with the log in details which you will be able to amend once you have accessed the system.

The extranet is structured into sections one for each of the member groups above, the Trustees area is secured for only Trustees and Directors whereas the Trustees have read access to all areas. The Council members have their own area, Partnership members have a similar but separate area. Each partnership also has its own folder but can view the notes and progress of other partnerships to encourage sharing. Canal & River Trust staff also have access to the extranet (except the Trustees area).

Members can add and contribute to the site and there is a discussion board and a notice board facility in each area. To date the site is being well used by members of the Partnership and the content is being managed by waterway nominated administrators.

4. Ombudsman Report

The Ombudsman has produced her report for 2011-12 which is also her last report before she leaves office. The report is attached for information. A small group of Trustees is meeting the Ombudsman after the Annual Public meeting to discuss the report.

5. Cabinet Reshuffle

The Secretary of State for our sponsoring Department, DEFRA, changed in the recent cabinet reshuffle. Caroline Spellman was replaced by Owen Patterson. A brief biography from his website is given below and we are already in touch with his office to arrange a meeting with the Chairman and a waterways visit. Richard Benyon remains the Minister responsible for inland waterways.

Owen Patterson

Owen was born in Whitchurch, Shropshire. He read History at Cambridge University, before joining his family leather business, becoming Managing Director in 1994. He speaks French and German. In twenty years in business he travelled all over the world, becoming President of COTANCE, the European Tanners’ Confederation.

It was this experience which drives his political beliefs. Owen is a passionate supporter of localism, free enterprise and less interference in people’s lives. He believes that taxation and bureaucracy should be minimised to give people the best chance to exercise their talents. He is a strong defender of the United Kingdom.

During the past 13 years, he has fought on behalf of his constituents for better health provision, local Primary Schools, improved transport services, Post Offices, local Magistrates Courts and against regional police forces.

As Agriculture spokesman he became an expert on bovine TB and campaigned for the dairy industry. He travelled all over the North Atlantic to produce a landmark Green Paper on Fisheries. As Shadow Minister for Roads, he researched best practice and the latest ideas from Europe and North America.

In July 2007 he was appointed Shadow Secretary of State for Northern Ireland and he tried to visit Northern Ireland every week, spending days with MPs and MLAs from every party. He has visited schools, businesses and community projects; and he has immersed himself in Irish history and the local economy.

In May this year he was appointed Secretary of State for Northern Ireland and was made a Privy Councillor.

POSITIONS HELD: MP for North Shropshire, May 1997 – Conservative Whip, 1999-2001 PPS to the Rt Hon Iain Duncan Smith, Sept 2001 – Oct 2003 Shadow Minister for Agriculture, Oct 2005 – Nov 2006 Shadow Minister of State for Transport, Nov 2006- July 2007 Shadow Secretary of State for Northern Ireland, July 2007 - May 2010 Secretary of State for Northern Ireland, May 2010 - PROUDEST POLITICAL ACHIEVEMENT: Helping to keep Whitchurch Community Hospital open

INTERESTS OUTSIDE OF POLITICS: Horses, racing and eventing Trees Architecture History

6. IWA Memorandum of Understanding

We have had very productive discussions with the IWA about working more closely for mutual advantage. We have set out the principles in a Memorandum of Understanding which we intend to sign shortly. The Memorandum is attached for information.

7. Freight Advisory Group

I have asked David Quarmby to Chair this advisory group. A brief biography is set out below. We are now in the process or appointing members and plan to have the first meeting in early November.

Dr David Quarmby

David Quarmby is a respected transport professional who has accumulated a wealth of experience encompassing business, government, public bodies and academia. In 1962 he graduated from King’s College Cambridge with a first class degree in Engineering and Economics. He then moved to Leeds University where he completed a PhD while working as a Lecturer in Operational Research and Transport Economics.

David has a long list of business achievements and appointments. These include; Managing Director of London Buses, Joint Managing Director of Sainsbury's, Chairman of the English Tourist Board, Chairman of the Docklands Light Railway, Deputy Chairman of the Millennium Dome company, and Chairman of the Strategic Rail Authority. Government bodies at home and abroad continue to seek David's research and advice on matters such as tourist transport systems and environmental sustainability, and in 2003 he was awarded a CBE. David has been associated with Edinburgh Napier University’s Transport Research Institute since its formation 1997, and became Chairman of the Institute in 2006.

8. Investment Policy & Strategy

Work is under way on both the Investment Policy and the Investment Strategy for the Trust. The purpose of the Investment Policy is to set out what the Trust is aiming to achieve through its investments. It provides a written framework for shaping the investment strategy and plans. It is intended that once agreed the Policy could remain in place for a number of years until such time as the requirements or circumstances of the Trust change. The Policy envisages that strategies and plans will be created that address the requirements and guidance in the Policy. Work is also ongoing to develop the Investment Strategy. Meetings have been held with various investment advisors and others are planned. It is expected that early thoughts will be reported to the Investment Committee shortly.

9. Olympic Update

The restrictions and towpath closure have now been lifted. Despite some logistical problems in the early days, close working with both LOCOG Security and the Metropolitan Police has resulted in a smooth operation that has maintained a very high level of security. There were no reported security incidents on the waterways around the park.

With respect to income and expenditure, over £2m was secured from the letting of berths in Canary Wharf and £80,000 from inland waterway boats. Added to this, planned expenditure was effectively managed leading to significant efficiencies with no impact on quality and quantity of work undertaken. By way of example, the River Lee from Limehouse to Lea Bridge was largely cleansed by Land & Water under the Olympic Park contract (funded by LOCOG) leading to significant savings to our budget. This is likely to result in the generation of a net contribution of close to £1m (versus forecast at around £600k). Additional to this “profit”, our work on the waterways of London have resulted in extensive legacy benefits, lock repairs, facility improvements including new mooring rings, water points and intensive cleansing and graffiti removal.

The water transport operator, Water Chariots, finally signed our lease just prior to the opening ceremony and operated a service throughout the main games. Their bookings were, however, much lower than predicted and, regrettably, they ceased trading midway through the Paralympic Games and are now in administration. There is limited financial impact on the Trust as the majority of monies due were paid in advance. The Trust is working closely with the operator to consider future opportunities for the purpose built boats.

We are in discussion with the legacy organisation about future proposals for the use of the stadium for events. There is a suggestion that the towpaths around the stadium should be closed for up to 99 events annually due to security concerns. This will have a significant impact on the future use and enjoyment of the waterways and we are resisting these proposals.

10. Marketing & Fundraising

Trustees have received separate papers on:  Non-compliant continuous cruising  Boat licence prices 2013/14  Individual/corporate fundraising

Other items of interest:  A Memorandum of Understanding is to be signed with the Inland Waterways Association on 27 September. Another with the Residential Boat Owners association is almost complete. Similar agreements – Partnership Working Agreements – for local partners are being discussed with the Kennet & Avon Canal Trust, the Lichfield & Hatherton Canal Trust and the Birmingham Canal Navigations Society.

 Our third Winter Works campaign will begin in November. We expect to build on last year’s strong Open Day successes and we are now also promoting the Trust and fundraising. We will feature 170 sites in total: . 14 with full scale Open Days . c.17 with site specific interpretation and PR . c.140 with generic interpretation

 Enterprise senior managers are working closely with waterway partnerships and planning colleagues on the preparation of each waterway’s strategic plan.  I met Bob Bewley, Chief Operating Officer of HLF as part of our approach to develop a more strategic relationship. We have recently gained a Stage 1 pass for our HLF bid for works to repair Marple Aqueduct  The volunteer and fundraising teams have submitted a major employee volunteering (plus cash contribution) bid to United Utilities for a partnership in the North West. The lead and introduction for this came from the waterway parthership.  The new extranet has gone live and is playing a growing role in supporting waterway partnerships and Council.  Our new Volunteer Advisory Group has met for the first time and looks set to provide useful advice and perspective on our work in this area.  Restructuring of our volunteer management resource and the introduction of the ThankQ our new CRM system has meant that some of our recording of volunteer time input has been delayed or not completed fully. We believe our figures to July this year therefore (see KPIs) are underestimates and we are working hard to correct this.  A full Employee Survey begins in October using research agency Harris Interactive  We are holding the first Senior Management Briefing under the Trust on 13 November 

[Confidential information redacted]

ROBIN EVANS September 2012

CRT 32 APPENDIX 1

HEALTH & SAFETY MANA GEMENT SUPPLEMENT – SEPTEMBER 2012

1.0 INTRODUCTION 1.1 This report covers the period July and August 2012. The format of the report is in line with the format of reports presented at each Board meeting during the year and covers the four areas of risk – Assets, Visitors, Contractors/Volunteers, and our People.

2.0 ASSETS 2.1 Asset Management 2.1.1 AIP2008 Nothing material to report this period, with good compliance in all areas of AIP. 2.2 Property 2.2.1 The Contractors Plan developed as part of the property maintenance term contract with (Vinci) Facilities is now being implemented and together with the software and management systems within the property management framework contract (DTZ) this give comfort that routine cyclical activities are programmed and undertaken in a timely manner. By working with Vinci new methods of safe access to buildings to undertake short term maintenance works are being developed, where the access is over water.

3.0 VISITOR SAFETY 3.1 20/8/2012 - Lock 41 Trent and Mersey Canal. A female boater was moored on a lock landing waiting for partner to prepare the lock for boat entry. At the start of the entry manoeuvre she pushed the front of the boat away from landing and turned towards stern. Her leg slipped into a small hole at back of sheet piles which was not visible due to grass and soil covering. She suffered a broken ankle and was taken to hospital. The hole was caused by erosion of material through corrosion holes in the piles. An investigation is underway.

3.2 The analysis of the incidents involving members of the public reported for the 5 months to the end of August shows 231 incidents were reported which involved loss or injury. The percentage we identified following investigation which had an infrastructure related cause (i.e. a defect requiring remedial action) was 10.4%. This level is just above our accepted risk threshold of 10%.

4.0 CONTRACTORS 4.1 There was 1 reportable injury to a contractor.

13/07/2012 - Bridge 79, Oxford Canal. 2 Fountains operatives were hedge cutting at the bridge. One operative had a short handled hedge cutter and one was working with a long handled machine. They were starting a new section beyond the bridge and were working too close together. The operator of the long handled machine cut the upper right arm of his colleague. The injured operative was given immediate first aid on site then taken to A&E where he received 8 stitches. Both operatives have relevant National Proficiency Test Certification for this equipment. Poor working practice and inattention by one of the operative is the primary cause. There was admission of hurrying to get the job done due to poor weather conditions at the time. The following actions are underway by the contractor:

 A tool box talk with all operatives within all teams regarding safety distances of equipment used. Referring directly to the incident to learn from the incident.

 An item will be published in Fountains National monthly SEQ Safety and Environmental highlighting this accident and the learning gained from it.

5.0 VOLUNTEERS 5.1 There have been no reportable injuries to volunteers since the last report.

6.0 EMPLOYEE OCCUPATIONAL HEALTH AND SAFETY 6.1 Lost Time Injuries 6.1.1 The trend line in total Lost Time Injuries continues to show improvement as does the number of overall injuries – see following chart. Many of the incidents are near their limit of severity, with minor manual handling injuries and slips/trips being a particular feature.

6.2 Safety Benchmarks 6.2.1 Our performance measurement against the Construction Industry Safety Benchmark has improved to 72%. 6.2.2 We were subjected to a further unscheduled HSE site inspection in the North Wales area on this occasion. The HSE Inspector left the site fully satisfied with all safety processes. 6.2.3 The first major contractor/Trust joint safety forum will have taken place between Trustee Meeting paper circulation and Meeting day. An outline of any particular learnings from the forum can be given verbally if necessary. 6.2.4 As part of our performance monitoring processes, we record Leading and Lagging Health and Safety KPI’s. We use this process as a key metric to monitor the overall performance of the H&S management system. Leading KPI’s are made up of positive inputs by employees to improving H&S performance such as completed safety actions, safety audits and safe behaviour discussions. Lagging indicators are the negative outcomes of the H&S system such as injuries to employees or public and overdue safety actions. The following chart shows the resultant movement of the KPI’s over 2011/12.

6.2.5 Managers have direct control over the Leading Indicator inputs but not on the Lagging Indicator outcomes. The objective is to continuously increase the inputs which drive safety improvements resulting in movement in the vertical direction. The reward is improved outcomes driving the chart to the right. The positive trend established last year has continued into 2012/13. Increased positive safety actions have resulted in reduced incidents driving the chart towards the upper right corner. 6.3 Safe Behaviour

6.3.1 An update of the number and subject matter of safe behaviour conversations is given below and we remain satisfied that our safe behavior programme is being well supported by frequent and regular safety discussions:

6.4 Lost Time Incidents during Period 6.4.1 The following Lost Time Injuries have been reported since the last Report.

22/8/2012 Lost Time Injury – A Manchester & Pennine operative was on a call-out to turn off a pump and while returning home was involved in a RTA. The driver’s side wing mirror was struck which caused him to react by steering away from the possible impact. The vehicle hit the kerb bursting the tyre and subsequently hit a post causing it to come to rest on its passenger side door. The driver suffered bruising injuries significant enough to require time off work to recover. The employee is a diabetic and suffered hypoglycaemia in the immediate aftermath of the incident. The employee does not think this was contributory but our occupational health specialists are involved in helping the employee manage the condition.

6.5 Progress against targets 2012/13 (Trust Employees) - 10% reduction in lost time injuries to CRT employees (start point 23, 2012) Progress:- 19 for 12 months to end of August 2012 - 17 % Decrease - 10% reduction in Manual Handling injuries (start point 19, 2012) Progress:- 16 for 12 months to end of August 2012 - 16% Decrease - 10% reduction in Slip/Trip/Fall injuries (start point 29, 2012) Progress:- 21 for 12 months to end of August 2012 - 27% Decrease - 300 worksite safety audits by management team members Progress to the end of August 2012 - 82 Site Safety Audits & 1146 Safe Behaviour Conversations. We are behind plan currently on Manager Site Safety Audits mainly as a result of Launch events and Annualised Hours Project preparation. A recovery plan is in place to achieve plan within the next 3 months. 7.0 OCCUPATIONAL HEALTH 7.1 No case of occupational illness has been reported in the period. HSE have written to the Trust following their investigation of a case reported at the beginning of the year. They have asked us to review the vibration values on equipment supplied by our hire company against actual test data we hold and to ensure supervisors and other managers put in place working practices which minimise exposure to vibration in addition to our current practice of not allowing exposure to exceed half the legal limit. HSE are not proposing any further action.

V P Moran Operations Director

CRT 32

APPENDIX 2 PROPERTY FUND REPORT

THE C&RT INVESTMENT PROPERTY FACTSHEET - JULY 2012

Overview of total commercial assets £613m: Investment Property Profile:-  Inv Property is 71% of the total & excludes Boating  Fund Size £433m  Boating business includes Marinas & boat yards but  No’ of Properties 679 excludes boat Licences and on-line moorings  Average Property Size £640,000  BWML stated at fair value of underlying assets  Top 100 value £344m (80%)  JV’s Stated at Realisable Value of JV net assets  Average value in top 100 £3.4m  No Gearing (but c£170m collateralised Pension fund deficit and POLP loan)  90% of Rent is Experian Grade A - low risk  Weighted average lease length 98 years  Rents £31m gross, £25m net

Key Points on Inv Property portfolio £433m:-

 Well Diversified by sector & location  High Yielding (6.2% net 8% total return (IPD Voids 5% of ERV or £1.4m p.a. (excl Growth) 4.3% total return)  Low Vacancy rate - 5% versus IPD at 10.7%

 No Gearing (but c £170m collateralised PFP) Strong Covenants   Long unexpired average lease term  Inv Property portfolio July 2012 £433m

Fund Performance

The chart above shows annualised total returns The growth portfolio at 14% of investment on the BW portfolio at 31st March 2012 compared property is largely held for capital gain to IPD all property index. The one year figure is achieved through planning prior to sale to JV’s buoyed by the Wood Wharf lease uplift. or third parties. The other sectors are held primarily for income

THE C&RT INVESTMENT PROPERTY FACTSHEET - JULY 2012

[CONFIDENTIAL INFORMAT ION REDACTED] CRT 32

APPENDIX 3

MEMORANDUM OF UNDERSTANDING

between

Canal & River Trust (CRT) and The Inland Waterways Association (IWA)

1. BASIS

This memorandum of understanding (MoU) between Canal & River Trust (CRT) and The Inland Waterways Association (IWA) has been drawn up to:

 Recognise the mutual charitable interests of the two organisations;  Create a basis for mutual collaboration.  Establish areas for co-operation as waterway charities;  Outline specific commitments and responsibilities to avoid unnecessary waste of charitable resources;

2. DEFINITIONS

CRT means Canal & River Trust.

CRT is a company limited by guarantee. Registered in England No. 07807276. Registered Charity No. 1146792. Registered office is at: First Floor North, Station House, 500 Elder Gate, Milton Keynes MK9 1BB.

IWA means The Inland Waterways Association.

IWA is a company limited by guarantee. Registered in England No. 612245. Registered Charity No. 212342. Registered office is at: Island House, Moor Road, Chesham, HP5 1WA.

MOU means this Memorandum of Understanding between CRT and IWA.

3. BACKGROUND

Canal & River Trust has been established to manage the waterways previously under the stewardship of British Waterways. The transfer of these waterways out of the public sector into a Trust creates both uncertainty and opportunity within the wider waterway community. IWA is a leading charity within the inland waterway community and wishes to work with CRT to ensure that its custodianship of its waterways is successful and to assist and facilitate the development of good working relations with other waterways organisations. CRT wishes to work in an open and collaborative partnership with IWA and wishes to give a strong signal of its intent, where there is mutual benefit, to engage more closely with all parties within the wider waterways community in furtherance of those mutual benefits. IWA and CRT share many common objectives and wish to work together to maximise their collective output for mutual benefit.

4. DECLARATION OF A COMMON OBJECTIVE

CRT and IWA declare their common objective is to help secure the best possible future for the inland waterways of England and Wales.

5. WORKING TOGETHER

CRT and IWA:

5.1 Wish to work in a spirit of partnership and co-operation for the benefit of the inland waterways and base that co-operation on open communications and mutual respect. 5.2 Agree to keep each other informed about public announcements that might impact on the basis of this Memorandum set out at 1 above

6. COLLABORATION PROJECTS

CRT and IWA commit themselves to working together on the following initial joint initiatives:

6.1 Develop ways for local organisations and community groups with an interest in the inland waterways corridor in their area to work in cooperation with both IWA and CRT for mutual benefit.

6.2 Facilitating, planning and organising work parties for the practical benefit of the waterway environment.

6.3 Consider supporting or organising boat gatherings and other activities to coincide with local fundraising and awareness events arranged by either party. Such boating events or other activities would be intended to create interest and colour to help bring people to the events.

6.4 Explore the possibilities of jointly funding work to raise awareness of the waterways and specific issues, particularly amongst opinion formers such as MPs and local Government.

6.5 Consider opportunities to work in partnership to further the objectives set out above.

6.6 Convene a meeting of key personnel in our respective organisations at least once a year to review progress in the objective areas to ensure mutual benefit is being gained via agreed actions and priorities.

7. General Provisions

7.1 Each party retains the option to progress sole initiatives without the agreement of the other party.

7.2 This MOU does not constitute or infer any contract or binding agreement on or between CRT and IWA or any of their successors.

7.3 The effective date for this Memorandum of Understanding between CRT and IWA shall be the date of the later signature below.

7.4 This MOU shall remain in effect until terminated in writing by either party and may only be modified upon the written agreement by both parties.

7.5 If any part of this MOU is frustrated, the parties agree to endeavour to develop new provisions that will achieve the common objective set out in 4 above.

Signed for and on behalf of Signed for and on behalf of Canal & River Trust (CRT) The Inland Waterways Association (IWA)

Robin Evans Chief Executive Clive Henderson, National Chairman

Date: Date:

Information Report

CRT33

MEMORANDUM TO THE BOARD

FINANCE REPORT – SEPTEMBER 2012

Report by the Finance Director

1.0 PURPOSE

1.1 The report provides an explanation of:

* the progress on the Completion Accounts as at 30th June * the cash position * income and expenditure reports * operational planning timetable, and * accounting matters for consideration by the Audit Committee, and * present a first draft of an in-year KPIs report.

2.0 RECOMMENDATION

2.1 Trustees are recommended to note and comment on the information in this report.

3.0 TRANSITION TO CRT

3.1 The Finance team is now fully engaged on preparing the Completion Accounts as at 30th June 2012. This exercise is similar to a year end set of accounts and audit. The Completion Accounts are being prepared for three purposes:

(a) to prepare the opening balance sheet for CRT under the new charity accounting policies and standards,

(b) to prepare and audit the results of BWB for the three months to 30th June and to specifically deal with the effects of the transfer of the England and Wales undertaking out of that entity, and

(c) to prepare and audit the Completion Statement in accordance with the Memorandum of Understanding (“MOU”) agreed by the Disaggregation Committee in 2011 for the purpose of determining the balancing payment due to Scottish Canals (BWB).

3.2 With regard to (a), the E&W assets and liabilities are accounted for, by CRT, as an “acquisition” which requires all the assets and liabilities to be “fair valued” as at the date of acquisition by the Trust. This is a detailed process in which we reassess all the operational assets (of which there are many) as well as the investment assets. Whilst the outcome will not be materially different, the opening balance sheet for CRT is not exactly the same as the closing one for the E&W parts of BWB. We need an agreed opening balance sheet position for CRT so that there is a clear starting point for recording the surpluses and deficits going forward.

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3.3 For (b), under the terms of the Disaggregation Memorandum (“MOU”) CRT undertook to prepare the accounts up to the Transfer date and provide assistance to BWB (Scottish Canals) to enable them to reflect that period in the accounts of BWB for the year ending 31st March 2013. That work is being carried out by CRT and Grant Thornton, in conjunction with Audit Scotland, the newly appointed auditors to BWB post the transfer.

3.4 For (c), the Completion Statement of adjustments is close to being finalised. This determines the amount due by CRT to Scottish Canals under the terms of the MOU. The balancing amount is in the region of £11m and in line with expectations. The agreed methodology recorded in the MOU has had to be supplemented to deal with the period from April to June 2012 where Scottish Canals was self accounting. These were circumstances that were not envisaged in the MOU. There are no material matters in dispute at the time of writing.

3.5 All this work is proceeding well but represents an unusually high burden of work on all the finance staff. It is similar to doing a full audited year end but with added complications for the demerger, calculating the completion balancing amount and the fair value exercise on the opening CRT balance sheet.

3.6 The output from all this work is due to be reported to the Trust’s Audit Committee on 10th October 2012, which represents a tight deadline at the time of writing.

4. CASH POSITION

4.1 The cash position is noted in appendix A. The trading account is used for all revenue transactions and, since we target a revenue break even from year to year, the balance on the trading account should oscillate around an average balance. The daily, monthly and seasonal fluctuations can be surprisingly large and hence a working balance of at least £10-15m has been kept in the account to accommodate the movements. The trend in the average balance is shown on the graph of moving averages in appendix B.

4.2 The balance and the cash flow forecast for the Investment bank account has not changed materially since the version reported at the last meeting.

5. INCOME AND EXPENDITURE

5.1 Appendix C provides a statement of the income and expenditure account. The reporting of income and expenditure for this will be unusually complex due to the transition as at 2nd July. The information will become easier to report for 13/14 onwards. The statement in the appendix is for the 4 month period from 1st April 2012, as though no transition had occurred.

5.2 We have an established procedure of preparing a forecast for the year at two monthly intervals to coincide with each Board meeting. On this occasion the finance team have been very fully committed to the Completion Accounts work and there was no capacity to prepare the F4 forecast (normally prepared as at the end of period 4, i.e. July). The Executive have considered all the known events and believe that there is no material diversion from the F2 forecast, prepared for the July Board meeting. The next forecast will be F6 prepared as at the end of September and will be available for the November Board.

5.3 The statement in appendix C shows the actual results for the four months to July compared with the business plan. The main points to note are in the appendix. Overall the financial position is sound, in line with our plans and there are no matters to cause concern.

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6. OPERATIONAL PLANNING

6.1 The proposal for the Strategic Plans Committee appears elsewhere on the agenda. The timetable for the preparation of the Operational Plans for the three year period from 13/14 to 15/16 is as set out below. The proposed timetable follows previous years’ experience but accommodates the meetings of the SPC. The key meeting dates are:

28th Sept Board - review strategic priorities in draft

SPC October - consider the high level financial targets and refine the strategic targets

22nd November Board - review high level plan financial targets and agree priorities

SPC Dec/Jan - consider draft plans and resource allocation (2 meetings)

24th Jan Board - Review draft outline Plan

SPC February - consider responses from Board and Waterway Partnerships and refine allocation of resources

28th March Board - approve final Plan

6.2 The plans are prepared in two separate phases. The “above the line”, income generating and National Teams areas, will be available for review by the SPC in early January. The “below the line” areas, Charitable Purpose expenditure (direct waterway expenditure and museums), will be available towards the end of January.

7. ACCOUNTING MATTERS

7.1 The October 2012 and January 2013 meetings of the Audit Committee will need to consider the new accounting policies for the Trust. These will reflect the charitable status of CRT and will cover the requirements of the SORP (Statement of Recommended Practice) for charities as well as considering draft new policies for CRT’s reserves accounting.

7.2 It is also proposed to discuss technical accounting issues at the Audit Committee and the accounting and cash flow implications arising from certain transactions that give rise to material timing differences between income recognition and cash flows. The output from this work will:

* enable the financial consequences of proposed commercial transactions to be explained, * enable an assessment of the differences between accounting and cash flow break-even in forecasts and business plans and thereby inform the sustainable levels of charitable expenditure for business plans, and * determine how accounting reserves are created and utilised.

7.3 In considering these issues the Executive will supply detailed management information to the Audit Committee on financial performance and cash flows.

P M Ridal September 2012

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MEMORANDUM TO THE TRUSTEES

APPENDIX TO FINANCE REPORT – SEPTEMBER 2012

APPENDIX A – CASH BALANCES

Cash balances summary £ms

As at: 13/09/12 31/08/12 31/07/12 02/07/12 Sept August July Opening Revenue account - no 1 a/c 28.2 29.0 33.6 35.7 Investment Capital account - no 2 a/c 15.4 15.4 15.2 17.6 Overdraft, BWML and others 48.50.5 1.6 50.82.0 0.9 Total cash balances 44.1 46.0 50.8 54.2

Invested: Rate Maturity NatWest 14.1 0.80% Overnight Bank of Scotland 5.0 0.75% Overnight Barclays 5.0 0.35% Overnight Bank of Scotland 10.0 1.45% up to 3 months Santander 5.0 1.90% 14/09/2012 Barclays 5.0 0.70% up to 3 months Total 44.1

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APPENDIX B – MOVING AVERAGE CASH GRAPH

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APPENDIX C – 4 MONTHS TO JULY 2012

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C.1 The above statement is for the year to date, 4 months to 31st July 2012. Future statements will be prepared from 2nd July onwards when the transition accounting has been finalised.

C.2 There is a positive variance at the “Net Incoming Resources” level for the year to date of £3.8m which is due to:

* the favourable variance in the Olympic contribution is due to income being received a month ahead of plan and most of this will reverse in August,

* additional costs were incurred on the creation of CRT partly due to the delay and also due to the complexity of the pension funding arrangement, property valuations, marketing work, web site development, and launch, and

* the underspend on pension funding is due to accounting issues relating to the sinking fund.

C.3 The underspend on waterway expenditure of £4.3m is fairly evenly spread between General Maintenance and Repair (captioned Core Waterway) and Major Works.

C.4 The overall favourable variance at the bottom line of £8.2m contributes to there being more cash in the trading bank account than we might have expected at this point in the year.

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APPENDIX D – IN YEAR KEY PERFORMANCE INDICATORS

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INFORMATION REPORT

CONFIDENTIAL MEMORANDUM TO TRUSTEES

FUNDRAISING REPORT – SEPTEMBER 2012

Report by Marketing & Fundraising Director

1. PURPOSE

To inform Trustees of progress and issues relating to fundraising and to brief them about future developments.

2. HEADLINES

 Successful launch got our fundraising off to a good start. The Friends scheme featured more strongly than the appeals  Our work on corporate partnerships continues to be sector-leading, with excellent partnerships started and a strong pipeline of prospects in development  The ‘Friends’ concept is attractive and we have further enhancements in development  Appeals have worked well for corporate supporters, but individual response is slow. The key lies in local ownership and we are working with partnerships to boost this now and for 2013/14  The delayed start for the charity (we lost 15 of the best outdoor fundraising weeks and by the time of the Trustee meeting will have only 12 weeks experience with slightly less data) has given us little time to learn and less to adjust before the peak season is over

3. BACKGROUND

3.1 Strategy and key assumptions

The Fundraising Strategy is founded on a feasibility study conducted by THINK Consulting Solutions and on research conducted with towpath users. Key assumptions underpin the strategy:  That building a strong base of committed, individual donors will require investment over the first 3 – 4 years of the charity’s life, but will provide a sustainable income source for the future  That our target audience for individual donors is within the c10 million towpath users who experience our network, free of charge, every year  That our individual fundraising should therefore focus on our towpaths and be built around face to face fundraisers recruiting committed donors  That alongside this, we have the opportunity to engage in mutually beneficial relationships with companies who share our values and goals. This support may come in the form of money, time or gifts in kind.  That individual giving and corporate partnerships should therefore form the heart of our fundraising programme with legacy, events and major donor fundraising built in at a later stage

THINK continue to offer us advice and perspective as the strategy is implemented

3.2 Proposition development

The fundraising proposition for Friends was developed working with Open, a leading fundraising consultancy in the sector (clients include, WWF, St John Ambulance, Oxfam) and is based on the core idea of ‘making your canal better’. This proposition refers both to the improvements your donation enables us to make to the canals and to your increased enjoyment of the canals you visit thanks to the benefits and information you receive as a Friend.

The benefits element of this proposition will, we hope, be strengthened this autumn when a range of third party benefits from organisations including Hoseasons, Cool Canals and Waterways World are introduced following completion of extensive negotiations with HMRC. A similar mixture of philanthropy and enlightened self- interest underpins our corporate proposition.

Fundraising were also involved in the development of the corporate strapline ‘Keeping people, nature and history connected’ which emphasises the importance of our role maintaining these fragile connections, and also outlines the three areas of our work. Our launch appeal projects focus specifically on the connections between people and nature and are themed as ‘Bringing towpaths to life’.

4 SUMMARY OF PROGRESS

[Confidential information redacted]

5. LEADERSHIP GIVING

5.1 Corporate Partnerships

Following the successful securing of three corporate partners for launch (Google, Co- operative Bank and People’s Postcode Lottery) our work with corporate partners continues to go from strength to strength. Our targets for the year were to have two launch partners, three further strategic partners and four tactical or regional partners.

We have secured May Gurney as sponsors of our Winter Works campaign for the second year in a row and are currently in discussions with a wide range of companies and have proposals in development for Marks & Spencer, United Utilities and Ecover. Most partnerships involve a mixture of in kind support, cash and volunteer time. The success of our work in this area, particularly as a brand-new charity, is exceptional. Companies are also now able to support us by providing discounts to our Friends, enhancing our proposition for Friends at the same time as increasing their reach. At the time of writing we have received pledges of over £265,000 of support.

Ongoing advice on partner research and major proposals is provided by CSR and charity specialist consultancy c&e (clients include UNICEF, NSPCC, RNIB).

5.2 Charitable Trust Fundraising

Trust fundraising is the newest area of our portfolio with our Trust Fundraising Manager only joining the organisation post-launch. Working closely with Enterprise this post holder has already submitted our first applications and is focusing particularly on seeking match funding for Enterprise projects. This form of fundraising has a lead time of 3 – 6 months so we expect to receive our first donations from charitable trusts towards the end of 2012.

6 INDIVIDUAL GIVING

6.1 Friends

We have been recruiting for only 12 weeks to the date of the Trustee meeting and have data available for slightly less.

Recruitment of Friends is predominantly through two ‘face to face’ agencies, HOME and CMF Ltd. These agencies originally had 2012/13 ‘Friends’ targets of 1,500 and 5,500 respectively for an April start. We expected approximately 6,000 of the 7,000 target to be recruited in the period from April to September. Each agency operates on distinct waterways on sections of towpath and at honeypot sites identified by us as well as at waterside events. Given the delayed start and the problems emerging with CMF Ltd (see below), we have adjusted our target for end March 2013 to 3000 Friends. The bulk of this reduction c 3,300) is attributable to the delayed start which cost us 15 weeks of prime fundraising time.

Given the delayed start, it is impressive that HOME expect to meet or get close to their original target. It gives us confidence that the ‘Friends’ concept is correct. However, CMF Ltd, our main supplier, has not impressed us with their approach and they are struggling to retain sufficient staff numbers to meet their targets (blaming the delayed launch for this). We are working hard with them to improve their quality but main season time is short

Payment is on recruitment only. There is no retainer for either agency. We have begun to look for additional suppliers for 2013/14 but demand in this area far outstrips supply, making it difficult to secure agency capacity. We are also considering experimenting with our own face to face fundraisers. Although it is still very early days, it seems possible that we will need to slow the speed at which we will grow our individual supporter base – this will reduce both the rate of investment and the rate of growth in income. Our ideas about this will be reflected in the next Operating Plan.

We are also learning a lot about our portfolio of sites and other factors that affect recruitment. Although it is too early to be certain, it seems that our best sites are urban centres and events with visitor ‘honeypot sites only yielding good results at weekends. Weather is also very influential and we are developing ideas about using less weather-dependent sites (eg garden centres and ‘door to door’) with the agencies to deal with prolonged bad weather which seems to be increasingly frequent in British summers!

At the time of writing we had recruited c750 via the face to face agencies.

Very positively but relatively unusually, we are recruiting a small but steady number of Friends through our website. At the time of writing we had recruited c250 Friends online. This will make up for some of the short fall in the agency recruitment and is low cost as there is no agency commission to pay.

6.2 Appeal projects

We launched 50 projects under the theme of ‘Bringing towpaths to life’ to coincide with the launch of the charity. These appeals were designed to appeal to local media and local people and are being promoted through signage alongside towpaths as well as on our website and in the media. In the event, media coverage focused more on Friends and the responses to signage and online has also been slower than projected.

This is disappointing, but we have a number of actions in hand to mitigate the slow start:

Corporate partners – we have a lot of interest in these appeals particularly from small and medium sized companies and from branches of larger companies. To date we have secured actual or ‘in principle’ pledges of funding which will fully fund six appeals.

Online community fundraising with Just Giving – we have completed integration of our website with Just Giving to allow people to fundraise for each of our 50 appeals in addition to the general donation function to Canal & River Trust that was already in place. This specific appeal functionality is part of new development for Just Giving and we will be working with their marketing team to maximize its potential.

Working with Waterway Partnerships – these appeals were necessarily put together at a time when there were virtually no waterway partnerships. We are now working to get local support for as many as possible and to develop effective localized appeals for 2013/14.

Online functionality has also been enhanced recently with the ability to fundraise for, as well as donate to, projects being introduced to the site. These should all increase response, as well as generate further insight into what is most effective.

6. OTHER FUNDRAISING

Events fundraising was given an early lift by the staff cycle challenge which saw 19 staff, partners and suppliers cycle 300 miles from London to Brussels. At the time of writing this event had raised £34,000 in sponsorship as well as engaging the staff body in fundraising.

A feasibility study into the potential for challenge events on our own network has been underway since November 2011, with the greatest potential being for a mass participation aquathlon (swim/run) series in our rivers. The feasibility work is still ongoing but we hope to have a proposal by the end of October 2012. There has been significant interest in this event from sports governing bodies, other charities and corporate sponsors.

7. CONCLUSION

Fundraising for a brand new charity, where every supporter has to be recruited from scratch is undeniably challenging, particularly in this economic environment. Whilst corporate fundraising is performing ahead of expectations, individual fundraising is developing more slowly than we hoped. However, within the first few weeks we have recruited our first 1200 supporters and raised our first funds (over £360,000) for the charity. Ruth Ruderham, our Head of Fundraising recruited from Christian Aid has successfully built confidence, amongst our stakeholders, with Trust staff and in the wider third sector.

We have gained a huge amount of learning and will be able to build on this in the rest of the year and in future years. Whilst it is possible that the pace of growth originally projected for fundraising may need to be slowed there is clearly potential here for a charity that has broad appeal and can attract supporters. The key focus for the team at this stage is on gaining insight into what is and is not working and adapting the strategy as necessary to maximise our success.

Simon Salem Marketing & Fundraising Director September 2012

Information Report

MEMORANDUM TO THE BOARD

OPERATIONS/TECHNICAL REPORT – SEPTEMBER 2012

Report by Operations Director

This report is for information only and no decisions are required on this occasion.

1.0 Repair & Maintenance Delivery Update

1.1 The following graph illustrates the key areas of operational expenditure comparing the key Steady State model estimates with planned annual expenditure. As the model estimates average whole life expenditure requirements for the variety of asset types/activities annual plans may allocate more or less than the model in any particular year driven by risk based considerations. This combined with the fact that we do not yet have sufficient funding to meet the total Steady State model projections explains why variances between model and actual plan exist in the graph below. The Steady State model estimates that £104m is required annually to maintain Steady State (assuming Steady State exists) with £87m (84%) available this year.

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1.2 Expenditure Profiles – General & Major Works

1.2.1 There are two main categories of operational expenditure - General Maintenance and Major Works. The following graph shows actual expenditure against Plan and Forecast for the two areas combined:

Overall Expenditure Profile

 The variance of actual expenditure from Plan and Forecast is due to some delays in programmed general works delivery (particularly related to vegetation management where weather conditions have impacted on grass cutting and weed spraying), rescheduling of new national contracts for Operational Property/ Mechanical and Electrical maintenance and payroll savings from delayed recruitment in some areas. In the Major Works area, some rescheduling of projects has occurred. Actions are planned to recover to Plan by year end.

1.2.2 General Works Expenditure Profile – the following graph illustrates the General Works proportion of overall operations expenditure comparing Plan, Forecast and Actual:

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 Cyclical works continued on Planned Preventative Maintenance to 7 key assets with satisfactory progress across all waterways together with vegetation management in testing climate conditions due to a much wetter than average summer. Some minor delays to vegetation schedules have occurred with the Framework Contractor tasked to recover where possible.

 During the period, progress continued on the repair of the Highest Priority Defects – mainly critical visitor safety and customer service items such as bank protection, leak stopping, safety fencing and Minimum Safety Standards compliance. Our target for the year is the repair of 6,417 High Priority Defects with 1,582 (25%) completed so far.

 In addition to planned defect repairs, the nature of the network constantly throws up a number of arising, usually, small scale defects which have to take priority over planned work to manage risk and can impact on the delivery of planned works. The variety of tasks are significant including lock gate repairs following impact damage, lock paddle failures, leak management, emergency tree works, pollution, weed blooms, vandalism, etc. As an illustration, the following more significant arising defects occurred during the period:

Macclesfield Canal – Marple Retaining Wall Failure

Llangollen Canal – Hampton Bank minor breach due to wash out under short piles

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1.2.3 Major Works Expenditure Profile – the following graph illustrates the Major Works proportion of operations expenditure comparing Plan, Forecast and Actual:

 The Major Works area manages the more complex and higher risk projects delivered by Framework Contractors (May Gurney/Civil & Mechanical & Electrical Engineering, Land & Water/Dredging) covering activities such as Reservoir works, Embankment & Culvert repairs, Bridge works, Dredging, Tunnel repairs, Water Management, etc. 72 projects are planned for delivery during the year with a budget of £17.5m. Over 60% of the programme has either been delivered or is at an advanced stage, with the remaining programme for the year on track.

 The difference between actual expenditure and original Plan (Red line) is due to the completion of a number of projects in the later part of 2011/12 rather than the early months of 2012/13 which required the Plan profile to be adjusted. Despite the changes the overall shape of the expenditure profile is more appropriate for efficiency than previous situations where considerable expenditure took place in the last 2 or 3 months of the financial year.

 The following photographs illustrate the nature and scale of typical Major Works project

Weston Turville Reservoir - Cost £735k

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Cooper Bridge Weir Cofferdam – Cost £2.2m

2.0 Monitoring Operational Performance

2.1 A range of Performance Indicators have been developed to monitor performance across the wide range of activities within Waterways and the Major Works areas. A summary of the performance indicators is shown on the following page with traffic light indication of current performance.

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3.0 Technical/Operations contribution to Trust development

3.1 The three key areas where the Technical/Operations function is contributing to the development of the Trust are Volunteering, Waterway Partnerships and Advisory Groups.

3.1.1 Volunteering – all Waterways now have volunteer management resource and are beginning to develop stronger links with volunteer groups and individuals. A particularly significant project underway in the South East is the involvement of the IWA Waterway Recovery Group (WRG) working alongside our Civil Engineering Contractors and South East staff to repair a number of bridges on the Oxford canal. This is the first example of such joint working and of WRG volunteers working on an operational as opposed to a derelict canal/restoration project. The photographs below showing volunteer works to access steps in Birmingham are a prime example of the excellent work being delivered across the network by various volunteer groups:

Volunteer Works Access to Long Moll Bridge Before and After Works

3.1.2 Waterway Partnerships – all the Partnerships are bedding in well with good relationships being developed. Their focus over the next few months is to develop local strategic visions to feed into our business planning processes.

3.1.3 Advisory Groups – three key Advisory Groups have started to operate in the Technical/Operations area covering Heritage, Environment and Navigation. It is early days in the development of these groups but they have all attracted excellent quality members and we are very confident that their advice will be beneficial in the development of future policies and actions. As an example, the Navigation Advisory Group have been engaged to give advice on the development of a new 10 year Dredging Strategy. The input of experienced boaters will be very important in demonstrating that a comprehensive and customer focussed approach has been applied to such an important area of our work from the boaters perspective.

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4.0 Other Notable Activities

4.1 Apprentices – 22 operational apprentices have been appointed to be trained in bricklaying and carpentry skills. Over 600 applications were received for the 2 vacancies created in each of our 11 Waterways. The apprentices commenced at the beginning of September and their training will be a combination of waterway based practical experience under the mentorship of experienced operatives together with periods of Block Release at Leeds College. These appointments have been received very positively as an indication of longer term investment in waterway based skills.

4.2 May Gurney, Civil Engineering Framework Contractor – In early September, May Gurney reported to the City that a small number of their contracts had encountered problems which were impacting on their profitability. The company took action to address issues and their Chief Executive was replaced. May Gurney directors were swift to assure us that there would be no impact on their delivery of our contracts and this appears to be the case.

VINCE MORAN Operations Director

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