Payments for Ecosystem Services- Canal & River Trust Pilot Study
Final Report
December 2013
Defra Area 5F Ergon House c/o Nobel House 17 Smith Square London, SW1P 3JR
JBA Project Manager Rachel Brisley JBA Consulting Bank Quay House Sankey Street Warrington WA1 1NN Revision History
Revision Ref / Date Issued Amendments Issued to Draft v1/ 28/06/2013 SM/RB Draft v2 05/07/2013 Minor amendments SM/ RB Draft v3 15/07/2013 Minor amendments SM/RB/SJ/PB/JHW Minor amendments and Draft v4 25/07/2013 Project Board members executive summary Amendments from Project Final Report 20/09/13 Project Board members Board comments Revised Final Report Amended following Defra’s Defra and Project Board 11/10/13 comments Revised Final Report Amended following Defra’s Defra and Project Board 03/12/13 comments Revised Final Report Amended following final Defra and Project Board 17/10/13 Project Board meeting Contract This report describes work commissioned by Defra in September 2012. Defra’s representative for the contract was Chris Holton. The work was undertaken by Steve Maslen, Rachel Brisley, Katherine Pawson, Steve Rose, David Revill, and Jessie Kennedy of JBA Consulting; Jonathan Hart-Woods and Phillippa Baron of the Canal & River Trust and Sarah Jackson of Penny Anderson Associates.
Prepared by ...... Rachel Brisley BA MCD MBA Technical Director
Katherine Pawson BA MSc
Assistant Landscape Architect
Reviewed by ...... Steve Maslen BSc MPhil CMLI BA Director Purpose This document has been prepared as a Final Report for the Canal & River Trust PES Pilot Study Project Board. JBA Consulting accepts no responsibility or liability for any use that is made of this document other than by Defra for the purposes for which it was originally commissioned and prepared. 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study i
JBA Consulting has no liability regarding the use of this report except to Defra.
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Acknowledgements We are grateful to Chris Holton from Defra who has provided useful direction and support throughout and to members of the Project Board (Defra, the Environment Agency, Natural England, Leeds City Region Local Enterprise Partnership and the Aire Rivers Trust) whose advice and guidance has influenced the quality of the final output. Copyright © Jeremy Benn Associates Limited 2013 Carbon Footprint A printed copy of the main text in this document will result in a carbon footprint of 305g if 100% post-consumer recycled paper is used and 388g if primary-source paper is used. These figures assume the report is printed in black and white on A4 paper and in duplex. JBA is aiming to reduce its per capita carbon emissions.
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Executive Summary Ecosystem services are the benefits that we derive from the natural environment. These include products, essential processes and non-material benefits. Maintaining, enhancing and restoring ecosystem services contribute to sustainable economic growth. Payment for ecosystem services – PES – is an approach to connecting value to the provision of ecosystem services and linking actions to increase the level of individual services to payments from those that directly benefit from their provision. JBA Consulting, working with the Canal & River Trust and Penny Anderson Associates, was commissioned by Defra, as part of a suite of Payments for Ecosystem Services pilot studies, to investigate the potential for development of PES mechanisms in relation to the ecosystem services provided by the Canal & River Trust's inland waterways. The PES approach offers opportunities for the Trust to develop new funding streams to support the provision of ecosystem services. This pilot study builds on previous work undertaken for Defra by Jacobs in 2009 which focused on identifying and valuing the ecosystem services of inland waterways within England and Wales. Inland waterways provide a wide range of ecosystem services, including recreation, water conveyance, flood protection, water supply, waste disposal, energy generation, carbon storage, heritage preservation and nature conservation. The Canal & River Trust was established as a charitable trust in 2012, replacing the public corporation British Waterways. The Canal & River Trust is responsible for the management of 2,000 miles of inland waterways in England and Wales. Its charitable objects, which set out the overall aims and purposes of the Canal & River Trust and form the scope of its activities, include the object: “To further for the public benefit the conservation, protection and improvement of the natural environment and landscape of inland waterways”. The overall aim of the research is to evaluate the feasibility of delivering a practical PES scheme focused on improvements to key ecosystem services provided by inland waterways. The research included a literature review, a pilot study of the Leeds-Liverpool Canal using a case study approach to identify potential PES mechanisms and the development of recommendations to take these mechanisms forward. The area selected for the pilot study is a section of the canal network extending from the River Aire in the centre of Leeds, along the Leeds-Liverpool Canal to rural Silsden. The pilot study area was carefully selected as a sample of canal which is scalable to the wider inland waterways network and considered to be representative of the characteristics of the national network of inland waterways. The length of canal included in the pilot study includes designated and non designated sites of nature conservation value, important areas of built heritage, and identified regeneration sites adjacent to the canal. The Leeds-Liverpool Canal provides several ecosystem services; however, identifying those provided by the canal which have the potential to be valued and then paid for by the beneficiary through an established mechanism is more complex. There are likely to be some challenges for the Canal & River Trust in taking forward the suggested PES mechanisms due to their varied obligations and potential conflicts which arise from managing these. For example, a focus on recreation and amenity could lead to negative impacts in terms of water quality, biodiversity and water resources; a balanced approach minimising negative outcomes needs to be adopted. A number of potential PES mechanisms are identified; three are considered to be of most relevance for practical application by the Trust: - Use of section 106 agreements and the Community Infrastructure Levy to obtain funding through new development in close proximity or adjacent to the canal - Use of environmental stewardship funding by third party landowners to improve land management practices and thus reduce impact on the canal - Catchment management type funding mechanisms to improve water quality through regulation of inputs into the canal. Further research will be required by the Canal & River Trust to develop these mechanisms, which should provide a good opportunity to maximise income sources for their activities that support and maintain the ecosystem services provided by the UK’s inland waterways.
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Contents
Executive Summary ...... iv 1 Introduction ...... 1 1.1 Overview ...... 1 1.2 Study direction ...... 2 1.3 Research objectives and approach ...... 2 1.4 Purpose, target audience and content of the report ...... 3 2 Project context ...... 4 2.1 Valuing Ecosystem Services of Inland Waterways ...... 4 2.2 PES mechanisms ...... 5 2.3 Canal & River Trust ...... 6 3 Pilot study approach and summary of findings ...... 12 3.1 Approach to the study ...... 12 3.2 Pilot study findings ...... 14 3.3 Summary of findings ...... 27 4 Potential PES Mechanisms ...... 28 4.1 Current Trust Activity ...... 28 4.2 Planning Instruments ...... 28 4.3 Environmental Stewardship ...... 31 4.4 Water quality and water resource related funding ...... 32 4.5 Other Mechanisms ...... 32 4.6 Summary ...... 33 5 Conclusions ...... 34 5.1 Study conclusions ...... 34 5.2 Relevant lessons learned ...... 35 5.3 Recommendations ...... 36 Appendices...... I A Case Study Factsheet Template ...... I B Completed Case Study Factsheets ...... II Bibliography ...... XXXI
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List of Figures Figure 1: Canal & River Trust Key Environmental Issues ...... 9 Figure 2: The initial pilot study area ...... 10 Figure 3: Trust Ownership Boundary- Knostrop Cut and surrounding area ...... 24 Figure 4: Poaching on offside canal bank near Calverley ...... 21 Figure 5: The Leeds-Liverpool Canal at Pollard Lane ...... 19 Figure 6: Apperley Bridge ...... 15 Figure 7: Beneficiary analysis of Apperley Bridge case study ...... 17
List of Tables Table 1: Ecosystem services of inland waterways and their associated values ...... 4 Table 2: PES Mechanisms ...... 6 Table 3: Canal & River Trust Revenue 2011-2013 ...... 9 Table 4: Long List of Case Study Locations and Associated Trust Activities ...... 13 Table 5: Summary of case study findings ...... 27
Abbreviations BW ...... British Waterways CES ...... Conservation and Enhancement Scheme CFMP ...... Catchment Flood Management Plan CIL ...... Community Infrastructure Levy Defra ...... Department for Environment, Food and Rural Affairs EA ...... Environment Agency ELS ...... Entry Level Stewardship ES ...... Ecosystem services ESA ...... Ecosystem services approach EU ...... European Union EWGS ...... English Woodland Grant Scheme HLS ...... Higher Level Stewardship JBA ...... JBA Consulting UK LEP ...... Local Enterprise Partnership LPA ...... Local Planning Authority MEA ...... Millennium Ecosystem Assessment NEWP ...... Natural Environment White Paper PAA ...... Penny Anderson Associates PES ...... Payment for Ecosystem Services s.106 ...... Section 106 agreement (planning obligations) SPD ...... Supplementary Planning Document 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study
SSSI ...... Site of Special Scientific Interest TEEB ...... The Economics of Ecosystems and Biodiversity The Trust ...... Canal & River Trust UK NEA ...... United Kingdom National Ecosystem Assessment WFD ...... Water Framework Directive WTP ...... Willingness to pay Definitions Beneficiary: Any party who benefits and gains value from an ecosystem service. Buyers: Beneficiaries of ecosystem services who pay for the services to be safeguarded or improved. This includes primary buyers (parties who directly benefit and pay for the provision of a service), secondary buyers (parties who pay for the provision of services on behalf of specific sections of the public) or tertiary buyers (parties who pay for the provision of services on behalf of the general public, typically government). Community Infrastructure Levy: A levy which Local Planning Authorities in England can charge on most new developments in their area in order to fund infrastructure projects. Ecosystem Services: The benefits derived from the natural environment, including products, essential processes and non-material benefits and typically classified as either provisioning, regulating, supporting or cultural services. Environmental stewardship: One of the most widely accepted PES-like schemes, which is provided to land managers or owners to help improve environmental outcomes and land management practices. Intermediaries: Any party linking buyers and sellers in a PES scheme. Knowledge providers: Experts who can provide knowledge during the development of a PES scheme. Payments for Ecosystem Services: An approach to establishing value and payment for ecosystem services, in which the beneficiaries of the service provide payment to the providers or stewards. Section 106 Agreements: Mechanisms for securing planning matters arising from a development proposal, used to more closely align the development with the environmental and sustainable development objectives within planning policy. Sellers : Land managers or owners who are providing ecosystem services. Stakeholders: Any party who has an interest, or is affected by, the intervention, mechanism or service.
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1 Introduction
1.1 Overview JBA Consulting (JBA), working with the Canal & River Trust (the Trust) and Penny Anderson Associates (PAA), was commissioned by Defra, as part of a suite of Payments for Ecosystem Services (PES) pilot studies, to investigate the potential for development of PES mechanisms in relation to Ecosystem Services (ES) provided by the Trust's inland waterways.
1.1.1 Ecosystem Services ES are the benefits that we derive from the natural environment. These include products, essential processes and non-material benefits. Maintaining, enhancing and restoring ES is necessary for sustainable economic growth and social well being. ES are typically classified as provisioning, regulating, supporting or cultural services. • Provisioning services supply food, fresh water, wood, fibre and fuel • Regulating services regulate climate, flood, disease and purify water • Supporting services provide essential underlying functions, such as nutrient cycling and soil formation, and are not used directly by people • Cultural services provide opportunities for recreation, tourism and education, as well as aesthetic and spiritual values High profile studies including the Millennium Ecosystem Assessment (MEA) in 2005, The Economics of Ecosystems and Biodiversity in 2010 (TEEB) and the UK National Ecosystem Assessment (UKNEA) in 2011 provide a comprehensive evaluation of the range and current state of ES both internationally and in the UK. Many services are significantly degraded or are being used unsustainably. The MEA predicted that around 60% of ES globally are degraded, whilst 70% of regulating and cultural services are in decline. The UKNEA identified the following points relevant to this pilot study: • ES and the benefits they provide have changed dramatically in type, scale and value over the last half century • Many ecosystems are in long term decline • Conventional decision-making undervalues the natural environment • Pressures on ES are likely to increase with projected continued population growth and the impacts of future climate change • Actions taken now will have impacts far into the future
1.1.2 Payment for Ecosystem Services PES is an approach to connecting value to the provision of ES. It links actions to increase the level of individual services to payments made by those that directly benefit from their provision. The PES approach offers significant opportunities to develop new funding streams to support ES provision, providing financial incentives to suppliers to facilitate improvements in desired services. To qualify as a PES, the form of payment for these services must be voluntary and cannot involve forced payments through regulatory controls. Many existing examples of practical PES schemes already exist, promoted through government-financed initiatives and also through private sector involvement. These include payments by water companies for improvements to water quality through sensitive catchment management, carbon sequestration initiatives that provide payments for forest planting or avoided deforestation, and agri-environment schemes that provide payments for protecting and improving agricultural biodiversity. Such initiatives directly support efforts to deliver more sustainable development, forging greater understanding and cooperation between suppliers and consumers, and integrating environmental improvements and regulation with economic and social welfare. Historically, few ES have been valued but more recently, extensive work has been undertaken and remains ongoing to gain a better understanding of the monetary value of ES and the means by which value can be placed on individual services.
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1.1.3 Defra PES Pilot Research Programme Defra is currently supporting a range of research activities focused on strengthening the evidence base for PES and initiatives aimed at developing realistic, feasible and practical approaches to delivering operational PES schemes. To date, Defra has funded two rounds of PES pilot research schemes and subject to review of these schemes, plans to continue the PES pilot research fund in late 2013-14 (Defra, 2013). Several studies are currently underway, investigating a range of ES, suppliers and beneficiaries, and examining potential payment mechanisms. This research will provide important information on the opportunities, risks and benefits that can be used to inform the future delivery of other PES schemes in England and elsewhere. This research contributes to the delivery of a specific commitment in the Natural Environment White Paper (NEWP) supporting the research and development of practical PES schemes. Defra has also recently published Payments for Ecosystem Services: Best Practice Guide (Smith et al, 2013), which has acted as a reference document for the final phases of this pilot study. This Canal & River Trust study is part of the second round of funded PES pilots. Defra is particularly interested in this pilot study due to its national network and potential wide reach and impact. The study investigates potential PES mechanisms for inland waterways by identifying the ES that the canal provides and the role of the Trust in supporting, maintaining and enhancing these services.
1.2 Study direction A Project Board was established to help direct and support the work undertaken on this pilot study. This group was formed of representatives across a range of relevant organisations: Defra (Chris Holton), Natural England (Ruth Waters), the Environment Agency (Mark Everard), Leeds City Region (Jon Follows), Aire Rivers Trust (Jerry Whaley), and Canal & River Trust (Jane Thomson). The Project Board provided valuable and informed guidance and support throughout the pilot study.
1.3 Research objectives and approach
1.3.1 Research objectives The overall aim of the research is to evaluate the feasibility of delivering a practical PES scheme focused on improvements to key ES. Given the extensive geographic scale of the waterways, the pilot study offers an opportunity to evaluate the feasibility of delivering large scale ES improvements as well as examining communication issues regarding payment of such services. Key research objectives for the pilot study were as follows: • Improve understanding of the current value and scope of the habitat, water quality, water resources and recreation ES being provided in the pilot area • Examine how a PES scheme could deliver improvements to these ES in the future • Identify and evaluate current and future beneficiaries and demand for these ES • Evaluate existing and new potential payment mechanisms • Evaluate communication methods to raise awareness amongst beneficiaries and other stakeholders of the benefits being delivered and opportunities for service improvements • Examine the feasibility of establishing a PES scheme across the wider canal and river network, including issues surrounding the communication of benefits and the geographic separation of services and beneficiaries. A key element of the pilot project will also test whether charitable status for public services assists in the establishment and sustainability of the PES approach.
1.3.2 Research approach The research approach has consisted of three key stages: 1) Desk based review of ES/PES literature including other research, best practice examples and guidance and information from 1st Round Pilot Studies (September - December 2012) 2) Pilot study along the Leeds-Liverpool Canal consisting of the following (January - May 2013) • Development of approach 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study 2
• Identification of case studies • Individual case study investigation • Identification of potential PES mechanisms • Stakeholder consultation 3) Development of recommendations for future development of PES on inland waterways (June - July 2013). The case studies focused on addressing the following key questions: • What ES does the Leeds-Liverpool Canal provide, supported by the activities of the Trust? • How much do these activities cost the Trust? • Who is currently paying for them? • Who is benefiting from the ES and the Trust’s role in supporting them? • Are these beneficiaries willing to pay for the ES provided by the canal? • What mechanisms could be used to obtain payment? • How are the proposed PES mechanisms best communicated to stakeholders?
1.4 Purpose, target audience and content of the report The purpose of this report is to provide a summary of the findings from the study and set out recommendations for the future development of PES mechanisms related to inland waterways in England. The target audience for the report is the pilot study's Project Board. In addition, it is likely that wider stakeholders such as recreational users of the canal (boaters, anglers, cyclists and walkers) and the two local authorities within the Pilot Study area (Leeds City Council and Bradford MDC) will be interested in the findings of the report. The report is structured as follows: • Introduction (this section) • Project Context (Section 2) • Pilot Study approach & summary of findings ( Section 3) • Key issues from the pilot study (Section 4) • Conclusions and recommendations (Section 5).
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2 Project context This section provides an overview of ES relating to inland waterways and their valuation. It also provides detail on the role and responsibilities and ongoing activities of the Trust. This section has been informed by findings from the Phase 1 desktop review.
2.1 Valuing Ecosystem Services of Inland Waterways This pilot study builds on previous work undertaken for Defra by Jacobs (2009), which focused on identifying and valuing the ES of inland waterways within England and Wales. The Jacobs study took an Ecosystem Services Approach (ESA) to examine the benefits provided by inland waterways. It identified a range of ES and provided monetary estimates (using the benefits transfer approach) to value the benefits provided by these services. According to the report, inland waterways provide a wide range of ES, including recreation, land drainage, flood protection, water supply, waste disposal, energy generation, carbon storage, heritage preservation and nature conservation. These services have been valued at over £500 million per year (for England and Wales). The following table presents ES of relevance to the PES pilot study which were included in the Jacobs study together with their estimated value. Estimated value has been calculated using various methods, including Willingness to Pay (WTP) and use values. Table 1: Ecosystem services of inland waterways and their associated values
Ecosystem Service Value
Water is supplied at a significantly lower cost than potable water due to the lower treatment cost. The report estimated a Water abstraction Consumer Surplus of 33% (the price customers are charged against the price customers are prepared to pay, equal to approximately £80 per MI). services services Provisioning
Renewable energy opportunities No detail The value of these benefits depends on the value of the assets deriving a benefit. Values are likely to be significant, Drainage and conveyance of water but valuation is complicated and has not been well investigated. Benefits range from £131 to £2,564 per hectare per year for flood protection from wetlands. The extent of benefits depends on a range of factors, including current water quality, the location of human populations and the species and habitats present. A valuation Water cycling and pollution removal study related to loss of value from the eutrophication of and dispersal waterways resulted in estimates such as a 10% loss in property value for properties adjacent to eutrophic waters and a loss of £17 per visitor per day for loss of recreational value due to waterbody closure. Regulating services Values based on 2000 study of the River Tame using Willingness to Pay (WTP). The benefits ranged between Water quality improvements £7.60 and £18.12 (Contingent Valuation) and £8.64 to £31.50 (Contingent Ranking) per household per year (these values are for improvements to water quality from a very low status). Studies looked at direct expenditure on a range of recreation activities. Estimates ranged from £2.91 (jogging) to £9.79 (leisure/heritage/museums) per person per trip. Angling estimates for anglers WTP for both coarse and game angling: Recreation £15.70 (coarse – canal) to £30.30 (game – river) taken from 2001 study. Bird watching - Valuation based on high profile species (rather than general wildlife). One study of relevance considered osprey watching, estimating visitor expenditure Cultural services Cultural services per person per day to be £7.17 (2006 value).
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Ecosystem Service Value Visual amenity No detail WTP study estimated mean value as £22.48 per household per one-off payment (2003 prices) to improve and restore river biodiversity from 14% to 70%. A second study focusing on the Manchester Ship Canal estimated mean WTP as £6.00 Habitat restoration per household per year for improvements in ecological condition of the canal (only considers the value of improvements and not the value of the current ecological benefits- care needed when applying value and should only be applied to similar canal types i.e. large commercial canal). The research indicates that there are valuation gaps relating to biodiversity, water quality and drainage. The pilot study is concerned more with investigating potential PES mechanisms rather than establishing valuation approaches and therefore does not address these gaps directly. The above clearly suggests that the Canal & River Trust could benefit from further work valuing its drainage and abstraction activities. This pilot study has used the findings from the research undertaken by Jacobs as a platform and undertaken additional primary research to identify the potential PES mechanisms that could be utilised to secure additional resourcing for the Trust’s activities in maintaining and enhancing these ES.
2.2 PES mechanisms There are several key principles which underpin any PES scheme. These are outlined in Payments for Ecosystem Services Best Practice Guide (Smith et al, 2013) and are summarised below: • Beneficiary pays : Payments are made by the beneficiaries of the ES (or proxy buyers) • Direct payment : Payments are made directly to the ES providers or stewards • Voluntary : Both beneficiaries and providers enter into PES agreements voluntarily • Additionality : Payments are made for ES which are additional to what land managers would be expected to undertake and must go beyond regulatory compliance • Conditionality : Payments for ES are dependent on their delivery, or on management practices which have been agreed would lead to their delivery • Permanence : ES provision should be continued through permanent management interventions • No leakage : PES schemes should ensure that securing an ES in one location does not lead to the loss of ES elsewhere However, as noted in the guide, although these principles should inform any scheme, there are few PES schemes which are theoretically perfect and fulfil all of the above principles. Many successful schemes are considered PES-like. PES schemes can be classified into three types. These include public payment schemes, private payment schemes and public-private payment schemes (Smith et al, 2013). • Public payment schemes : government pays land and resource managers to enhance ES on their behalf • Private payment schemes : self-organised private deals in which beneficiaries of ES contract directly to providers • Public-private payment schemes : schemes that include both government and private funds to pay land managers for ES Within these schemes types, there are various PES mechanisms. The following table presents an overview of some of these.
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Table 2: PES Mechanisms
Funding Stream Payment Mechanism Description Examples
Public payment: European government EU Regional European Union (EU) Funding provided for projects that demonstrate a positive Development Fund, funding schemes impact in more than one EU country. INTERREG Public payment: Central government Entry Level Environmental Agricultural landowners and managers across England Stewardship, Higher Stewardship are paid for management practices that support ES. Level Stewardship Woodland Improvement Grant, Scheme that aims to sustain and increase public benefits English Woodland Grant Woodland through maintaining existing woodlands and investing in Scheme Management Grant, woodland creation. Woodland Creation Grant Heritage Lottery Fund, Lottery funding supports projects which help improve the Lottery funding People's Postcode natural environment lottery Catchment Restoration Funding offered to support changes to catchments that Fund for England, Catchment management would result in improvements to water quality and Catchment Sensitive funding wildlife. Farming Capital Grant Scheme Public payment: Local government Funding which can be obtained from developers by the Community Local Planning Authority and that provides funding for Infrastructure Levy Planning instruments infrastructure or site specific mitigation (including green (CIL), Section 106 space provision) agreements (s. 106) Public -private payment Partnership approach to improving both wildlife and water quality affecting catchments by treating problems Catchment management PES scheme specific- at the source. Partners which may be involved include plans/ programmes i.e. SCaMP charitable trusts, who may receive additional government funding, and utilities companies. Private payment PES scheme specific- Competitive bidding process whereby sellers nominate Reverse auctions/ tenders i.e. PES Pilot Fowey particular services and the price at which they are willing approach River Improvement to sell them Auction Visitor payback Visitors make a voluntary financial contribution to secure Visitor contributions schemes, membership specific benefits from ES. fees Provides standards to be used as the basis for business Woodland Carbon Independent certification investment in habitat, some examples include Code, Peatland standards opportunities for offsetting Carbon Code Beneficiaries are charged a levy (generally paid annually) for the use of the ES provided. In most cases, PES scheme specific- Levies a levy mechanism relates to residents of development i.e. Commons Levy near to a high value site and is paid through an intermediary. Based on information presented in Smith et al (2013)
2.3 Canal & River Trust The Trust is one of the UK's newest charities, created in July 2012 as the successor to British Waterways (BW). The Trust is responsible for the management of 2,000 miles of inland waterways in England and Wales. Over 35,000 boats and 13 million towpath visitors use its canals and rivers each year. These waterways represent a 200-year old working heritage and a nationally important green wildlife corridor. Almost half the population of England lives within 5 miles of a canal and as a network they contain over 1,000 conservation wildlife sites, including 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study 6
65 SSSIs and 18 Natura 2000 sites. The Trust is keen to gain a better understanding of the specific ES which are provided by the inland waterway network and the potential to develop payment mechanisms for these and for their role in supporting, maintaining and enhancing these.
2.3.1 Charitable Objects The Trust was established as a charitable trust in 2012, replacing and taking on the responsibilities of the previous public corporation British Waterways. The Trust's charitable objects set out the overall aims and purposes of the Trust, and the scope of the Trust's work allowed under charity law. These objects include: • To preserve, protect, operate and manage inland waterways for public benefit: o For navigation; and o For walking on towpaths; and o For recreation or other leisure-time pursuits of the public interest of their health and social welfare. • To protect and conserve for public benefit sites, objects and buildings of archaeological, architectural, engineering or historic interest on, in the vicinity of, or otherwise associated with inland waterways. • To further for the public benefit the conservation, protection and improvement of the natural environment and landscape of inland waterways. • To promote, facilitate, undertake and assist in, for public benefit, the restoration and improvement of inland waterways. • To promote and facilitate for public benefit awareness, learning and education about inland waterways, their history, development, use, operation and cultural heritage by all appropriate means including the provision of museums. • To promote sustainable development in the vicinity of any inland waterway for the benefit of the public, in particular by: o The improvement of the conditions of life in socially and economically disadvantaged communities in such vicinities; and o The promotion of sustainable means of achieving economic growth and regeneration and the prudent use of natural resources.
2.3.2 Strategic Priorities The Trust's strategic priorities were established at its foundation and are outlined in its strategic document Shaping our Future (Canal & River Trust, 2012b). These strategic priorities set out what the Trust needs to do at present and what they would like to achieve. The Trust's charitable objects are incorporated into these. The strategic priorities have been set to unlock the potential to fully engage with the Trust's visitors, neighbours and business partners and include: • Ensuring our canals and rivers are open, accessible and safe • Inspiring more people to enjoy the canals and rivers and support our work • Earning financial security for our canals and rivers o Meeting our obligations and responsibilities under statute and the Defra funding agreement o Constantly challenging our cost base to seek efficiencies o Growing our earned income from existing sources and developing new ones o Developing our fundraising capability to (at least) meet the targets we have set ourselves for the first 10 years • Doing everything we can to deliver on our charitable objectives • Minimising the impact we make on scarce resources • Establishing the Trust as a respected and trusted guardian of our canals and rivers These objectives shape the Trust's work programmes, and are intended to deliver its statutory obligations and give direction to its investment priorities. The Trust currently receives funding from the UK government through a 15 year contract and aims to achieve its targets during this period to support the case for further Government funding beyond this period. Achieving financial 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study 7
security is a key element underpinning delivery of the Trust's other strategic priorities. Growing the Trust's income through existing sources and developing new income streams is considered key to achieving this and other priorities, and is the impetus for the pilot study.
2.3.3 Grant Agreement with Defra This Grant Agreement outlines the terms of the grant provided by Defra to the Trust in support of, and to be applied to, the Trust's Charitable Objects. Therefore, the agreement does not represent a contract for services. The only requirements placed on the Trust are that the Conditional Grant is subject to maintaining the standards set out in Schedule 7 of the Grant Agreement which relate to the structural condition of the canal system, towpath condition and flood management. The Grant can only be applied towards defraying the costs and expenses of the activities undertaken in pursuit of the charitable purposes of the Trust. The change of organisational structure to a charitable trust allows the Trust to leverage other monies to support its activities. As such, it is now important for the Trust to grow its earned income and find new fundraising activities. This pilot study considers whether the Trust’s new status assists in the establishment of the PES approach. This relatively new organisational structure and the broad nature of the charitable objects have presented a challenge to this project in relation to the determination of Trust activities and identification of ES which are additional to regulatory requirements. However, as stated above, as the Grant Agreement is not a contract for services, for the purposes of this pilot study it has been considered that the majority of Trust activities undertaken are over and above statutory requirements.
2.3.4 Environmental Strategy An Environmental Strategy Paper for Trustees (Canal & River Trust, 2012a) was recently produced which outlines a proposed new approach to the Trust's asset management. The approach focuses on improving and promoting the Trust's environmental assets. This paper reports on market research undertaken to inform the establishment of the Trust which includes the finding that 18% of those polled (2nd highest) identified a 'haven for wildlife' as the biggest issue if the waterways were lost. The paper suggests that minimum environmental standards should be introduced which provide a monitoring baseline through which environmental performance can be assessed. The publication of the annual State of the Waterways environmental report will be used to measure the condition of the waterway environmental assets against a series of indicators. The strategy paper also outlines environmental achievements via the 2010/11 British Waterways' Programme. Details of key environmental issues for the Trust are highlighted in the report and these are summarised in the following diagram.
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Figure 1: Canal & River Trust Key Environmental Issues
Source: Canal & River Trust, 2012, p.5
Existing Revenue Revenue and expenditure information for the Trust's network is available from the Trustee’s Report and Accounts released by the Trust (Canal & River Trust, 2013)). Key financial information for England and Wales for the period of October 12 2011 to March 31 2013 which is of relevance to this PES study is listed below in Table 3. Table 3: Canal & River Trust Revenue 2011-2013
Incoming resources £m
Voluntary income Donations 0.9 Defra grant funding 29.3 Leisure boating and mooring 26.4 Income from marinas operated by BWML 5.2 Utility income and water sales 17.4 Investment income 31.1 Waterway infrastructure income 4.6 Waterway regeneration and restoration 5.1 Museums and attractions 0.7 Other incoming resources 1.4 122.10 Total incoming resources (revenue):
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Resources expended £m
Cost of generating funds 28.8 Waterway infrastructure maintenance and repairs 86.7 Waterways regeneration and restoration 7.0 Museums and attractions 2.4 Governance costs 1.3 Total resources expended (expenditure): 126.20
Management of the Trust's waterways is supported by commercial charging for some services, such as boating, angling, water supply and some aspects of water drainage, with further income gained through property assets, external funding and from direct public support and donations. A major source of revenue for the Trust is the commercial development of Trust owned land adjacent to the waterways network. To deliver environmental objectives, the Trust currently relies mainly on various donation schemes targeted at local users. The Trust's expenditure on the Aire and Calder Navigation and the Leeds-Liverpool Canal totalled £8 million from 2009-2012.
2.3.5 Pilot Study Area The area selected for the pilot study is a section of the canal network extending from the River Aire in the centre of Leeds, through the Leeds canal basin and along the Leeds-Liverpool Canal to rural Silsden; incorporating parts of the Leeds-Liverpool Canal and the Aire and Calder Navigation. This section is comprised of approximately 50km of canal and river, which takes in city centre urban, urban fringe, small towns, and the rural agricultural landscape. The area is covered by two local authorities: Leeds City Council and the City of Bradford Metropolitan District Council. The pilot study area is shown below in Figure 2. Figure 2: The initial pilot study area
© The Canal & River Trust copyright and database rights reserved 2012 © Ordnance Survey Crown copyright. All rights reserved 2012
The pilot study area was carefully selected as a sample of canal which is scalable to the wider inland waterways network and considered to be representative of the characteristics of the national network of inland waterways. The length of canal included in the pilot study includes designated and non-designated sites of nature conservation value and also important areas of built heritage, including the UNESCO World Heritage site at Saltaire. It also includes identified regeneration sites adjacent to the canal. The pilot area has moderate to high boating traffic and footfall, except for the line of the Bradford Canal which has been largely in-filled and built over and is proposed for regeneration. The section receives both urban and rural direct and diffuse drainage.
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The section of the Leeds- Liverpool Canal within the pilot area forms part of the Humber River Basin District for the purposes of the Water Framework Directive (WFD). The majority of canals are considered artificial water bodies according to the classification of the WFD, including the Leeds-Liverpool Canal, and therefore have different classification goals to main water bodies. The aim for artificial water bodies is to attain Good Ecological Potential, which is the current classification of the Leeds-Liverpool Canal. The River Aire is currently classified as having Poor Ecological Quality and Good Chemical Quality. This is predicted to improve to Moderate (ecological) and Good (chemical) by 2015. The Leeds-Liverpool Canal falls within the Aire Catchment Flood Management Plan (CFMP). There is a long history of flooding from the River Aire, with recent flood events in 2000, 2007 and 2008. Within the boundary of the Aire CFMP there are just fewer than 3,400 properties at a 1% risk of flooding each year. There are approximately 124 km of flood defences. There are also over 300 properties at risk from surface water/sewer flooding.
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3 Pilot study approach and summary of findings
3.1 Approach to the study This section of the report describes the approach that was taken to conduct the pilot study, and its key findings.
3.1.1 Methodology The approach adopted to conduct the pilot study is outlined below . Pilot Study Approach and Phase 1 Following initial discussions with the Trust, it was recognised that studying the full section of the canal would require far more resources than had been allocated to the study, Therefore it was agreed with the Trust and the Project Board that a case study approach should be adopted, identifying key locations along the canal which showed clear benefits from ES and had the potential for a PES mechanism to be introduced. In these locations, the role of the Trust in supporting, maintaining and enhancing the ES provided was investigated. Further to this, Phase 1 involved collecting GIS data from the Trust in order to gain a better understanding of existing features within the pilot study area. This data was used to inform the selection of the case study sites. Data collection was somewhat restricted due to availability and validity of GIS data; some of the GIS data held by the Trust relating to the pilot study area was outdated or could not be obtained due to licensing and corporate restrictions. Site visits of several areas of the pilot were undertaken to support the desk based review and to gain a greater understanding of the ecosystem services provided by the Leeds-Liverpool Canal and the activities undertaken by the Trust to maintain and enhance them. Phase 2 - Selection of case studies and identification of ES within the pilot area The case study locations were selected based on the outcome of the initial investigations in Phase 1. Site visits to the locations were undertaken in order to confirm appropriateness. In order to focus the research, four main ES were identified which the Trust plays a crucial role in supporting. These included water quality; water resources; habitat provision and restoration; and recreation. Water quality Within the pilot study area, water quality is an issue in relation to contamination, diffuse drainage and pollution incidents. Key inputs to this ES provided by the Trust include containing pollution incidences, rubbish clearance from weir booms and culverts, dredging and intercepting silt (which could potentially benefit the river system). Water resources Within the pilot study area, ES relating to water resources are provided by accommodating run off from the built environment or impermeable surfaces with a lack of appropriate drainage, closure of locks which may act as flood gates when required, and conveyance of water. There are several feeder channels along the pilot study section of the canal which illustrate the reciprocal relationship that the canal can have with other sources. These relationships may be beneficial to the Trust’s management of the canal (the feeder streams provide the canal with water in times of low flow) but may also have negative consequences (increased chance of contaminants and transfer of alien invasive species). In addition the canal, and the Aire and Calder Navigation, provide a flood risk management role in various locations (in relation to the River Aire not just the canals) which is not resourced by any external source. Habitat Provision and Restoration Several of the Trust’s management activities are considered to have an impact on this ES within the pilot area. These include the management of habitats within the Leeds-Liverpool Canal SSSI and the control of alien invasive species along the inland waterway network. For example, the Trust undertakes dredging to ensure the canals remain navigable, but this also has a benefit for the SSSI in terms of species diversity. In addition, the Trust’s work controlling invasive species has a significant biodiversity, recreation and amenity benefit as well as enabling continued access along the canal and towpaths. 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study 12
Recreation Within the pilot study area, opportunities for recreation are provided by the canal network. This includes both land (towpath) and water (canal) based recreation. The towpath route along the Leeds-Liverpool Canal encompasses sections of popular routes including the Trans Pennine Trail, Aire Valley Towpath Route and National Cycle Routes. Towpath and canal structure management are important issues for the Trust (towpath condition is one of the relevant standards which the Trust must uphold according to the Final Grant Agreement with Defra), and provision for recreation is included in both the charitable objects and strategic priorities.
3.1.2 Case studies Key issues relating to these sites within the pilot area were discussed in detail with the Project Board and this formed the basis of further investigation of ES and Trust activities within these locations. The table below outlines the case study locations and key environmental issues for further investigation. It should be noted that most activities are undertaken to some degree at each location; we have just highlighted where they are particularly evident and suitable for investigating in relation to PES. Table 4: Long List of Case Study Locations and Associated Trust Activities
Crown Trust Apperley Pollard Office Canal Knostrop Silsden Saltaire SSSI Point Bridge Lane Locks Wharf Cut activities Weir Water quality Desilting, sediment removal and disposal – existing Desilting, sediment removal and
disposal – existing & historical Litter and debris removal (from weir booms, locks and by- weirs) Pollution
control Water resources Surplus water discharge Rural land
drainage Built environment surface water drainage Flood Risk
Management Habitat Provision Control of invasive vegetation
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Crown Trust Apperley Pollard Office Canal Knostrop Silsden Saltaire SSSI Point Bridge Lane Locks Wharf Cut activities Weir Tree and Hedgerow management Recreation
Towpath maintenance
Dredging
Litter and rubbish removal
Further to the above analysis, site visits and discussion with the Project Board and the Trust, it was agreed that the following locations should be the subject of case studies: • Apperley Bridge : provides an example of multiple ES being provided within one location and has the most varied environmental issues of all suggested case study locations, including water resources, water quality and cultural services. This case study provided an opportunity to investigate beneficiary attitudes and willingness to pay. • Knostrop Cut : provides an example of the recreational and visual amenity ES provided by the Leeds-Liverpool Canal and enables investigation of the potential for obtaining funding through planning instruments. • Leeds-Liverpool Canal SSSI : provides an example of the habitat related ES provided by the canal and how these may be improved. It also highlights the importance of considering the impact of 3rd party land management practices. • Pollard Lane : provides an example of how the canal may contribute to visual amenity and setting and examines the influence of property premiums beyond the immediate waterfront. Phase 3 During Phase 3, the main activities of the pilot study involved addressing knowledge gaps and engaging stakeholders, with the objective of developing the evidence base for potential PES mechanisms and identifying current levels of engagement between the ES stakeholders. Input from stakeholders also helped test the validity and potential of the mechanisms identified. Liaison with several organisations aimed to test the validity of PES payment mechanisms and provided further supporting evidence. Stakeholders consulted were: Leeds City Council, Bradford Metropolitan District Council (Bradford MDC), Natural England, the Environment Agency, Aire Rivers Trust and representatives of a new development located at the Pollard Lane case study location. The culmination of the study involved making recommendations to the Trust for developing a PES scheme, in terms of potential payment mechanisms and opportunities for their application.
3.2 Pilot study findings The following section summarises the outcomes of the four case studies conducted; the full case study factsheets are included in Appendix B. These case studies present examinations into specific locales along the Leeds-Liverpool Canal which currently provide a range of ES at no cost to many of those who benefit from them. They also examine the degree to which the activities of the Trust maintain or enhance the ES provided.
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3.2.1 Case study 1: Apperley Bridge Apperley Bridge has been selected as a case study due to the variety of ES the canal provides in this location. It also investigates the service demand and beneficiary elements of the pilot study.
3.2.1.1 Location Apperley Bridge is a village in the Metropolitan Borough of the city of Bradford. The case study area at Apperley Bridge is shown in Figure 6. Figure 6: Apperley Bridge
Dobson Locks
Feeder channel output
Marina
Feeder channel pathway
Source: Bing Maps, 2013
3.2.1.2 Ecosystem services Initial investigations of the ES provided by the Leeds-Liverpool Canal at Apperley Bridge have identified the following: Regulating • Drainage and water conveyance Provisioning • Water quality Cultural • Recreation (towpaths) • Visual amenity (canal setting for waterfront properties) The lack of appropriate surface drainage within the public pathway area of the new development adjacent to the canal which provides access to the marina, along with the topography of the surrounding area and the lack of appropriate barrier surrounding the marina, suggests that the canal collects/ most of the surrounding area’s surface water run-off. There are several waterfront developments which benefit from their position adjacent to the canal and are afforded visual amenity due to their proximity to the waterfront. These developments benefit from the canal setting. Recreation is also provided in this case study area, both on land and water.
3.2.1.3 Trust activities The Trust undertakes the following activities to support, maintain and enhance the above ES: • Management of feeder channels providing water conveyance and drainage
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o The area around Parkin Lane, including part of the canal and surrounding land that is owned by the Trust, is partly designated as an area of extreme flood and is at risk of flooding from the river. It is also highlighted as a Flood Warning Area. o Whitefield Mill feeder channel is located to the East of the marina and provides the Leeds-Liverpool Canal with an intake of water. There are many potential water quality issues associated with the feeder channel, including possible introduction of silt and contaminants. In addition, the feeder channel illustrates a reciprocal arrangement that the Trust manages as the Leeds-Liverpool Canal is both reliant on this feeder channel when water levels are low, but also can restrict flow to the river at times of flood risk. • Pollution control • Dredging • Towpath management The Trust is not a drainage authority and therefore does not have to accept water sources being inputted into the canal. Any water inputting into the canal may be subject to a charge. The Trust also has no responsibility for water conveyance or flood protection beyond what is described in the Grant Agreement, which refers to the structural integrity of the canal infrastructure.
3.2.1.4 Stakeholder engagement Within this case study location, local residents were asked to participate in a questionnaire. The questionnaire was distributed to 8 clusters of housing adjacent or in close proximity to the canal in order to represent a cross-section of Apperley Bridge residents. The aim of the questionnaire was to gain a better understanding of beneficiary attitudes and opinions of the ES provided by the Leeds-Liverpool Canal. Further to this, several organisations were approached in order to determine their opinion of the benefits they derived from the Leeds-Liverpool Canal. These organisations included: Natural England, Environment Agency, City of Bradford Metropolitan District Council, and local schools. Consultation with the City of Bradford MDC was also undertaken in relation to the potential applicability of s.106 and CIL. The LPA has not yet adopted CIL although feasibility studies are ongoing and the Trust may benefit from early consultation in order to raise awareness of potential infrastructure projects related to the canal.
3.2.1.5 Potential PES mechanisms The following list outlines some potential mechanisms where further investigations could be focused: • S.106 and CIL in relation to new developments and their impacts on the canal • Local authority funding relating to the surface water drainage and conveyance provided by the canal (other potential funding sources for this may include Highways Agency or developers, depending on the location of the drainage issues) • Catchment management type funding relating to water quality (may be obtained from the Environment Agency, or from the local authority acting as a proxy buyer on behalf of the local community inputting into the canal through feeder channels and unregulated inputs).
3.2.1.6 Beneficiaries and willingness to pay This case study has provided a useful insight into beneficiary attitudes and willingness to pay. A beneficiary analysis was undertaken in relation to the ES provided at Apperley Bridge and is shown in Figure 7 below. This analysis highlights that it is the cultural services provided by the Leeds-Liverpool Canal which benefit the widest range of people and organisations, including visual amenity, recreation, cultural heritage and appreciation for wildlife. The groups which benefit most from the services of the canal include local residents, canal users and interest groups.
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Figure 7: Beneficiary analysis of Apperley Bridge case study
Land owners
Local residents
Water conveyance Developers Regulating Flood alleviation Canal users
Bradford Council
Habitat provision Local businesses
Cultural heritage Interest groups Cultural
Recreation Schools
Visual amenity English Heritage
Natural England
Canal & River Trust
A questionnaire was developed to assess local residents' opinions of the value and benefits provided by the Leeds-Liverpool Canal, and their associated willingness to pay (WTP). A good response rate of over 50% was achieved, however as this constituted only 44 completed questionnaires in total, in depth statistical analysis was not appropriate. Findings that can be drawn from the survey are set out below. Respondents were asked to identify the benefits they believed were provided by the canal at Apperley Bridge, selected from a list of potential benefits which included the option to select “ The canal at Apperley Bridge does not provide me with any benefits ”. The top five benefits provided by the canal, as identified by the respondents, included: • Access (79% of respondents) • Visual amenity (77% of respondents) • Relaxation (75% of respondents) • Appreciation of wildlife (72% of respondents) • Historic heritage (45% of respondents) Only around 5% of residents recognised the drainage and flood protection benefits provided by the canal. 89% of respondents could identify at least three benefits they believed were provided by the canal. Further to this, 100% of respondents agreed that it is important to protect and maintain the canal. 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study 17
Responses were also analysed based on residential clusters. Residents of waterfront properties were more likely to consider that the canal had influenced their decision to move to Apperley Bridge than residents living further away. The findings also suggest that proximity to the canal is an influencing factor for purchasing property beyond the immediate waterfront. In addition to this, there is a clear demand for the canal and its associated services - 66% of respondents visit the canal often, with a further 32% visiting occasionally. The respondents have shown that beneficiaries do have a demand for the services and results of questions relating to WTP show that the majority of respondents (59%) would be willing to pay for the maintenance or improvement of the canal in some capacity. The quality of the water in the Leeds-Liverpool Canal is likely to affect the River Aire, as the two join to form a section of canalised river near Leeds City Centre. If the Trust were to increase the regulation of inputs into the canal then funding for improvements to water quality may potentially be obtained from the Environment Agency, or the local authority acting as a proxy buyer on behalf of the local community, through a type of catchment management funding. Finally, the canal provides the potential for funding from local authorities to support surface water drainage undertaken by the canal.
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3.2.2 Case Study 2: Pollard Lane This case study aims to highlight that the ES provided by the canal which influence the premiums and attractiveness of nearby developments extend beyond the immediate “waterfront” locale.
3.2.2.1 Location Pollard Lane is located in close proximity to both the Leeds-Liverpool Canal and the River Aire in the area of Newlay, Leeds. The case study location is shown in Figure 5. There is a new development located just off Pollard Lane. Phase 1 of the development is complete and a number of houses are currently inhabited. Phase 2 is currently at application stage and the status of this application is Pending Consideration. The section of towpath in close proximity to this development (adjacent to the development across Pollard Lane) forms part of the Aire Valley Towpath Route and National Cycle Route 66 (Transpennine Cycle Route). Figure 5: The Leeds-Liverpool Canal at Pollard Lane
Housing development near Pollard Lane Leeds-Liverpool Canal
Source: Bing Maps, 2013
3.2.2.2 Ecosystem services The ES provided by the Leeds-Liverpool Canal within this case study location are: Cultural • Recreation (towpath and water based) • Visual amenity (significant contribution to the landscape setting of the area) The Leeds-Liverpool Canal provides opportunities for land and water based recreation. The demand for visual amenity within this case study location can be considered high.
3.2.2.3 Trust activities The Trust undertakes the following activities to support the above ES: • Towpath management (the towpath is well used in this area and provides important linkages to other areas along the canal corridor) • Maintenance activities supporting navigation and visual amenity
3.2.2.4 Stakeholder engagement During the pilot study, discussion with a sales consultant for the development associated with this case study confirmed the beneficiary demand for development in this area, and that the general location (also including the River Aire and surrounding countryside) is a draw for buyers.
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Planning officers from Leeds City Council were consulted to confirm the viability of the CIL mechanism in relation to this case study. Leeds City Council plans to adopt CIL and has produced a list of potential infrastructure projects to be funded through the Levy. Whilst the Trust did not input to the recent consultation on the list (the draft charging schedule), there are still opportunities to make the case for canal related infrastructure projects via direct liaison with the Council.
3.2.2.5 Potential PES mechanisms The potential PES mechanisms applicable to this case study are similar to those outlined in Case Study 1 and include CIL and s.106. • The use of CIL as a payment mechanism may be more appropriate in this case study, in which a levy is raised through all new developments and this levy is used to fund infrastructure projects which have been determined by the LPA. • S.106 could be an appropriate PES mechanism, although in the future CIL will replace the s.106 'tariff' approach and s.106 will mainly be used to mitigate site-specific aspects of development. Several documents submitted in support of the planning application reference the proximity to the Leeds-Liverpool Canal and emphasise the canal as a positive local feature.
3.2.2.6 Beneficiaries and willingness to pay The beneficiaries of the ES provided by the Leeds-Liverpool Canal within this case study include: • Residents of the development • Visitors using the Trans Pennine Trail and other popular walking and cycle trails • Canal users. The Trust has not received any additional funding for the maintenance or improvement of the section of towpath within the case study area (between Newlay Locks and Forge Locks), which forms part of the Trans Pennine Trail and various other popular walking and cycling trails. Property values tend to attract a premium based on their location and waterside properties are well known for their potential to increase in value. This ‘hedonic pricing’ concept tends to be considered where properties are based directly adjacent to the attraction in question (here, the canal), but it is possible that nearby properties, such as the Pollard Lane development would also achieve higher values as a result of the location (recognising that the River Aire and surrounding countryside contribute to the setting as well as the canal). As developers are benefiting from the amenity value of these locations by charging higher property prices, the CIL payment mechanism could potentially be replicated throughout the inland waterways network in different LPAs where planning permission for new developments in close proximity to Trust owned land is being secured, particularly if the canal offers significant recreational or amenity opportunities to the residents of the development as outlined in this case study. We also considered the potential of a Parish Precept type approach in which residents living adjacent to or very close to inland waterways pay an additional premium on their council tax which is used to support the Trust’s maintenance activities. Whilst residents are likely to have paid higher than average property prices, they should also recognise the ongoing costs of maintenance to ensure the continued high quality of the canal environment. However, this is unlikely to be successful in the current public funding environment. HM Treasury rewards those authorities that freeze their council tax with a grant, which would be lost if a Precept were introduced, and should the Precept be valued at more than 2% of the full Council Tax, then a public referendum is required which is costly and time-consuming.
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3.2.3 Case study 3: Leeds-Liverpool Canal SSSI This case study highlights the importance of effective third party land management practices in relation to the condition of the habitat and water quality of the inland waterway system. The case study also outlines potential for improvements to land management practices which will improve the condition of the SSSI.
3.2.3.1 Location A section of the Leeds- Liverpool Canal covering 19.5 hectares, between Bridge 215 Calverley Swing Bridge and the Railway Bridge at Armley, has been designated a Site of Special Scientific Interest (SSSI), mainly due to its aquatic flora. The SSSI is divided into 7 units, of which 6 have been assessed as “Unfavourable Recovering” and 1 has been assessed as “Favourable” condition following an interim assessment in 2012 (BW and Natural England, 2012). This case study represents an important habitat, because according to the UK NEA (2011), less than 4% of the total number of SSSIs is located within or near urban areas. The Leeds-Liverpool Canal passes through both rural and urban areas. Due to the extensive coverage of the SSSI, four sites along its length were selected to illustrate current barriers to improvement of the ES provision and how these may be addressed through appropriate PES payment mechanisms. This includes two sites which were chosen to represent shading issues along the canal, and two sites to represent agricultural issues including poaching and drainage. Figure 4 illustrates a site which has been selected to represent agricultural issues relating to poaching on the offside bank of the canal near Calverley. Figure 4: Poaching on offside canal bank near Calverley
Poaching on offside bank
Source: Bing Maps, 2013
3.2.3.2 Ecosystem services ES provided by this location include: Cultural • Habitat provision (target species abundance) Provisioning • Water quality 1 (good overall but potential threat posed by 3rd party land) The primary ES within this case study is habitat provision. The Leeds-Liverpool Canal was built during the 18th and 19th centuries and therefore has provided a continuous habitat for approximately 150 years. The water quality and biological character of the canal are largely determined by the nature of the water supply and materials used in construction. The canal provides a unique aquatic habitat within this part of West Yorkshire (Natural England, n.d.).
1 The Jacobs research identified water quality as a regulating service, however following discussions with the Project Board we consider this should be re-categorised as a provisioning service 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study 21
3.2.3.3 Trust activities The Trust undertakes the following activities to support, maintain and enhance the above ES: • Control of invasive species • Dredging • Reducing shading via tree management
3.2.3.4 Stakeholder engagement Stakeholder engagement relating to this case study involved consultation with members of the Trust and the Project Board, including a representative of Natural England. The Trust currently engages with third party landowners but the focus of many of these interactions relates to estate services or neighbourly relation issues rather than improvements to land management practices and ES. Information regarding the current condition of the Leeds-Liverpool Canal SSSI was obtained from a member of the Trust’s Ecology team. The Trust may have an opportunity to further engage with Natural England, the Forestry Commission and other organisations responsible for distributing environmental stewardship type funding in order to raise awareness of opportunities for service improvements through land management practices. This in turn may help to address the need to communicate options with third party landowners of the Environmental Stewardship funding that may be available, which was highlighted as a potential communication issue.
3.2.3.5 Potential PES mechanisms The condition of the SSSI is likely to improve if third party land practices, such as restricting poaching (erosion of canal bank by hooves as cattle drink from the water), drainage discharges, and appropriate management of trees to reduce shading are improved (ECUS, 2013). There is a commercial development located within a key section of the SSSI which further affects the management of the SSSI; this development is representative of the conflicts of interest which arise between the different objectives which the Trust is required to manage. Therefore, the PES mechanisms related to this case study relate mainly to ways to address third party land management practices, and in some circumstances, the Trust would act as an intermediary rather than a seller for the delivery of the PES scheme. The potential payment mechanisms appropriate to this case study include: • Environmental Stewardship o Entry Level Stewardship (ELS) is the basic underlying agri-environment scheme that provides funding to land managers in return for more effective environmental management. • English Woodland Grant Scheme (EWGS) o EWGS provides funding for woodland and is part of the Defra family of environmental support. Natural England does have the potential to enforce management activities in order to maintain the quality of SSSIs and this applies to both activities that directly affect the canal and its banks. As such, PES mechanisms may be less applicable in areas with such designations than other areas where the maintenance of water quality and biodiversity is a high priority. The Trust manages 1000 locally recognised sites of importance for nature conservation (65 of these are legally protected wildlife sites, including 18 internationally important sites). Thus potential mechanisms identified which will improve the condition along the Leeds-Liverpool Canal SSSI may be replicated for other important sites, particularly those that do not a statutory designation. The environment along the canal generates public support and therefore it is important that sites which are of importance in terms of habitat and wildlife are well managed.
3.2.3.6 Beneficiaries and willingness to pay The beneficiaries of the ES provided by the Leeds-Liverpool Canal SSSI include: • General community • Third party landowners • Canal users
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• Local authority • The Trust The Trust spent between £1,000 and £5,000 in 2012 on the management of Japanese knotweed alone along the Leeds-Liverpool Canal SSSI. The Trust also undertakes tree management; in 2011, the Trust spent £4,000 undertaking crown lifting along this section of the canal. The Trust does not receive any additional funding (over and above the Defra Grant) for the management of invasive species or other land management practices along the SSSI. The demand for the Trust to undertake habitat restoration activities within this case study location can be considered relatively high, as improvement to the condition of the SSSI is considered by both Natural England and the Trust to be a priority. The Trust has outlined the improvement of SSSI condition as an environmental priority; wildlife corridors (including habitats, species and connectivity) are considered one of the key environmental issues within the Trust. Through the Project Board, discussions with a representative of Natural England were undertaken. The outcome of these discussions suggested that Environmental Stewardship is a viable potential payment mechanism, particularly with regards to supporting land owners (other than the Trust) such as local farmers to make changes to their practices e.g. providing fences and drinking facilities for cattle to prevent poaching. There may be challenges in the Trust itself securing funding from this source as it particularly relates to agricultural activity which is generally not within the Trust’s remit.
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3.2.4 Case study 4: Knostrop Cut This case study has been included to illustrate the potential for obtaining monies through the planning system for developments in close proximity or adjacent to the inland waterways network.
3.2.4.1 Location Knostop Cut is located between the canalised section of the River Aire and the Aire and Calder Navigation, near the centre of Leeds. The Trust owns a relatively large proportion of the land in the immediate vicinity of Knostrop Cut, including the embankment between the Cut and River Aire, industrial land to the north of the Cut between the canal and Thwaite Gate Road and the land which is currently occupied by Thwaite Mills Museum. Trust land ownership in the area is shown in Figure 3. There is a residential-led development located on Yarn Street on the Hunslet waterfront, in close proximity to Knostrop Cut. The development, known as H2010, is a result of collaboration between many partner organisations. H2010 is one of the Leeds Urban Eco Settlements. Construction is ongoing at this development, although Phase 1 and 2 are complete. Figure 3: Trust Ownership Boundary- Knostrop Cut and surrounding area
Canal & River Trust ownership boundary © The Canal & River Trust copyright and database rights reserved 2012 © Royal Mail copyright and database rights 2012
3.2.4.2 Ecosystem services ES provided by this location include: Cultural • Recreation (towpaths and canal) • Habitat provision (aquatic marginal vegetation and scrub) • Visual amenity (canal setting) Regulating • Flood protection (physical structure of Knostop Cut and lock management) Recreation is considered to be the primary ES provided within this case study. The habitat of the area has been assessed several times and each assessment identified the habitat surrounding Knostrop Cut as important feature to retain.
3.2.4.3 Trust activities The main activities undertaken by the Trust in this location to support the above ES are: • Towpath management (the towpath along the embankment is well maintained and forms part of the Trans Pennine Trail) 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study 24
• Litter and rubbish removal (from weir booms).
3.2.4.4 Stakeholder engagement Potential communication issues regarding payment for services within this location were examined through consultation with members of the Trust’s Planning Team. The Trust is a statutory consultee for major developments within 150m of the canal and minor developments within 50m of the canal. In its consultation responses, the Trust has the opportunity to highlight where contributions, conditions and mitigation is required. For example, the Trust included a request in its consultation response to the Miller Homes H2010 development for funding for a waterfront walkway and infrastructure upgrades. Potential communication issues with the use of CIL and s.106s mainly relate to communication between the LPA and the Trust. The need for contributions from planning instruments should be outlined and reinforced in statutory consultee responses. The Trust is keen to get involved in pre-application discussions with developers to ensure that any impacts on the canal are taken into account early on and mitigated against via conditions or s.106s. The opportunities for service improvements in relation to this case study were evaluated and discussed with the Project Board. Further to this, consultation was undertaken with planners from Leeds City Council to confirm the validity and potential of the mechanisms identified through this case study. The flood risk management role of the canal in relation to the physical structure of Knostrop Cut and lock management when water levels are high to prevent flooding from the River Aire was discussed in brief with Leeds City Council and the Trust, but it was not considered appropriate to investigate this in detail due to the imminent development of the Leeds Flood Alleviation Scheme (construction due to commence 2014) which will remove Knostrop Cut altogether.
3.2.4.5 Potential PES mechanisms The potential payment mechanisms appropriate to this case study are outlined below: • Planning obligations (Section 106 agreements) o There is a s.106 which exists between the developer, Miller Homes, and Leeds City Council. In the agreement, it states that Miller Homes will make a contribution to greenspace of £399,639; however, none of the funding was specifically ring-fenced for canal related activity. • Community Infrastructure Levy (CIL) o Leeds City Council plans to adopt CIL and has produced a list of potential infrastructure projects to be funded through the levy (Leeds City Council, 2013a). The production of the draft charging schedule provides the Trust with an opportunity to engage with the LPA and highlight funding requirements of relevant infrastructure projects which should support the maintenance or enhancement of the ES along the canal corridor. • The role that the inland waterway network plays in managing flood risk (over and above managing the risk from its own network) should be further researched.
3.2.4.6 Beneficiaries and willingness to pay The beneficiaries of the ES provided by the canal within this location include: • Local community • Visitors using the Trans Pennine Trail and other popular trails which follow the towpath • The developer • Residents of the waterfront development. The Trust has not received funding from any of the above for maintenance or improvement of the towpath and other canal infrastructure along Knostrop Cut and the surrounding area. There is a maintenance agreement between the Trust and the local authority for the section of the Trans Pennine Trail where the Trust has land ownership. As previously mentioned, the Trust included a request for improvements to the area through a s.106 agreement in its consultation response to the Miller Homes development. This was not included in the final s.106 agreement although a contribution to greenspace was included. Other
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than the developer (via the s.106), the views of beneficiaries have not been sought regarding their willingness to pay. However, residents are likely to have already paid a premium on their property prices for a canal side location suggesting that there is a willingness to pay for the location even if the specific ES are not explicitly recognised as an asset.
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3.3 Summary of findings The following table presents a summary of the case study findings. Table 5: Summary of case study findings
Key Trust Key Payment Case study Ecosystem Activities Stakeholders Opportunities for the Trust Mechanism Service
- Towpath - Leeds City Council - Recreation management - Developer - To raise awareness amongst local authorities of the benefits of inland waterway - Habitat - Litter and Planning - Trust ES-related improvements and potential for s.106 and CIL to help with this Knostrop Cut provision rubbish removal instruments- - Sustrans - To engage with LPA to discuss relevant infrastructure projects which may be Water - Flood risk s.106 and CIL - Visitors included on CIL charging schedules (respond to any consultations detailing resources management - Residents of development infrastructure needs) - Canal users - Control of - Natural England invasive species - Forestry Commission - To improve condition of the SSSI through better 3rd party land management - Dredging - Government (Defra) Leeds- Environmental practices (for which funding streams are available). - Habitat - Reducing - Local authority Liverpool Stewardship - To further engage with those organisations responsible for negotiating agri- provision shading via tree - Local nature reserves Canal SSSI (ELS), EWGS environment schemes in order to raise awareness of opportunities for management - Trust improvement to ES provided by the canal - 3rd party landowners - Local community - Towpath - Leeds City Council - To extend planning instrument mechanisms beyond immediate waterfront locales management - Developer - To engage with LPA and developers and other relevant parties in order to secure - Maintenance - Trust Planning funding Pollard Lane - Recreation activities - Sustrans instrument- CIL - To engage with local communities in order to raise awareness of potential supporting - Visitors infrastructure or improvement projects which may be funded through CIL funding navigation and - Residents of development which has been allocated to local communities for spending visual amenity - Canal users - Management of - To secure funding for recreation and visual amenity ES through s.106 and CIL Planning - Bradford Council feeder channels - To improve water quality through regulation of inputs into the canal, for which - Water instruments- CIL - Local residents - Pollution funding may potentially be available through catchment management type funding Apperley resources and s.106 - Canal users control mechanism Bridge - Visual Catchment - Environment Agency - Dredging - To examine potential for local authority funding due to surface water drainage ES amenity management - Marina owners and users - Towpath provided by the canal type funding - Developers management
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4 Potential PES Mechanisms This section presents a discussion of potential PES mechanisms which have been identified as relevant for the Trust to develop in order to secure additional income for its activities in maintaining and enhancing ESs along the Leeds Liverpool Canal and other inland waterways.
4.1 Current Trust Activity According to the figures released within the Trustee’s Report and Accounts in 2013, the Trust’s current expended resources exceed its incoming resources by £4.1 million. Therefore, it is essential that the Trust adopts various approaches to raising funds. The Trust’s new status as a charitable trust is likely to improve its ability to raise funds from a variety of sources. Voluntary roles and responsibilities within the Trust are being increased, with volunteers undertaking many tasks including environmental research, helping keep the canals open, helping children discover the heritage of the waterways and clearing up towpaths. Some examples of recent innovative Trust activity include: • Partnership with Transport for London to improve a mile-long stretch of towpath in Islington • Improvement of 3.5 miles of Olympic Park waterways through dredging, removing rubbish, controlling invasive species, preventing soil erosion and creating new wildlife habitats • Partnership with the Wildlife Trust to improve the environment within the Birmingham Canal Main Line • Development of a phone app which has been launched to provide visitors with information about the Leeds-Liverpool Canal between Bingley Five Rise Locks and the World Heritage Site at Saltaire (this use of technology has potential to link to PES mechanisms as described in section 4.4. below). Due to its current limited resources, it is suggested that the Trust should prioritise the development of PES schemes with well established mechanisms that are more likely to generate funds, but should not discount developing more innovative potential funding mechanisms in the future. It is hoped that this pilot study and report will raise the internal profile of ES provided by the inland waterways network within the Trust. This in turn should lead to Trust employees proactively promoting positive environmental messages to external audiences.
4.2 Planning Instruments PES mechanisms sourced through the planning system include s.106 and CIL. These funding streams have the potential to secure funding for improvements to the inland waterways where new development benefits from the ES provided by these.
4.2.1 Section 106 Agreements Section 106 agreements (s.106) are mechanisms for securing planning matters arising from a development proposal. They are used to more closely align development with the environmental and sustainability objectives set out by relevant planning policies (DCLG, 2006). A s.106 forms a legally binding contract between the developer and the Local Planning Authority (LPA). Contributions may be negotiated for a range of infrastructure and services, including community facilities, public open space, transport improvements and affordable housing. There are several different forms of planning obligation contributions which are available to LPAs and developers. These include: • In-kind and financial contributions: the developer may agree to build or directly provide the matters necessary to fulfil the obligation. This is known as an in-kind contribution. The planning obligation may also be fulfilled by a direct financial payment to the LPA. • One-off payments and phased payments: if financial contributions are used to fulfil the obligation, these may be made by developers as a one-off contribution or as a series of payments over time. The schedule of payment is negotiated between the developer and the LPA. 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study 28
• Maintenance payments: planning obligations may also be fulfilled through maintenance payments. In these circumstances, the developer will make a financial contribution towards the physical upkeep of infrastructure or facilities. The schedule of payment may again vary for this type of agreement, being either by regular payments or commuted (lump) sum. • Pooled contributions: the financial contributions made to fulfil planning obligations may be pooled together from more than one development in order to address cross- development impacts. This type of contribution is generally used when the cumulative impact of a number of developments creates the need for new or improved infrastructure. The use of s.106 applies to the Knostrop Cut case study. Knostrop Cut represents an area that some beneficiaries, particularly residents of the development and recreational users, are benefitting from ES provided by the canal at no cost and new development in the area has secured a significant amount of funding for green space provision for the LPA. The existence of a s.106 relating to the H2010 development totalling £399,639 highlights the potential funding opportunities which may be provided by this mechanism in the future. It also highlights the advantage of having a structured mechanism to secure funding from developers. In their consultation response for the development, the Trust did suggest potential improvements to the canal to which the developer should contribute; however, no funding was allocated to these improvements. According to the Justification for the Community Infrastructure Levy report produced by Leeds City Council (Leeds City Council, 2013b), £6,568,051.00 in funds were raised through planning obligations between April 2010 and March 2012, of which £1,733,625.00 were allocated to green space provision. The Trust may also enter directly into s.106 agreements with a developer, or be a party to these agreements. However, the disadvantage of the Trust entering directly into these agreements with developers rather than obtaining the funds through the local authority is that the Trust may not have the resources to ensure that the agreement is fulfilled. The key issue in relation to s.106 as highlighted by the Knostrop Cut case study is communication with the LPA, developer and any other parties involved in these agreements. The need for contributions from s.106 should be detailed in the Trust’s statutory consultee responses for new development. Discussion with the LPA will ensure that a case is made for obtaining a proportion of contributions for green space provision where the development benefits from the ES provided by the canal. The Trust should continue to be proactive in seeking pre-application discussions with developers to ensure that any impacts on the canal are taken into account early on and mitigated against via contributions or conditions. The s.106 mechanism may potentially be replicated throughout the inland waterways network in various local authorities, where planning permission for new developments adjacent to Trust owned land that benefits from the ES provided is being secured. The use of s.106 may also be applicable to the Pollard Lane case study, although this is dependent on the upcoming change in planning legislation relating to s.106. From as early as April 2014, CIL will replace the s.106 'tariff' approaches which are currently used for this purpose. S.106 will continue to be used for anything required for the specific development site to make it acceptable in planning terms (Planning Officers Society, 2011). This could include local site-related transport improvements, site related flood risk solutions, and provision of on-site greenspace. S.106 will continue to be a viable funding stream for site-specific mitigation and therefore relate to waterfront developments.
4.2.2 Supporting s.106 evidence In the past, the Trust has negotiated contributions relating to new development, including funding for towpath maintenance where new residential developments have led to a significant increase in footfall. For example, at Micklethwaite (NGR 410367, 440714), developer contributions to upgrades to the canal infrastructure including a new swing bridge, repairs to the canal wall, installation of a footbridge, gabions for crayfish and maintenance payments totalling approximately £2.5 million were agreed. Subsequently, the scheme was refused planning approval and therefore the Trust did not receive any funding. A further example of the use of s.106 funding to protect the environmental condition of the canal includes a recent development at Swine Lane in Keighley, within the Bradford City MDC. This development is located adjacent to the Leeds-Liverpool Canal, with a woodland buffer strip 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study 29
separating the canal from the development. This buffer strip is considered to be an important ecological feature. There is also a small parcel of woodland adjacent to the development. Contributions towards the long term maintenance of the woodland and buffer strip were secured through a s.106. The houses which are adjacent to the buffer strip are party to the agreement and cannot encroach on the area, which is defined by knee rails. The woodland and buffer strip are well used by local residents. This development provides an example of improvements to land surrounding the canal through the use of s.106 contributions.
4.2.3 Community Infrastructure Levy The CIL is a levy which LPAs in England can charge on new developments in their area. The CIL was introduced in the Planning Act 2008 and set out in the Community Infrastructure Regulations 2010. The introduction of the CIL has significant implications for the use of s. 106 agreements. The adoption of CIL is discretionary for LPAs. However, the change of use in s.106 will occur regardless of whether an LPA is adopting CIL or not. If an LPA is adopting CIL, it must produce a document (a “charging schedule”) which sets out the rate for the levy. In most cases, standardised charges will apply. The LPA must also publish a list of those items/ types of infrastructure it intends to fund though CIL. The levy is not tied to the provision of specific infrastructure projects and is not only applicable to site-specific mitigation like s.106. CIL can be used to fund any infrastructure projects as defined by the regulations. CIL applies to most new buildings and charges are based on the size and type of the new development. Charges do not apply on developments in which people will not regularly enter the building. The levy is charged on most new development that involves an increase in floor space over 100 square metres. However, all developments that involve the creation of a new residential unit will pay the levy, regardless of its area in square metres. There is also a proportion of CIL funds which will be allocated to local communities which may not need to be used on those pre- determined infrastructure projects. Leeds City Council plans to adopt CIL and changes are expected to take place by April 2014 at the latest (although this may now be extended to April 2015 due to planned reforms to CIL). The council has produced a preliminary draft charging schedule as well as a list of potential infrastructure projects to be funded through the levy (Leeds City Council, 2013a). This payment mechanism is applicable to the Knostrop Cut and Pollard Lane case studies. The use of s.106 and CIL may complement each other, in that s.106 may be potentially obtained from new waterfront development and used for site specific improvements, and CIL may be potentially obtained from developments which are in close proximity to the inland waterways network and used for more general improvement projects which will increase the ES provided by the canal and benefit the wider community. The key issue for CIL again relates to communication, particularly with the LPA. As the charging schedule is currently at draft stage with an upcoming further period of consultation, there is an opportunity for the Trust to engage with the LPA to raise awareness of relevant infrastructure projects which may be funded through CIL. At present, there are no Trust promoted infrastructure projects included in the Leeds City Council Draft Charging Schedule. It is therefore suggested that the Trust responds to the consultation detailing its infrastructure needs and providing any other appropriate comments on the proposals. Again, the CIL mechanism may be replicated throughout the canal network by those local authorities who are adopting CIL; the key here is early engagement with the LPA to ensure relevant projects are included on the lists of CIL funded infrastructure projects. These payment mechanisms have also been reflected in the findings of other PES pilot studies. For example, the RSPB Poole Harbour PES pilot identified CIL as a potential mechanism. Relevant lessons learned from the study state that local authorities are more likely to consider spending more on CIL projects if the outcome was publically controlled infrastructure. The LPAs consulted through this pilot study suggested that projects which would result in the creation/enhancement of Trust infrastructure would be considered appropriate for inclusion on the CIL charging schedule if they provide public benefit. A further lesson learned from the RSPB Poole Harbour PES pilot is that some LPAs have been reluctant to include green infrastructure on their list of infrastructure projects with other issues considered of greater priority. Highlighting public support for environmental projects to elected members is important in overcoming this, as is highlighting the multiple benefits that the project will deliver (Rhodes, 2013). The North Hull
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PES pilot study also initially considered s.106 as a potential payment mechanism (Macgillivray, 2013). All of the ES improvements mentioned in the Knostrop Cut and Pollard Lane case studies (towpath maintenance or introduction of new public walkways, habitat restoration and improvement) would be eligible for either s.106 funding or CIL. The Trust is more likely to secure public support for fund generation via s.106 and CIL due to its recent change in status; this is particularly pertinent in relation to the funding obtained from CIL which goes directly to local communities. For both CIL and s.106, the Trust should take a strategic approach to help maximise their income generating potential from these sources. CIL and s.106 money may be used to support infrastructure to improve public enjoyment and recreation opportunities along the canal network and for greater use of existing ES provided by the inland waterway network.
4.3 Environmental Stewardship Environmental stewardship is one of the more widely accepted and adopted PES mechanisms. There are several types of environmental stewardship which were considered through the pilot study. These included: • Entry Level Stewardship (ELS): The basic underlying agri-environment schemes that provides funding to land managers in return for more effective environmental management. ELS provides a straightforward approach to environmental management. The aims of ELS are to conserve wildlife, enhance landscape quality, protect the historic environment, protect natural resources by improving water quality and reducing soil erosion, and respond to climate change (Natural England, 2013). This type of funding stream may be relevant for those third party land owners whose management practices impact on the quality of the canal. • Higher Level Stewardship (HLS): More complex types of management and agreements which are tailored to specific projects. Initial investigations ruled out HLS as a potential payment mechanism within the Leeds-Liverpool Canal SSSI case study. • Conservation and Enhancement Scheme (CES): A series of discretionary payments under agreement which provides funding for management to deliver Favourable condition of SSSIs. CES is used where the land owners or managers are not eligible for funding under other grant schemes. Land eligible for this scheme must be identified and targeted by Natural England, there is no application process associated with CES. • English Woodland Grant Scheme (EWGS): Provides funding for woodland as part of the Defra family of environmental support (Forestry Commission England, 2012). Potential relevant grants considered during the pilot study included the Woodland Improvement Grant (which relates to woodland SSSIs), Woodland Assessment Grant (which may be used to create a woodland management plan) and Woodland Management Grant (to aid in the sustainable management of woodland). The environmental stewardship mechanism which has been considered for the Leeds-Liverpool Canal SSSI relates mainly to ELS and EWGS, due to the potential for third party landowners to contribute to the reduction of environmental impacts on the canal. The Trust may not be eligible for CES as it is in receipt of a public body grant. HLS may not be an appropriate mechanism in this instance because it is a targeted scheme which is only available to land managers in particular areas of the country or with specific high priority features present on the land. In relation to the types of environmental stewardship grant which are applicable to third party landowners, the Trust may act as an intermediary rather than a seller of the ES. This is considered to be the key issue for this PES mechanism, as the Trust will need to determine whether it has the resources to act in this role. Uptake of ELS by third parties is more likely if the landowners feel that assistance and guidance is available throughout the application process, as has been illustrated through the Pumlumon Project PES pilot study. Another key issue relating to this payment mechanism is the identification of an appropriate stewardship category. There are many different types of environmental stewardship, and the Trust will need to determine which type is appropriate in each circumstance. Alternatively, it may be less resource intensive for the Trust to engage with Natural England and the Forestry Commission on land management practices which affect the inland waterways and associated ES prior to their negotiations with landowners for agri-environment schemes; these measures could then be incorporated into the agreements. Defra is currently examining ways in
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which environmental stewardship could become more compatible with PES schemes (Defra, 2013). If the Trust can provide sufficient resources to address the issues highlighted above, then there is potential to replicate the use of this payment mechanism throughout the inland waterways network. This may be particularly useful as a tool to improve third party land issues which affect the quality of the waterways, thus improving the overall condition of the waterways network.
4.4 Water quality and water resource related funding
4.4.1 Apperley Bridge These payment mechanisms relate mainly to the Apperley Bridge case study. Potential payment mechanisms which may be used to support further improvements to water quality in this area include catchment management funding and local authority funding. Catchment management funding is offered to support changes to catchments that would result in improvements to water quality and wildlife. Improvements to water quality of the Leeds-Liverpool Canal may be beneficial to the River Aire, and for this reason may be applicable to catchment management. An example from Barriers and Opportunities to the Use of Payments for Ecosystem Services is highlighted, in which funding is obtained for dredging which improves water quality within the River Lee Navigation (URS Scott Wilson et al, 2011). Further to this, local authority funding may be obtained in this area on the basis of the local authority acting as a proxy buyer on behalf of the local community. The unregulated inputs into the canal pass through many public areas and the local community are likely to contribute to these inputs and subsequently affect the quality of the water which then passes into the canal. The payment mechanism may potentially take the form of a charge to the local authority based on the volume or type of input into the canal. Currently local authorities do not contribute to the Trust for its management of local inputs.
4.4.2 Wider flood risk management opportunities Both Apperley Bridge and Knostrop Cut have highlighted the potential benefits being provided to local authorities, residents and businesses by the canal managing flood risk from the River Aire. Whilst the Trust is obliged to manage flood risk from its own assets, managing flood risk from the river is clearly an additional benefit that is not being financially supported by other stakeholders. This has not been investigated in detail in this study due to the limited role at Apperley Bridge and the almost hypothetical situation of Knostrop Cut as it is soon to be removed, it is suggested that flood risk management could be a key function being provided across the inland waterways network which is currently not recognised or adequately resourced.
4.5 Other Mechanisms
4.5.1 Visitor Payback Schemes A visitor payback scheme is a scheme in which visitors make a voluntary financial contribution to secure specific benefits from ES and is another PES mechanism which could potentially be utilised by the Trust. Lessons may be learned from the Visitor Payback Scheme PES pilot study, currently being undertaken by Birmingham City University. The pilot study is examining whether smart phone technology can reach new audiences without the high administrative costs normally associated with such schemes. The Trust’s inland waterway network receives a large volume of visitors; approximately 9.9 million people visited the network’s towpaths for the year ending March 2013 as stated in the Trust’s publication data. As the Trust has demonstrated an ability to utilise smart phone technology for other projects, this mechanism may provide an opportunity for the Trust to use this form of targeted fund-raising which could be focused on a specific ES and aimed at obtaining funds from ES beneficiaries. This mechanism could also be applied to the wider network; however, the level of contribution which could be achieved is unknown.
4.5.2 Crowd sourcing Crowdsourcing can be used to obtain needed services or funds through contributions from a large group of people (a crowd). Crowdsourcing generally occurs online and merges the efforts of many individuals which are then combined to result in a more substantial outcome. The Trust is already involved in a form of crowdsourcing through the structure of its appeals. These are
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presented as opportunities to support local projects through financial donations from the public. Those who choose to donate in this way select which project to contribute to. The donations are then grouped and the Trust publicly displays the project information, initial funding target as well as the funds which have been raised towards it (expressed as a percentage of the total needed to be raised in order to complete the project). To more closely align this scheme with PES, some of the appeal projects created may be specifically focused on the ES provided by the canal, and targeted towards ES beneficiaries, rather than the general public. A further option is to use the contribution of many individuals’ time as an in-kind payment and bundle it towards specific projects to improve ES.
4.5.3 Levies Levies relate to charges to beneficiaries, in most cases paid annually by residents of a development near to a high value site, for the use of ES provided. A levy is therefore similar to planning instrument mechanisms in that it addresses the potential benefits that residents of developments can derive from proximity to an ES; however, it differs in that the levy mechanism obtains funding directly from beneficiaries (although charges are sometimes collected through an intermediary, the ES is not paid for by a proxy buyer). The Parish Precept approach mentioned earlier is a good example; this involves council tax being increased by a small amount e.g. £1 per household, with the monies raised being provided to the Trust for maintenance and enhancement of ES provided by the canal. This mechanism may be applied by the Trust if a relevant site could be identified and an intermediary could be arranged to collect payment; however, it is unlikely that this mechanism will be widely applicable and replicable along the inland waterway network as only very high value sites are considered suitable.
4.6 Summary The PES mechanisms identified by this pilot study focus on planning instruments, environmental stewardship payment mechanisms and catchment management funding, due to their relevance to the ES presented in the case studies, their ability to be replicated throughout the inland waterways network and their potential for significant contributions. However, there are other PES mechanisms which may be relevant to the Trust, and some of these have been briefly outlined in Section 4.5 above. In general, charitable fundraising could be predicated on a PES-like basis by targeting fundraising attempts specifically at ES beneficiaries rather than the general public. There may also be opportunities for more unique, localised PES schemes along some of the canals owned and managed by the Trust.
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5 Conclusions The following section outlines the study conclusions, lessons learned and recommendations for the Trust.
5.1 Study conclusions Study conclusions can be considered around several themes. These conclusions are outlined below.
5.1.1 Project context The recent change in the Trust's organisational structure from a public corporation to a charitable trust in 2012, and the broad nature of the Trust's charitable objects, made the study context challenging in some ways. A key issue is that PES mechanisms are required to be additional to the work required of the Trust for which it receives a substantial grant from Defra. The agreement for this grant is couched in broad terms – it is intended to facilitate delivery of the Trust’s charitable objects. However, as the Grant Agreement is not a contract for services, it is considered that the majority of the Trust's activities are over and above regulatory compliance and that due to its change in structure, the Trust now has more potential for raising funds through different mechanisms than previously. The Trust may also be better placed than a non- departmental public body to engage more directly in agreements with developers and other organisations. This pilot study has raised awareness amongst Trust employees involved in the project of the potential for making use of planning obligations and other mechanisms used to fund the ES provided by the Leeds-Liverpool Canal. It is hoped that this will lead to a more widespread understanding of the potential of these mechanisms to contribute to the fund-raising capacity of the Trust. It is suggested that the Trust should first ensure that it is capitalising upon more conventional types of mechanisms such as s.106 before investigating less proven and more innovative approaches such as visitor payback. The Trust has been integrally involved in this project since its inception and has provided valuable staff time in kind to assist with the research. The project findings and this final report have been positively welcomed by the Trust which is keen to pursue the opportunities identified. Defra and the Trust will remain in close contact regarding the continuing assessment of potential PES mechanisms for application across the inland waterways network.
5.1.2 ES and PES principles Inland waterways provide many ES. In order to narrow the scope of the research to be managed with the resources available, this pilot study focused on a section of the Leeds-Liverpool Canal and examined ES which were: present in the selected case study locations, considered to be a gap within existing research, and determined to be crucial to the Trust’s activities in the area. It was on this basis that certain ES were identified as priorities in the context of this pilot study. Other ES may be provided by inland waterways which have not been examined by this pilot study. As such, it is important that any PES scheme is developed following further investigations into the ES within the relevant area to gain a complete understanding of the local context and avoid any unintended consequences. Identifying an ES provided by the canal which has the potential to be valued and then paid for by the beneficiary is complex and some of the potential mechanisms identified may be more PES- like than true PES schemes. In these cases, they may not directly incorporate the beneficiary pays principle of PES, but rely on a proxy buyer to act on behalf of beneficiaries. Nevertheless, they do provide an opportunity for the Trust to raise additional resources reflecting the true value of its work and the ES provided by the canal. According to the PES Best Practice Guide, which was used to inform later phases of the research, few existing schemes fulfil all of the PES principles in practice and therefore the fact that a 'perfect' PES scheme demonstrating all the principles has not been identified is unsurprising. From our wider research and awareness of other PES schemes either developed or under development, it appears that the most advanced area of PES development relates to water quality improvements and more specifically catchment management. The ES identified along the
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canal are likely to create some challenges for the Trust in taking forward the suggested PES mechanisms as there are varied obligations, and potential conflicts. For example, a focus on recreation and amenity could lead to negative impacts in terms of water quality, biodiversity and water resources, which will need managing to achieve a balance which limits unsustainable outcomes. However, it is rare that a single ES can be found in isolation, it is more usual for several to be in place in any one location. This will require the management of a package of ES and potential bundling, stacking or layering of ES within the PES mechanism.
5.1.3 PES schemes/ mechanisms This study has conducted exploratory research into potential PES schemes which the Trust could implement in order to receive financial compensation for the activities undertaken by the Canal & River Trust to maintain and enhance the ES provided by the Leeds-Liverpool Canal. Several network wide potential mechanisms have been outlined, and the pilot study has focused mainly on the following: • Use of s.106 and CIL to obtain funding through new development in close proximity, or adjacent to, the canal • Use of environmental stewardship funding by third party landowners to improve land management practices and thus reduce impact on the canal • Use of catchment management funding to support changes to catchments that should result in improvements to water quality and wildlife Further research needs to be undertaken before the latter two mechanisms can be implemented. This research should identify opportunities along the inland waterways network and establish a baseline for PES schemes which are to be taken forward. In addition, flood risk management is identified as a potential opportunity across the network which should be further researched in terms of baseline, activities being undertaken, potential benefits being provided and payment mechanisms.
5.2 Relevant lessons learned The pilot project’s intended outcomes were to investigate the potential for PES mechanisms in relation to a specific pilot area, and also identify lessons learned for Defra, the Trust (in terms of potentially taking the work forward on a practical basis) and other stakeholders for whom similar approaches may be appropriate. The following lessons were learned from conducting this research: • It is important not to be overly concerned with developing a ‘perfect’ PES scheme. In reality there are very few theoretically pure PES schemes and many "PES-like" schemes - such as Environmental Stewardship - but this does not change the key principle that the mechanisms should be building in “beneficiary (or proxy buyer) pays” over and above the baseline established by the "polluter pays”. • Planning instruments are also more PES-like rather than perfect PES; s.106 to a large degree is concerned with mitigating the impact of future development, whilst CIL is not a true reflection of the beneficiary pays principle as contributions from planning permissions unrelated to the inland waterway network could be used to enhance said network. However these provide a straightforward route for the Trust to secure additional income to support the activities required to retain and/or enhance ES. • Communicating the concept of ES and PES is challenging and engaging relevant stakeholders in this project has been difficult at times. Related to this has been the challenge of undertaking a theoretical pilot project which could be interpreted by local stakeholders as something that will definitely happen and raise concerns that beneficiaries of the canal may be ‘taxed’. For this reason, whilst some local residents and a developer have been consulted, consultation has not been undertaken with a wider section of local interest groups. Such consultation should be undertaken by the Trust if it is agreed to progress the development of the PES mechanisms. • The Apperley Bridge case study highlighted the value of obtaining beneficiaries’ opinions. However, results from the survey highlighted that some beneficiaries were not willing to pay for ES, even if they are aware that they benefit from the canal. This highlights the need for a proxy buyer in many cases to work on the beneficiaries’ behalf and also reflects the more general issue with PES schemes that if beneficiaries are being asked to pay for something which has previously been provided for free, there 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study 35
needs to be some added incentive. This has been proved in relation to farm management where farmers have been informed of (and often paid for) the benefits that can be accrued from preventing cattle poaching by fencing off river sections and providing drinking troughs.
5.3 Recommendations Following completion of this study, recommendations can be made to the Trust on potential measures to be taken to proceed with PES related work on a practical basis and to UK government, Defra and other public bodies on how to facilitate PES and remove barriers to its implementation.
5.3.1 Recommendations to the Canal & River Trust Trust directors should promote this report and its findings internally to raise the profile of PES within the Trust and encourage inter-departmental communication regarding ES. CIL and s.106 provide the most obvious and straightforward mechanisms through which the Trust could secure additional funding to undertake the necessary activities required to retain and enhance the ES provided by the inland waterways network. One third of Leeds City Council’s CIL is to be invested in greenspace and whilst the proportion is likely to vary between local authorities, CIL constitutes a significant resource across the country. It is recommended that the Trust engages with local authorities and LPAs to ensure that future approaches to obtaining funding through planning instruments can be strategically targeted. o Identify development sites on Local Plans which will benefit from the ES provided by the Trust’s infrastructure, and for which ongoing Trust activity is required to maintain or enhance these ES. o Hold further in depth discussions with LPAs regarding CIL or s.106 support for specific infrastructure projects or developments o Identify potential infrastructure projects and bring these to the attention of the relevant LPAs for incorporation into the CIL charging schedule. Other PES mechanisms require the Trust to undertake additional research to ensure their viability and feasibility. It is recommended that the Trust: • Engages with stakeholders and organisations (some of which may potentially act as intermediaries, buyers or sellers of a PES scheme) to take forward or further investigate the feasibility of the mechanisms identified: o Further discuss the viability of PES mechanisms with Natural England and Forestry Commission o Work with the Forestry Commission, Natural England and other organisations responsible for the distribution of environmental stewardship funding to raise awareness of land management practices which affect the Trust’s inland waterways network so that these organisations may incorporate these issues into negotiations for agri-environment agreements o Engage landowners who may be eligible for ELS and whose land management practices could have a positive or negative impact on the inland waterway network o Work with the North West Waterways Partnership to disseminate report findings which should help inform aspects of the developing Partnership Strategy relevant to the Leeds-Liverpool Canal • Develops a programme of research to support the ongoing assessment and ultimate development and implementation of the feasibility of PES mechanisms. This should include: o Establishing baselines where necessary in order to determine current level of ES provision within the inland waterway network focusing on water resources (drainage and flood management), water quality and visual amenity. o Conduct network wide research into the relationship between the inland waterways network and rivers or other water bodies, particularly in relation to the role of canals in water conveyance and flood alleviation.
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o Determine spatial boundaries within which recreation and amenity services provided by the Trust’s network may be established and credited o Identify unregulated inputs into the inland waterway network and following this identification, either seek to stop these inputs or seek payment for these in order to address associated potential water quality issues. o Conduct a valuation of the ES provided by the canal in order to determine the level of contribution which should be sought through planning instruments and other mechanisms • Further explore potential mechanisms relating to catchment management and engage with catchment networks to identify existing and emerging opportunities for such funding • Examine the potential unintended consequences (leakage of services, perception of fairness, creation of perverse incentives) of any PES scheme before beginning to implement it.
5.3.2 Observations for Government There are no specific recommendations for Defra; the report’s findings will help progress thinking on PES mechanisms along with the other pilot demonstration projects. Defra is currently investigating how to better align environmental stewardship with PES, which is supported. It is particularly important that the eligibility requirements of some environmental stewardship mechanisms are reviewed in order to allow a broader group of organisations to participate in such schemes and that a wider range of habitat types or land management practices should be considered for inclusion in environmental stewardship schemes, in order to address different types of ES. Finally, it is suggested that Defra should provide a balance in its promotion of tried and tested PES mechanisms alongside those that are more innovative. Initial reactions from the Trust on the report’s findings indicated strong support for taking forward the recommendations to maximise potential resources from planning instruments; there is an established process and arguably the Trust is currently securing less than it should from this source. Other mechanisms requiring more research to assess their viability and implementation will need additional resources yet have no guaranteed financial benefits.
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Appendices A Case Study Factsheet Template Case Study (Title) (Short description of the service/ occurrence and beneficiaries) Theme Biodiversity/Amenity/ Water Quality/ Water Resources Ecosystem Services Insert diagram showing classification and ecosystem service Case Study Location Leeds-Liverpool Canal or Aire Calder Navigation (specify location) Map Insert 2 (one map to show location in the pilot area , one map of the case study location with Trust ownership boundary) Aerial Photo Insert aerial image(s) which illustrates context of case study location Description What the service is Examine and confirm through interviews with Trust, Why the service exists/happens beneficiaries and stakeholders The Trust’s role and responsibilities Stakeholders Examine and confirm through interviews with Trust, beneficiaries and stakeholders, insert diagram to illustrate relationship between buyers, sellers and intermediaries Service Demand Examine through interviews with beneficiaries and stakeholders and examination of existing conditions Existing costs and/or funding Examine and confirm through interviews and data collection from the Trust Consequences – additional activity Examine through interviews with Trust, beneficiaries and stakeholders Consequences – reduced activity Examine through interviews with Trust, beneficiaries and stakeholders Potential Additional Funding Examine and confirm any through interviews with Trust, stakeholders and identified potential funding bodies Willingness to pay? Examine through interviews with beneficiaries and stakeholders and examination of existing conditions PES Appraisal Identify likely packaging and mechanism, suggested payment approach Highlight potential communication issues between the Trust and different actors identified in the PES mechanisms. Applicability to wider network Trust comments and examination of interventions using same mechanism elsewhere Recommendations Take forward as a potential PES mechanism, dismiss, requires additional research – specify
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B Completed Case Study Factsheets
B.1 Case Study 1 Case Study: Apperley Bridge Initial investigations regarding the ES provided by the Leeds-Liverpool Canal at Apperley Bridge have identified regulating, provisioning and cultural services. The regulating services relate to drainage and water conveyance. Provisioning services relate mainly to water quality. Cultural services encompass recreation and visual amenity. This case study focuses on the service demand and beneficiary elements of the pilot study. Beneficiaries of the ES within this case study are considered to be the local community, canal users (including marina users), landowners and residents of development adjacent to the canal, developers, the local authority, and the Trust. Theme Water Resources/Water Quality/Amenity Ecosystem Services
Case Study Apperley Bridge, metropolitan borough of City of Bradford Location Map Location within Pilot Study area
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2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study II
Canal & River Trust ownership boundary within case study location
Canal & River Trust ownership boundary
© The Canal & River Trust copyright and database rights reserved 2012 © Royal Mail copyright and database rights 2012 Aerial Photo Dobson Locks
Feeder channel output
Marina
Feeder channel pathway
Source: Bing Maps, 2013
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Description What the service is Initial investigations of the ES provided by the Leeds- Liverpool Canal at Apperley Bridge have identified mainly regulating, provisioning and cultural services. The regulating services relate to drainage and water conveyance. Provisioning services relate to water quality. Cultural services encompass recreation and visual amenity.
Why the service exists/ happens The lack of appropriate surface drainage within the public realm pathway network of the new development adjacent to the canal which provides access to the marina, along with the topography of the surrounding area and the lack of appropriate barrier surrounding the marina, suggests that the canal collects most of the surrounding area’s surface water run-off.
The area around Parkin Lane, including part of the canal and surrounding land that is owned by the Trust) is partly designated as an area of extreme flood and is at risk of flooding from the river. It is also highlighted as a Flood Warning Area.
Further to this, the Whitefield Mill feeder channel is located to the east of the marina and provides the Leeds-Liverpool Canal with an intake of water. This illustrates one of the reciprocal relationships that the Trust manages, as the Leeds-Liverpool Canal is both reliant on this feeder channel in times of low water levels but also may help restrict flow to the river when needed. However, there are also many potential water quality issues associated with the feeder channel, including possible introduction of silt and contaminants. The grate in the feeder channel visible from Tenterfields was clogged with debris during visits to the site.
There are several waterfront developments which benefit directly from their position adjacent to the canal and are afforded visual amenity due to their proximity to the waterfront. These developments benefit from the canal setting. Recreation is also provided in this case study area, both on land and water.
The Trust’s role and responsibilities In relation to drainage issues, the Trust are not a drainage authority and therefore do not have to accept water sources being inputted into the canal. Under Clause 100 of the Highways Act 1990, any water inputting into the canal may be subject to a charge.
The Trust has no responsibility relating to water conveyance. The only requirement placed on the Trust in regards to flood protection is that set out in Schedule 7 of the Grant Agreement, which states: “ The percentage of principal culverts and embankments in Class D and Class E, breach of which would cause more than £2,000,000 in damage, shall not rise to or above the relevant thresholds ” and thus refers to the structural integrity of the network.
The Trust’s Charitable Objects outline the Trust’s commitment to “ preserve, protect, operate and manage inland waterways for public benefit: for navigation, walking on towpaths and recreation... “ and “ To further for the public
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benefit the conservation, protection and improvement of the natural environment and landscape of inland waterways ”.
The Trust is a statutory consultee for any major developments within 150m of the canal and minor developments within 50m of the canal. In their consultation responses, the Trust have the opportunity to highlight where contributions, conditions and mitigation is required.
The Trust have a responsibility relating to water quality as set out by the Water Framework Directive, which specifies that artificial water bodies must attain “Good Ecological Potential”. Stakeholders Stakeholders may vary depending on the mechanism identified.
Potential stakeholders identified within this case study in relation to drainage issues of the surrounding built environment are outlined in the flowchart below.
Service Demand The demand for recreational opportunities within this case study location can be considered relatively high, as the towpath within this section of the Leeds-Liverpool Canal forms part of the Aire Valley Towpath Route and National Cycle Network Route 66. Flood/drainage issues are also relevant.
Primary research undertaken during this pilot study suggests that the benefits of the canal, particularly related to property prices, extend to developments beyond the immediate
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waterfront. This is supported by findings from previous research described in the Jacobs study.
It could be argued that there is also a demand for flood alleviation and water conveyance in the area due to its position within a Flood Warning Area. Further to this, due to the lack of appropriate drainage in the built environment in close proximity to the marina, the canal most likely acts as a collection point for the majority of surface water in the surrounding area. Therefore, the demand of this service from the local authority and nearby householders is also a consideration.
Existing costs and/or funding There is no official paid drainage from development into the canal around the Dobson Locks area.
According to an existing s.106 dated January 1993 relating to The Moorings residential development, the developer agreed to “the provision of all necessary footways, verges, street lighting, traffic signals and drainage” in connection with the work on the development site and section of highway referenced in the agreement. This infrastructure seems to have been provided in kind rather than through financial contributions. Consequen ces – additional activity The Trust currently does not charge for any unregulated drainage which occurs in the area. This is most likely because the Trust does not have the resources needed to enforce these charges. If the Trust began to regulate the inputs into the canal in this area, it is likely that there would be improvements to water quality; either by stopping water of questionable quality to enter into the canal, or by recouping the costs needed to fund water treatment.
Further planned development in close proximity to the canal may lead to increased usage of the towpath. This in turn puts increased pressure on the ES of the canal and is also likely to require more management and therefore additional resources from the Trust. Consequences – reduc ed activity In relation to water conveyance, should the Trust not accept inputs into the canal from areas with a current lack of surface water drainage capabilities, the result is likely to be increased localised flooding or water resource issues. Navigation along the canal would likely also be affected if the Trust did not accept these inputs and the water levels of the canal decreased.
Further to this, although the Trust does not regulate the current inputs into the canal, it does undertake many activities which positively affect the quality of the water in the canal, such as pollution control, and rubbish removal. If these Trust activities were reduced, the water quality of the Leeds-Liverpool Canal is likely to worsen. This is likely to affect the River Aire, as the Leeds-Liverpool Canal joins the river near Leeds City Centre.
If the usage of the towpath increases due to new development in the area and the towpath management activities of the Trust are reduced, this may lead to a decline in the condition of the towpaths and general area. This would likely affect the visual amenity afforded by the canal in this area.
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Potential Additional Funding As the ES relate mainly to water resources and water quality, the following list outlines some potential mechanisms where further investigations could be focused:
• S.106 and CIL in relation to new developments and their impacts on the canal • Local authority funding relating to surface water drainage (other potential funding sources for this may include the Highways Agency or developers, depending on the location of the drainage and conveyance issues) • Catchment management funding relating to water quality (may be obtained from the Environment Agency) Willingness to pay? One group of beneficiaries (local residents) were asked to participate in a survey in order to assess opinions of the value and benefits provided by the Leeds- Liverpool Canal and their associated WTP. The results highlight the opinions of some local residents and the results of the survey include: • 89% of respondents could identify at least three benefits they believed were provided by the canal • 100% of respondents agreed that it is important to protect and maintain the canal • 66% of respondents visit the canal often, with a further 32% visiting occasionally • 59% of respondents would be willing to pay for the maintenance or improvement of the canal in some capacity. PES Appraisal This case study illustrates the complex nature of ES and PES in relation to the inland waterway network.
There are several payment mechanisms which may be appropriate to this case study. Most likely, a “Layered” approach to the ES, as outlined in Defra’s PES Best Practice Guide, would be taken in this case study location, as the various ES and associated mechanisms evaluated for this case study are distinct. The suggested mechanisms could then be used to facilitate improvement of targeted services. For example, CIL may be used to address ES relating to recreation and visual amenity, whilst local authority funding may be obtained for the water resources ES provided by the canal.
The use of CIL as a payment mechanism may be applicable to this case study in relation to recreation and visual amenity ES. Bradford Council is currently examining the feasibility and potential use of CIL and at present no decision has been made on whether CIL will be adopted. This provides an opportunity for the Trust to liaise with the LPA regarding relevant infrastructure projects before the production of a charging schedule, should the LPA decide to adopt CIL.
The quality of the water in the Leeds-Liverpool Canal is likely to affect the River Aire, as the two water bodies join to form a section of canalised river near Leeds City Centre. Therefore, if the Trust were to increase the regulation of inputs into the canal then funding for improvements to water quality may potentially be obtained from the Environment Agency through a type of catchment management funding. For example, in the past the Environment Agency has provided funding for dredging to improve water quality in the canalised River Lee Navigation (URS Scott Wilson et al, 2011). 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study VII
Applicability to wider network This case study highlights the need for further research to be undertaken relating to the role of the inland waterway network in relation to flood protection and drainage, water conveyance and water quality.
The mechanisms outlined above may be replicable across the Trust’s network. However, this is dependent on many factors, including the effectiveness of existing surface water drainage in the surrounding area, the hydrological features present nearby, and the other water bodies which are affected by the canal. Recommendations This case study requires additional research before it can be determined whether the payment mechanisms suggested are viable and will secure and improve the ES provided by the canal in this area.
• The relationship between the Leeds-Liverpool Canal and the River Aire within this area should be examined in relation to the role of the canal in flood protection and alleviation • The role that the Leeds-Liverpool Canal plays in collecting the surface water within this area (particularly around the southwest area of the marina ) should be further examined • Unregulated inputs into the canal should be identified, and following identification of these inputs- the Trust should either attempt to stop unregulated inputs, or seek payment for these inputs in order to address associated water quality issues. • Further research into potential mechanisms relating to flood protection and drainage, water conveyance and water quality is needed. These payment mechanisms will most likely involve the Environment Agency or the Local Authority.
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B.2 Case Study 2 Case Study: Pollard Lane (Aire Valley Homes) This case study aims to highlight that the ES provided by the canal which influence the premiums and attractiveness of nearby developments extend beyond the immediate “waterfront” locale. Within this location, the Leeds-Liverpool Canal provides opportunities for land and water based recreation and the canal setting makes a significant contribution to the visual amenity of the area. Beneficiaries include residents of a new development nearby and canal users. Theme Recreation Ecosystem Services
Case Study New housing development located off Pollard Lane, Newlay, Leeds Location Map Location within Pilot Study area
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2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study IX
Canal & River Trust ownership boundary within case study location
Canal & River Trust ownership boundary
© The Canal & River Trust copyright and database rights reserved 2012 © Royal Mail copyright and database rights 2012 Aerial Photo
Housing development near Pollard Lane Leeds-Liverpool Canal
Source: Bing Maps, 2013
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Case study description What the service is The ES provided by the Leeds-Liverpool Canal within this case study location are classified as cultural services, and include recreation and amenity. The Leeds-Liverpool Canal provides opportunities for land and water based recreation. The towpath is well used in this area and provides important linkages to other areas along the canal corridor. The canal setting makes a significant contribution to the visual amenity of the area.
Why the service exists/ happens This new development is located between the River Aire and the Leeds-Liverpool Canal. Phase 1 of the development is complete and a number of houses are currently inhabited. Phase 2 is currently at application stage within the LPA and the status of this application is Pending Consideration. Several documents submitted in support of the planning application reference the proximity to the Leeds-Liverpool Canal and emphasise the canal as a positive local feature. The section of towpath in close proximity to this development (adjacent to the development across Pollard Lane) forms part of the Aire Valley Towpath Route and National Cycle Route 66.
The Trust’s role and responsibilities The Trust is a statutory consultee for any major developments within 150m of the canal and minor developments within 50m of the canal. In their consultation responses, the Trust have the opportunity to highlight where contributions, conditions, and mitigation is required.
In regards to towpaths, the Trust must uphold towpath condition according to the relevant standards set out in the Final Grant Agreement with Defra. Further to this, maintenance of the towpath adheres to certain standards set by the Trust, including the Towpath Mowing Guidelines, which set out a mandatory process for the management of towpath vegetation. The Guidelines take into account the Trust’s responsibility towards user satisfaction, safety and biodiversity.
In regards to recreation and amenity, the Trust has several relevant charitable objects, including: “ To preserve, protect, operate and manage inland waterways for public benefit for navigation, walking on towpaths, and recreation or other leisure-time pursuits ”. Stakeholders Stakeholders may vary depending on the mechanism identified.
The stakeholders which have been identified for this case study are outlined in the flowchart below.
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Service Demand The demand for recreational opportunities within this case study location can be considered relatively high, as the towpath forms part of National Cycle Route 66 and the Aire Valley Towpath Route.
The demand for visual amenity within this case study location can be considered high. Consultation with a sales consultant of the development confirmed that the general location (also including the River Aire and surrounding countryside) is a draw for buyers. Existing costs and/or funding In the past, the Trust has secured contributions for towpath maintenance where new residential developments have led to a significant increase in footfall. However, this approach to securing contributions relating to new development is currently done on an ad hoc basis, there is no specific strategy relating to securing s.106 and CIL funding. Consequences – additional activity The location of the new development off Pollard Lane is likely to lead to an increase in usage of the canal in this area. This is expected mainly for the towpath, relating to footfall and cyclists. As the towpath along this section of the canal forms part of several popular trails, its condition is particularly important. Further to this, the Trust must take care to balance the somewhat conflicting needs of upholding the towpath to a high standard whilst taking care not to damage the habitat and environmental assets in the area.
Increased time and resources for the Trust to manage these through their activities would likely lead to a more positive outcome, even including the impact from the increased footfall of new developments in close proximity to the canal. Consequences – reduced activity Conversely, if the usage of the towpath increases substantially and the towpath and habitat management activities of the Trust are reduced, this is likely to lead to a decline in the condition of the towpaths and general area.
This would have negative consequences for the Trust, as previously mentioned one of the relevant standards within 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study XII
the Grant Agreement with Defra is towpath condition.
A decline in the general towpath condition and management of the area is also likely to affect the ES of visual amenity to which the canal makes a significant contribution in this area.
Potential Additional Funding The potential payment mechanisms appropriate to this case study are similar to those outlined in the Knostrop case study. These include:
Planning obligations (Section 106 agreements)
S.106s are mechanisms for securing planning matters arising from a development proposal. S.106s are used to more closely align development with the environmental and sustainability objectives set out by relevant planning policies. A s.106 forms a legally binding contract between the developer and the LPA.
Community Infrastructure Levy (CIL)
The CIL is a new levy which LPAs in England can charge on new developments in their area. CIL applies to most new buildings and charges are based on the size and type of development. The CIL was introduced in the Planning Act 2008 and set out in the Community Infrastructure Regulations 2010. The CIL is discretionary for LPAs, and LPAs which adopt the CIL must produce a charging schedule which sets out the rates of the levy. Leeds City Council plans to adopt CIL and has produced a list of potential infrastructure projects to be funded through the levy. At present, the Trust has not engaged with the LPA to raise awareness of relevant infrastructure projects which may be funded to CIL and would lead to improvements of the canal. Willingness to pay? Residents are willing to pay a premium for developments in close proximity to the inland waterway network. This is supported by existing studies (Ecotec, 2007; DTZ, 2001, originally cited in Jacobs, 2009) which state that the property premium provided by an inland waterway network does extend beyond the immediate waterfront. One of these studies identified a number of buildings within 50m of the canal (waterfront properties) and those 50-200m from the canal (adjacent to the canal) and reported a property value of 3-5% increase. Another presented uplift ranges of 1.5-5% for residential units within 25-225m of the canal. PES Appraisal The ES in this case study would most likely be packaged to reflect recreation as the primary service. This may take the form of “Recreation +”, in which the opportunity for recreation would be the focus of the payment mechanism and the benefits provided by the secondary ES are to be received by users free of charge. This relates to the “Piggy Backing” approach outlined in Defra’s PES Best Practice Guide, whereby not all of the ES produced from a single habitat are sold to buyers. This approach is recommended because the ES provided by recreation are more likely to be recorded and valued, and therefore can be monitored to adhere to the additionality and conditionality principles of PES.
There may be difficulties in utilising the s.106 payment
2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study XIII
mechanism in this context due to the upcoming changes to the use of these agreements. The introduction of CIL has significant implications for the use of s.106s. From April 2014, CIL will replace the s.106 ‘tariff’ approaches which are currently used for this purpose. S.106s will continue to be used for affordable housing and anything required for the specific development site to make it acceptable in planning terms. Therefore, difficulties arise due to the site specific nature of the amended s.106 agreements within this case study.
The use of CIL as a payment mechanism may be more appropriate in this case study, in which a levy is raised through all new developments and this levy is used to fund infrastructure projects which have been determined by the LPA. There is also a proportion of CIL funds which will be allocated to local communities which may not need to be used on these pre-determined infrastructure projects. Leeds City Council (the relevant LPA for this case study) is adopting the CIL and changes are expected to take place by April 2014 at the latest (although this may now be extended to April 2015 due to planned reforms to CIL). The LPA has produced a draft charging schedule for CIL. Several Green Infrastructure projects have been included in the list of potential CIL funded infrastructure. At present, there are no Trust promoted infrastructure projects included in the Leeds City Council Draft Charging Schedule.
Potential communication issues with the use of CIL mainly relate to communication between the LPA and the Trust. In regards to CIL, initially the Trust may need to highlight specific improvement projects within the local authority area which the general public will benefit from, and lobby the LPA to include these in the list of CIL funded projects. If the funds from CIL which are reserved for local community spending are likely to be used for canal improvements, the Trust and LPA will need to communicate with local residents to ensure that improvements reflect the views of the local residents. Communication or partnership with local wildlife trusts may be beneficial in order to coordinate efforts to obtain CIL funding. Applicability to wider network The case study aimed to highlight that the ES provided by the canal in this location (recreation and visual amenity) extend beyond the immediate “waterfront” locale and benefit residents of nearby developments. This is supported by the existing studies mentioned in the “Willingness to Pay” section of the factsheet.
However, it is worth noting that property premium increases are site specific and depend on many factors. The CIL payment mechanism could potentially be replicated throughout the inland waterways network in different LPAs where planning permission for new developments in close proximity to Trust owned land is being secured, particularly if the canal offers significant recreational or amenity opportunities to the residents of the development. Recommendations This case study can be used to illustrate the potential for s.106 and CIL for developments in close proximity to the inland waterways network, and to highlight that benefits provided by the canal setting and opportunities for recreation extend beyond the waterfront to include developments
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adjacent to the canal. However, additional research will need to be undertaken by the Trust before a PES mechanism can be established. Further research will need to be undertaken to determine:
• The spatial boundaries within which recreation and amenity services due to the canal can be established • It is worth noting that if accurate estimates are required, site specific analysis should be undertaken • A valuation of the ES provided by the canal should be undertaken to determine the level of contribution which may be appropriate to obtain through the s.106 agreement payment mechanism
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B.3 Case Study 3 Case Study: Leeds -Liverpool Canal SSSI A section of the Leeds-Liverpool Canal covering 19.5 hectares has been designated a SSSI, mainly due to its aquatic flora. The SSSI is divided into 7 units, of which 6 have been assessed as “Unfavourable Recovering” and 1 has been assessed as “Favourable” condition. The Trust has a statutory requirement to maintain the condition of the SSSI; however, many of the current barriers to improvement of its condition are related to third party land management. This case study outlines potential mechanisms which may be applied to improve land management practices and in turn improve the condition of the SSSI. Beneficiaries of the ecosystem services within this case study include the local community, third party landowners, canal users, the local authority, and the Trust. Theme Habitat provision/ water quality Ecosystem Services
Case Study Leeds-Liverpool Canal SSSI (Bridge 215 Calverley Swing Bridge to Railway Bridge at Location Armley) Map Location within Pilot Study Area
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2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study XVI
Canal & River Trust ownership boundary within case study location
Canal & River Trust ownership boundary
© The Canal & River Trust copyright and database rights reserved 2012 © Royal Mail copyright and database rights 2012 Aerial Photo Location 1: Agricultural land near Mudge Bank Wood, Calverley This location illustrates an area of poaching by cattle near the offside canal bank. There is also a drainage ditch in this section (highlighted by a red circle in the image to the left) which enters the canal and has ochre discolouration (ECUS Ltd, 2013)
Source: Bing Maps, 2013
Location 2: Agricultural land near Kirkstall Lock, Kirkstall This location highlights a further area along the Leeds-Liverpool Canal SSSI in which poaching occurs- highlighted by a red circle in the image to the left (ECUS Ltd, 2013).
Source: Bing Maps, 2013
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Location 3: Bramley Falls, Bramley This location has been highlighted as an area within the SSSI which has significant shading due to the cover provided by surrounding broadleaved woodland (ECUS Ltd, 2013).
Source: Bing Maps, 2013
Location 4: Gotts Park, Armley This section of the Leeds-Liverpool Canal SSSI has been described as a further area which has significant shading (up to 60% of the channel is shaded in areas of this section) due to broadleaved woodland (ECUS Ltd, 2013)
Source: Bing Maps, 2013
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Description What the service is This section of the Leeds-Liverpool Canal has been designated a SSSI mainly due to its aquatic flora. According to the SSSI citation, “ The Leeds-Liverpool Canal is the best example of a slow flowing fresh-water habitat in the country .” Notable aquatic flora include numerous species of pondweed (one of which is nationally scarce and in decline). The SSSI is divided into 7 units, of which during the most recent assessment, 6 have been assessed as “Unfavourable Recovering” and 1 has been assessed as “Favourable” condition.
Why the service exists/ happens Natural England has designated a section of the Leeds- Liverpool Canal a SSSI. The Leeds-Liverpool Canal was built during the 18th and 19th centuries and therefore has provided a continuous habitat for approximately 150 years. The water quality and biological character of the canal are largely determined by the nature of the water supply and materials used in construction. The canal provides a unique aquatic habitat within West Yorkshire. According to the most recent macrophyte survey, it would appear that several of the target species are in decline or not present in some units of the SSSI.
The Trust’s role and responsibilities The Trust has a statutory requirement to maintain the SSSI condition. Improvement in the condition of SSSIs is also relevant to the Trust’s strategic priorities. SSSI condition for all of the Trust’s designated sites is being monitored as an indicator for wildlife and reported in the annual State of the Environment Report. According to the Trust’s Environmental Strategy Paper for Trustees “ If these (SSSIs) are not assessed by the regulator as being in Favourable Condition, we (CRT) should be doing all we can do improve them”.
Schedule 5: Publication Data within the Final Grant Agreement with Defra also notes “ the percentage area of SSSIs under CRT management in good or recovering condition ”.
Relevant charitable objectives for this case study include “ To further for the public benefit the conservation, protection and improvement of the natural environment and landscape of inland waterways ”. Stakeholders Stakeholders may vary depending on the mechanism identified.
The stakeholders which have been identified for this case study are outlined in the flowchart below.
Environmental Stewardship Payment Mechanisms
2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study XIX
Woodland Grant Scheme Payment Mechanisms
Service Demand The demand for habitat restoration within this case study location can be considered relatively high, as improvement to the condition of the SSSI is considered by both Natural England and the Trust to be a priority.
A SSSI unit is assessed by Natural England as being in Favourable condition when “ the SSSI is being adequately conserved and is meeting its conservation objectives ”. The Trust has outlined the improvement of SSSI condition as an environmental priority; wildlife corridors (including habitats, species and connectivity) are considered one of the key environmental issues within the Trust.
Further to this, the environment along the canal network generates public support. In a market research study, “a haven for wildlife ” was rated as the 2 nd highest response when participants were asked what they would miss most if the inland waterways were lost. Existing costs and/or funding The Trust does not currently receive any funding for the management of the SSSI. Consequences – additional activity The condition of the SSSI is likely to improve if third party 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study XX
land practices, such as poaching and drainage discharges, are managed. A tree management plan implemented in Units 4 and 7, as outlined in the SSSI Site Management Statement (Natural England and British Waterways, 2012), will reduce shading of the canal and improve its condition. Consequence s – reduced activity Potential consequences of reducing land management activity along the SSSI includes decline in SSSI condition. There are no aquatic invasive species at present in the SSSI; however, if invasive species management were to be reduced this status may change. Potential Additional Funding The potential payment mechanisms appropriate to this case study are outlined below.
Environmental Stewardship
Entry Level Stewardship (ELS) is the basic underlying agri- environment scheme that provides funding to land managers in return for more effective environmental management. ELS provides a straightforward approach to environmental management. The aims of ELS are to conserve wildlife, enhance landscape quality, protect the historic environment, protect natural resources by improving water quality and reducing soil erosion, and responding to climate change (Natural England, 2013).
English Woodland Grant Scheme (EWGS)
EWGS provides funding for woodland and is part of the Defra family of environmental support. Potential relevant grants within this scheme include the Woodland Management Grant (to aid in the sustainable management of woodland), the Woodland Improvement Grant (which relates to woodland SSSIs) or the Woodland Assessment Grant (which may be used to create a woodland management plan). Willingness to pay? Through the Project Board, discussions with a representative of Natural England were undertaken. The outcome of these discussions suggest that Environmental Stewardship is a viable potential payment mechanism, particularly in relation to third party land owners. The Stewardship programme may be more applicable to the Trust now that it is a charitable trust. The need to communicate options with third party landowners in order to raise awareness of the Environmental Stewardship funding which may be available was highlighted as a potential communication issue. PES Appraisal There are several payment mechanisms which may be appropriate to this case study. Most likely, a “Layered” approach to the ES, as outlined in Defra’s PES Best Practice Guide, would be taken in this case study location. The suggested mechanism could then be used to facilitate improvement of a targeted service.
Entry Level Stewardship may be an appropriate payment mechanism for those third party landowners whose management practices impact on water quality and habitat along the Leeds-Liverpool Canal SSSI through nutrient discharge and poaching. Environmental stewardship is one of the more widely accepted PES-like schemes. As outlined in the ELS Environmental Stewardship Handbook (Natural England, 2013), the category most relevant to third party
2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study XXI
landowners along the Leeds-Liverpool Canal SSSI is “Managing your Land for Cleaner Water and Healthier Soil”, of which the potential actions and options include: • Protect the water body • Fence watercourses to prevent livestock from contaminating and eroding river banks • Create buffer strips to slow, filter and trap pollutants before they enter watercourses Specific option codes which may be relevant to this case study include EE10 (6m buffer strips on intensive grassland next to a watercourse) and for areas with existing fencing which needs improvement EJ11 (Maintenance of watercourse fencing).
For habitat improvements which are not eligible for ELS, such as woodland management on Local Authority owned land to control shading as highlighted above in Location 3 and 4, the English Woodland Grant Scheme (EWGS) may be a potential mechanism.
The use of ELS to improve third party land management would most likely have the Trust move from the role of seller to that of intermediary within this case study. As highlighted by the Pumlumon Project PES Pilot study, land owners are more willing to participate in ELS schemes if they are guided through the process and receive help from an intermediary. There is no application process for Conservation and Enhancement Scheme funding, as Natural England targets and approaches specific land managers. Therefore, communication with NE is necessary to determine whether this is an appropriate form of funding.
Discussion with a representative of Natural England at the Project Board meeting in June supported ELS funding as a potential PES payment mechanism and as an effective way to improve third party land management practices.
Further discussions with Defra at the final Project Board meeting suggested that agri-environment grant schemes are less appropriate in areas with statutory designations as Natural England has the potential to enforce suitable land management activities in these areas. However, this mechanism would be appropriate in other areas where biodiversity is negatively affected by land management practices, but there is no statutory designation in place. Applicability to wider networ k The Trust manages 1000 locally recognised sites of importance for nature conservation (65 of these are legally protected wildlife sites- including 18 internationally important sites). The potential mechanisms identified could be adopted elsewhere where sites are of high biodiversity value, but have no statutory designation. Recommendations This case study highlights the importance of effective third party land management practices in relation to the condition of the habitat and water quality of the inland waterway system. Payment mechanisms which may be available to third parties to improve land management are outlined. Suggested additional research to under undertaken in order to further investigate this issue include:
• Further discussion with Forestry Commission and Natural England needed to investigate viability of 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study XXII
mechanisms • Discussion with Local Authority needed to determine existing woodland management and possibility of introducing rotational coppicing along a buffer zone adjacent to the canal.
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B.4 Case Study 4 Case Study: Knostrop Cut The Trust own a relatively large proportion of the land in the immediate vicinity of Knostrop Cut, and the primary ES provided by the canal in this area include recreation, habitat provision and flood protection. This case study illustrates the potential for obtaining monies through the planning system for development in close proximity to the inland waterways network. Beneficiaries of the ES within this case study include the local community, visitors using the Trans Pennine Trail and other popular trails which follow the towpath, the developer and the residents of the waterfront development. Theme Biodiversity/ Amenity/ Water Resources/Water Quality Ecosystem Services
Case Study Knostrop Cut (located between the canalised section of the River Aire and the Aire Location and Calder Navigation) Map Location within Pilot Study area
© The Canal & River Trust copyright and database rights reserved 2012 © Ordnance Survey Crown copyright. All rights reserved 2012
Canal & River Trust ownership boundary within case study location
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Canal & River Trust ownership boundary
© The Canal & River Trust copyright and database rights reserved 2012 © Royal Mail copyright and database rights 2012 Aerial Photo
Source: Bing Maps, 2013
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Descriptio n What the service is There are several ES which are provided by the canal within this location. These include: flood protection of the industrial land to the S of Knostrop Cut between the canal-side and A639 Low Road, habitat provision with areas of aquatic marginal vegetation and scrub, and land based recreation along the towpath. Recreation is considered to be the primary ecosystem service provided within this case study.
Why the service exists/ The Trust owns a relatively large proportion of the land in the happens immediate vicinity of Knostrop Cut, including the embankment between the Cut and River Aire, industrial land to the north of the Cut between the canal and Thwaite Gate Road and the land which is currently occupied by Thwaite Mills Museum. The embankment provides flood protection from the River Aire for the surrounding area, which is largely classed as Functional Floodplain or High Probability Zones according to the Leeds Strategic Flood Risk Assessment (Leeds City Council, 2007). In addition, at times of high water levels and potential flooding the Trust manages its lock system to prevent the River Aire from flooding in Leeds City Centre.
The habitat of the area was assessed in 2003 (presented as an Appendix within the Leeds City Council Biodiversity and Waterfront Development SPD, 2006) and 2008 (presented in an otter survey and habitat assessment produced by Thomson Ecology for the Environment Agency, 2008). Within both assessments the habitat surrounding Knostrop Cut was identified as being an important feature to retain. The towpath along the embankment is well maintained and The Trust’s role and forms part of the Trans Pennine Trail. responsibilities Towpath condition is one of the relevant standards which the Trust must uphold according to the Grant Agreement with Defra. The Grant Agreement states that the percentage of towpaths at condition A, B or C must not fall to or below the relevant thresholds of 60% (warning threshold) or 50% (breach threshold).
Further to this, the Trust’s Charitable Objects outline the Trust’s commitment to “ preserve, protect, operate and manage inland waterways for public benefit: for navigation, walking on towpaths and recreation... “ and “ To further for the public benefit the conservation, protection and improvement of the natural environment and landscape of inland waterways ”.
Maintenance of the towpath also adheres to certain standards set by the Trust, including the Towpath Mowing Guidelines, which set out a mandatory process for the management of towpath vegetation. The Guidelines take into account the Trust’s responsibility towards user satisfaction, safety and biodiversity.
The Trust is required to manage potential flooding from its own assets (i.e. canals), but in this case it is providing a flood risk management function for the River Aire.
The Trust is a statutory consultee for any major developments within 150m of the canal and minor developments within 50m of the canal. In their consultation responses, the Trust has the opportunity to highlight where contributions, conditions and mitigation is required. Stakeholders Stakeholders may vary depending on the mechanism identified. The stakeholders which have been identified for this case study are outlined in the flowchart below.
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Service Demand The demand for recreational opportunities within this case study location can be considered relatively high, as the towpath forms part of the Trans Pennine Trail.
There is a residential-led development located on Yarn Street on the Hunslet waterfront, in close proximity to Knostrop Cut. The development, known as H2010, is a result of collaboration between many partner organisations. H2010 is one of the Leeds Urban Eco Settlements. Construction is ongoing at this development, although Phase 1 and 2 are complete. The Planning Statement obtained from the LPA’s Public Access website highlights the benefits of the canal, relating to both connectivity and biodiversity. Landscape phasing plans for the development suggest that a new area of mooring is being proposed in close proximity to an area of marginal aquatic vegetation and as such is likely to have an impact on the existing habitat.
Knostrop Cut is due to be removed as part of the Leeds Flood Alleviation Scheme which is due to commence in 2014. As such it was difficult to obtain stakeholder views on the flood risk management benefits currently provided by the Trust in this area Existing costs and/or There is a s.106 which exists between the developer, Miller Homes, funding and Leeds City Council. In the agreement, it states that Miller Homes will make a contribution to greenspace of £399,639; however, none of the funding was specifically ring-fenced for canal related activity. Consequences – Development along the waterfront adjacent to the canal is likely to additional activity lead to increased usage of the canal and its towpath. This increased usage puts more pressure on the ES of the canal and also requires the Trust to carefully balance management activities relating to both recreation and habitat provision. This in turn is likely to require further resources from the Trust.
Also, the existing area of aquatic marginal vegetation is currently providing an important habitat. A previous habitat assessment suggests that water voles may be present in the area (Leeds City Council, 2006). Additional activity in the surrounding area (both on land and water) is likely to have an impact on existing habitat. Similarly, increased management of these important areas of habitat 2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study XXVII
within an urban environment may have a beneficial effect on the biodiversity of the area.
Consequences – reduced Reduced Trust activity relating to habitat provision within this case activity study location may lead to partial loss of the area of aquatic marginal vegetation and areas of scrub, as the likely increased footfall associated with the development may impact the surrounding habitat.
Reduced management activity relating to the towpath itself may affect user enjoyment (for example residents of the development and people using the towpath for recreational purposes). Reduced maintenance may also have a negative effect on the visual amenity of the area. Potential Additional The potential payment mechanisms appropriate to this case study are Funding outlined below:
Planning obligations (Section 106 agreements)
S.106s are mechanisms for securing planning matters arising from a development proposal. S.106s are used to more closely align development with the environmental and sustainability objectives set out by relevant planning policies. A s.106 forms a legally binding contract between the developer and the LPA.
Community Infrastructure Levy (CIL)
The CIL is a new levy which LPAs in England can charge on new developments in their area. CIL applies to most new buildings and charges are based on the size and type of development. The CIL was introduced in the Planning Act 2008 and set out in the Community Infrastructure Regulations 2010. The CIL is discretionary for LPAs, and LPAs which adopt the CIL must produce a charging schedule which sets out the rates of the levy. Leeds City Council plans to adopt CIL and has produced a list of potential infrastructure projects to be funded through the levy. At present, the Trust has not engaged with the LPA to raise awareness of relevant infrastructure projects which may be funded to CIL and would lead to improvements of the canal. Willingness to pay? The Trust has not received funding for maintenance or improvement of the towpath and other canal infrastructure along Knostrop Cut from any of the beneficiary groups mentioned above.
The Trust included a request in its consultation response to the Miller Homes development for funding for a waterfront walkway and infrastructure upgrades. This was not included in the final s.106 agreement, demonstrating a lack of willingness to pay. PES Appraisal The ES in this case study would most likely be packaged with recreation and habitat provision as the primary services. In this way, the “Bundling” approach outlined in Defra’s PES Best Practice Guide is recommended. The payment mechanisms outlined above could be used to facilitate improvement of all E within the area.
The existence of a s.106 relating to the H2010 development suggests that this mechanism may have been viable for this case study and represents a missed opportunity. According to the Justification for the Community Infrastructure Levy report produced by Leeds City Council (Leeds City Council, 2013), £6,568,051.00 in funds were raised through planning obligations between April 2010 and March 2012, of which £1,733,625.00 were allocated to Green Space Provision.
The Trust has secured contributions relating to new development in the past, including funding for towpath maintenance where new residential developments have led to a significant increase in footfall
2012s6507 Payment for Ecosystem Services Canal and River Trust Pilot Study XXVIII
and funding for a new swing bridge due to the increase in traffic arising from the development. However, this approach to securing contributions relating to new development is done on an ad hoc basis. Developers are not legally required to implement mitigation measures unless required by the LPA. There is no specific strategy relating to securing s.106s and CIL funding.
Again, there may be potential complications with this approach due to the upcoming change in planning legislation relating to s.106s and the CIL. Leeds City Council is adopting the CIL and changes are expected to take place by April 2014 at the latest (may now be extended to April 2015 due to planned reforms to CIL). From April 2014, CIL will replace the s.106 ‘tariff’ approaches which are currently used for this purpose. S.106s will continue to be used for affordable housing and anything required for the specific development site to make it acceptable in planning terms. This could include local site- related transport improvements, site related flood risk solutions and provision of on-site greenspace for larger sites. Therefore, s.106s may still be used in situations where site specific mitigation is needed, which could include improvements to the canal for waterfront developments.
CIL funding has been highlighted as another potential payment mechanism for the ecosystem services provided by the canal. Leeds City Council has produced a draft charging schedule for CIL. Several Green Infrastructure projects have been included in the list of potential CIL funded infrastructure. This highlights the potential for improvements to the canal and adjacent green space to be made through CIL funding. At present, there are no canal related or Trust promoted infrastructure projects included in the Leeds City Council Draft Charging Schedule.
Potential communication issues with the use of CIL and s.106s mainly relate to communication between the LPA and the Trust. In regards to CIL, initially the Trust may need to highlight specific improvement projects within the local authority area which the general public will benefit from, and lobby the LPA to include these in the list of CIL funded projects. If the funds from CIL which are reserved for local spending are being used for canal improvements, the Trust/LPA will probably need to undertake consultation with local residents. For s.106 mechanisms, communication between the developers and the LPA will be required. The need for contributions from s.106s should be outlined and reinforced in statutory consultee responses. The Trust is keen to get involved in pre-application discussions with developers to ensure that any impacts on the canal are taken into account early on and mitigated against via conditions or s.106s. Applicability to wider The s.106/CIL mechanisms could potentially be replicated throughout network the inland waterways network in different local authorities, where planning permission for new developments in close proximity or adjacent to Trust owned land is being secured, particularly if the development is likely to have an impact on canal features.
Whilst the flood risk management function of the canal was not investigated in detail at this site due to the focus on the development of the Flood Alleviation Scheme which will involve the removal of Knostrop Cut, Recommendations This case study can be used to illustrate the potential for s.106 and CIL for developments in close proximity, or adjacent to, the inland waterways network. It highlights the current use of s.106s in relation to Green Space provision and the opportunities related to this source of funding. Suggested additional research to be undertaken by the
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Trust in order to secure this PES mechanism include:
• Discussion with LPA needed to investigate viability of mechanisms • Potential infrastructure projects identified and brought to LPA for incorporation into list of CIL funded infrastructure projects • Towpath user statistics may need to be obtained (to provide evidence of recreational use of towpaths and establish baseline)
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Bibliography Ecosystem Services Millennium Ecosystem Assessment (2005) Millennium Ecosystem Assessment . Island Press, Washington. TEEB (2010) The Economics of Ecosystems and Biodiversity: Mainstreaming the Economics of Nature: A synthesis of the approach, conclusions and recommendations of TEEB . TEEB, Malta. UK National Ecosystem Assessment (2011) The UK National Ecosystem Assessment: Synthesis of Key Findings . UNEP-WCMC, Cambridge. UK National Ecosystem Assessment (2011) The UK National Ecosystem Assessment: Technical Report . UNEP-WCMC, Cambridge. Payment for Ecosystem Services Defra (2013) Developing the potential for Payments for Ecosystem Services: an Action Plan . Defra, London. Dunn, H. (2011) Defra Evidence and Analysis Series: Paper 4. Payments for Ecosystem Services . Defra, London. OECD (2010) Paying for Biodiversity: enhancing the cost-effectiveness of payments for ecosystem services . OECD, Paris. Rural Economy and Land Use Programme (2012) Enhancing the environment through payment for ecosystem services: Does payment for ecosystem services offer a new opportunity for natural resources management and how can it work in practice? RELU, Newcastle University, Newcastle. Smith, S., Rowcroft, P., Everard, M., Couldrick, L., Reed, M., Rogers, H., Quick, T., Eves, C. and White, c. (2013) Payments for Ecosystem Services: A Best Practice Guide . Defra, London. URS Scott Wilson, The James Hutton Institute and University of Aberdeen (2011) Barriers and Opportunities to the Use of Payments for Ecosystem Services. Final Report for Defra . URS Scott Wilson, London. Canal and River Trust British Waterways (2007) BW Direction: Towpath Mowing Guidelines [Internal document]. British Waterways. Canal & River Trust (2012a) Environment Briefing for Trustees [Internal document]. Peter Birch, Group Environmental Manager. Canal & River Trust (2012b) Shaping our Future: Strategic Priorities . Canal and River Trust, Milton Keynes. Canal & River Trust (2013) Trustee’s Report and Accounts for the period 12 October 2011 to 31 March 2013 . [Online]. Available from:< http://canalrivertrust.org.uk/media/library/3684.pdf > [Last accessed 02/08/2013]. Jacobs (2009) The Benefits of Inland Waterways in England and Wales: A report for Defra and the Inland Waterways Advisory Council . Jacobs. Policy Defra (2011) The Natural Choice: Securing the value of nature. HMSO, London. (Natural Environment White Paper, CM8082). Planning Leeds City Council (2006) Biodiversity and Waterfront Development: Leeds Local Development Framework Supplementary Planning Document . Leeds City Council, Leeds. Leeds City Council (2007) Strategic Flood Risk Assessment . Leeds Local Development Framework , Development Plan Document . Leeds City Council, Leeds.
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Leeds City Council (2013a) Community Infrastructure Levy: Leeds Local Development Framework Preliminary Draft Charging Schedule . Leeds City Council, Leeds. Leeds City Council (2013b) Infrastructure Funding Gap: Justification for the Leeds CIL- Appendix 3. Leeds City Council, Leeds. Payment Mechanisms Department for Communities and Local Government (2006 ) Planning Obligations: Practice Guide . DCLG, London. Forestry Commission England (2012) English Woodland Grant Scheme: General Guide to EWGS . Forestry Commission England, Bristol. Natural England (2013) Entry Level Stewardship: Environmental Stewardship Handbook . 4th ed. Natural England. ODPM (2005) ODPM Circular 05/2005 Planning Obligations . HMSO, London. Planning Officers Society (2011) Section 106 Obligations and the Community Infrastructure Levy: An advice note . The Planning Officers Society, London. Rhodes, J. (2013) Learning from RSPB experiences with payments for ecosystem services : Poole Harbour Pilot Study, RSPB presentation at Ecosystems Knowledge Network PES Workshop, Bristol. Macgillivray, A. (2013) Learning from a payments for ecosystem services pilot in an urban setting: North Hull PES Pilot Study , Ursus Consulting presentation at Ecosystems Knowledge Network PES Workshop, Bristol. Leeds-Liverpool Canal British Waterways and Natural England (2012) Leeds-Liverpool Canal Site of Special Scientific Interest: Site Management Statement. Natural England, Leeds. ECUS Ltd. (2013) Leeds-Liverpool Canal SSSI Macrophyte Survey for Natural England . Ecus Ltd., Sheffield. Natural England (n.d.) Leeds-Liverpool Canal SSSI Citation [Online]. Natural England, Sheffield. Available from: http://www.sssi.naturalengland.org.uk/citation/citation_photo/1004146.pdf . [Last Accessed 29/07/2013]. Thomson Ecology (2008) Otter survey and habitat assessment: River Aire and Leeds-Liverpool Canal, Calverley Bridge to Leeds City Centre. Volume 1 Report for Environment Agency . Thomson Ecology, Otley.
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