"Steve Haywood" <[EMAIL PROTECTED]> wrote: >On 26/05/07, Adrian Stott <[EMAIL PROTECTED]> wrote: >> >> You appear to be assuming NINA will have enough money to run properly >> all its waterways, and any others it will take on. Since that has >> never been the case for BW (or EA), I think that position is, er, >> courageous (Minister). Unless NINA has enough secure long-term >> funding to cover not only its current responsibilities once it is >> operational, but also those of each waterway it takes on subsequently, >> it (and the waterways) will experience exactly the problems we see >> today. > >What I cannot understand Adrian, is why you think that your idea of 'ring >fencing' BW property assets as a form of future income is any more reliable >than Mike's idea of a guaranteed five year financial settlement?
My suggestion of ring-fencing was not to do with reliability of income, but to address Mike's concern about internal conflict of interest within BW. Actually, having worked in an organisation which manages its real estate in a way analogous to what I'm suggesting, I think that Mike's concern won't be a problem even without ring-fencing, but if it would keep him happy .... > The fact is, government funding in any form is never secure. Whatever is > promised in >the short term alters to accommodate changed circumstances. This is as >evident as the sun rising. Equally evident to my mind is that given the >pressures of health, education etc, no government will keep its hands off a >£1 billion property portfolio for long; and indeed, it is quite clear that >Brown is eyeing it up even as we speak. Well, first of all, your last sentence. No, he isn't. AIUI, this whole thing is speculation and misunderstanding trumped up by certain newspapers. BW is indeed undertaking a study into overall funding approaches, looking at *all* options including, I guess, privatisation and being stripped of all its real estate. However, I will be most surprised (and very saddened) if either of these two ends up being recommended, because I think BW's current structure as a state-owned company is exactly the right one. We know that the waterways need some form of government financial support, because they cannot keep themselves alive any more only through charges on their users. We have a good idea now how much per year that support needs to be (BW's "steady state" calculations) if the waterways are not to decline. So, the main question remaining here is how to provide that annual revenue, reliably every year. Government grant won't do. It can be (and is being) changed (i.e. cut) almost every year as a result of political whim. This doesn't cause the waterways to die overnight, but it does make them ill with a progressive disease. A multi-year "service" contract with government is no good either. Even if government would sign one (which it almost certainly won't), there would be no way of enforcing it. BW pursued this approach with vigour, but has now given it up for just these reasons. So the approach I come to is a bigger real estate endowment, the revenue from which BW can spend on the waterways. Yes, of course the government could confiscate the property portfolio at any time. However, I think it would be very unlikely to do so, not least because the year that it does so it would have to bump up BW's grant enormously to compensate, and that would show up very visibly as extra government spending. That isn't a guarantee, just an approach with better odds. >BW cannot be run as a business any more than a local authority can run its >parks and gardens entirely for profit. But the LA could. Look at swimming pools as an easier example. They are almost all run by LAs. The charges for them are way below what is needed to produce the revenue required to run (and periodically upgrade or replace) them. As a result, they usually struggle for money, in competition with all the other demands on the very limited LA purse. And, as a result, of the charges being kept so low, no private operator can economically open a commercial pool. Parks and gardens? Tussauds seems to do OK with Warwick Castle, etc. But, yes, for some it is not feasible to charge each beneficiary (like towpath walkers), so they are partially supported by (usually) local taxation. >The function of the waterways, like that of parks and gardens, is largely to >fulfil a >social purpose and this implies largely social funding. I think that the "social funding " should cover only the gap between revenue that can be achieved from charging users and the amount needed to keep the network going. >Sadly, like all social funding this'll have to be justified on an annual >basis. Which is very damaging for management of long-term assets like waterways. Which is why the approach we now have (which is roughly what you are suggesting) has to be changed, if we want the waterways to be healthy from now on. Adrian Adrian Stott 07956-299966
