Department for Environment, Food & Rural Affairs

The Government's Response to the Environment, Transport
and Regional Affairs Committee's Report

Inland Waterways

Introduction

1. This Memorandum is the Government's response to the Environment, Transport and Regional Affairs Committee's Report on Inland Waterways. It reflects the views of the National Assembly for Wales.

2. The Government welcomes the Committee's Report which deals with important issues concerning the inland waterways. The Government agrees with many of the Committee's conclusions and will take them fully into account in developing its policies for the waterways as described in Waterways for Tomorrow.

3. The Committee's recommendations and the Government's response to each of them are as follows.

Freight

There is considerable potential to increase freight carried on selected inland waterways, but the difficulties are such that a switch will not be achieved unless the Government is prepared to offer more encouragement and investment (paragraph 17).

4. We agree that there is the potential to increase the amount of freight carried on certain inland waterways. The Freight Study Group which we set up last year is currently investigating the freight-carrying potential of the inland waterways generally and will be considering the steps needed to bring about an increase in this traffic. The Study Group will be submitting its report at the end of the year and we will consider the steps we should take to encourage an increase in freight transport in the light of its recommendations.

We recommend that Freight Facilities Grants be extended to assist navigation authorities in providing and improving the waterway 'track' and associated facilities, and to offer financial support to freight operators in modernising their fleets. We further recommend:

a) the abolition of tolls for freight craft and their replacement with an annual licence fee (with different tariffs for regular users and occasional users);

b) that the planning system should promote the use of appropriate waterside sites by industry to encourage supplies and products to be transported by water;

c) that development plans recognise wharves and associated infrastructure as strategic assets and provide greater protection against development of such sites for alternative uses, and that where such sites are lost to development, the authority should oblige the developer to provide equivalent wharf facilities elsewhere; and

d) that a one stop shop inquiry service for freight operators be established to address their concerns about lack of co-ordination between navigation authorities and provide immediate access to practical information including waterway closures, depths, flood or drought conditions. Such a service could be run by the Association of Inland Navigation Authorities (paragraph 17).

5. We accept that it is desirable to extend the Freight Facilities Grant (FFG) scheme to encourage freight carrying on the inland waterways. It is already possible for FFG to be paid towards capital costs incurred by navigation authorities in providing and improving inland waterways to cater for specific freight to be removed from road. Similarly, FFG can be paid to freight operators to modernise vessels. Now, under the Transport Act 2000 we have the power to extend the scheme to the carriage of goods by sea and to allow grant to be paid on a wider range of costs.

6. We intend to extend the existing FFG scheme to secure and encourage the carriage of goods by sea. This will widen the availability of grant to many more authorities and operators, provided there are clear and quantifiable environmental benefits arising from their proposals. Pending, and subject to EC clearance, we are already examining several applications for grant on facilities required for coastal movements in preference to road transport.

7. We will also, in liaison with the Scottish Executive and the National Assembly for Wales, be consulting the waterways and shipping industry on the form of a non-capital grant scheme which might include revenue expenditure incurred by navigation authorities in connection with the maintenance of the waterway "track". Any such scheme will need to comply fully with EC state aid and competition rules.

8. We will of course take in account the views of the Freight Study Group in framing these proposals.

9. The Freight Study Group is looking into the question whether it would be feasible to abolish the current system of tolls in favour of a simpler regime such as the licensing of vessels. A number of important considerations need to be taken into account, for example the loss of income which might result and the possibility that the statutory powers of some navigation authorities might need to be amended.

10. PPG13 Transport, published in March 2001, seeks to support the use of waterways by industry. The guidance (paragraph 45) calls on local authorities to

11. PPG12 Development Plans seeks to protect wharves and related infrastructure, where appropriate, from being developed for alternative use. It notes that local authorities may wish to safeguard sites for transport related development which might otherwise be lost to other development, such as wharves alongside waterways and ports (paragraph 5.23).

12. PPG13 and PPG12 also set out general policies for identifying and protecting waterway infrastructure, where appropriate (PPG13, paragraph 45; PPG12, paragraph 23). PPG13 asks local authorities to seek to re-use disused wharves and basins and to retain boatyards and other services used in connection with water-based recreation (paragraph 12, Annex B).

13. Planning guidance does not oblige developers to provide equivalent wharf facilities elsewhere where such sites are lost to development. It is for a local planning authority to decide whether to impose any requirements on a developer when granting planning permission, for example through planning conditions or obligations. It is a principle of the planning system that each case is determined on its own merits. In general, national planning policy guidance does not oblige developers to provide equivalent facilities elsewhere where sites are lost to a particular type of development.

14. We agree that it would be desirable to improve access to waterways information and the Freight Study Group is considering how this might best be tackled, including whether AINA could take on the role.

Urban regeneration

We recommend that local authorities safeguard and promote public access to the waterfront in new developments (paragraph 24).

15. Planning guidance does not specifically protect or require public access to the waterfront of new development. However, PPG13 encourages safe and easy access to development by walking (paragraphs 19 and 23) and more direct, safe and secure walking routes (paragraph 76); and encourages pedestrian routes along river banks and canal towpaths to be highly visible and integrated with other activities, in order to maximise pedestrian safety and security (paragraph 77).

16. The draft revision of PPG17 (which deals with sport, open space and recreation), issued for consultation in March 2001, encourages authorities to look for opportunities to provide additional rights of way, and to make best use of water features both for recreation and as amenities (paragraphs 52 and 53).

We recommend that historic buildings by waterways should be carefully conserved and substantial alteration of exteriors avoided if these buildings are to play their full role in regeneration. British Waterways and other owners of such properties should liaise formally with English Heritage and the Department of Culture, Media and Sport on good practice. The good practice guide being prepared by the Inland Waterways Amenity Advisory Council on behalf of the Department of the Environment, Transport and the Regions should address this issue. We also commend the development of historic buildings by the waterside as a particularly appropriate vehicle for lottery funding (paragraph 25).

17. We agree that it is necessary carefully to conserve historic buildings beside the waterways and to ensure they are used in a sympathetic way to contribute to regeneration. British Waterways is in regular contact with English Heritage's Government Historic Buildings Advisory Unit, and the Agency's Industrial Archaeology Advisory Panel about conservation issues, listed buildings and scheduled monuments.

18. The good practice guide being prepared by the Inland Waterways Amenity Advisory Council (IWAAC) will draw out the role which the historic environment can play in the regeneration of the waterways, noting the relevance of the planning process and identifying sources of funding which will help to achieve desirable outcomes. We agree that the conservation and reuse of historic waterside buildings is, in principle, an appropriate vehicle for lottery funding.

Urban and rural regeneration should be one of British Waterways' top priorities. Not only should the organisation have greater flexibility to undertake improvements along all waterways, but it should actively be encouraged by legislation to do so. We therefore recommend that the Government introduce a duty on British Waterways to facilitate urban regeneration (paragraph 28).

19. We accept that urban and rural regeneration should be one of British Waterways' top priorities, and commend its success in this field. However we are not persuaded that British Waterways needs to be given a statutory duty to facilitate regeneration since paragraph 1 of the Framework Document which sets out the Government's aims for British Waterways specifically requires it to carry out its statutory responsibilities in such a way as to promote regeneration. Waterways for Tomorrow emphasises the important contribution the inland waterways make to regeneration and the Government therefore looks to all navigation authorities to maximise the use of their waterways for this purpose.

We recommend that British Waterways exercise more discretion in applying Treasury Guidelines to its project appraisals and that it formally adopt a policy whereby specified rates of return are applied more flexibly to heritage and other projects in the public good (paragraph 29).

20. British Waterways has already adopted a policy to take account of the wider public good in appraising projects, as enjoined to do under its Framework Document which requires it to promote and accommodate conservation and regeneration. See paragraphs 21 and 22 below.

We consider it important that Government policy in respect of historic buildings is not sidelined and therefore recommend that British Waterways' Financial Memorandum be revised, in consultation with HM Treasury, to include a reference to the DCMS guidance as well as Treasury guidelines (paragraph 30).

21. Government policy in respect of historic buildings is not being sidelined. British Waterways' Financial Memorandum already recognises its responsibility to promote wider public benefits, and Government Accounting rules already refer to DCMS guidance on the disposal of historic buildings. However, a specific reference to the DCMS guidance will be incorporated in the Financial Memorandum when it is next revised. The guidance notes that the maximisation of receipts should not be the overriding objective in heritage disposals. The aim should be to obtain the best return for the taxpayer that is consistent with Government policy for historic buildings and archeology (as set out in PPG15 and PPG16) including non-financial and wider regeneration benefits.

We recommend that the Treasury communicate to British Waterways and other bodies that the standard rate of return of 8 per cent does not have to be achieved by those projects where other significant wider public benefits, including the conservation of heritage buildings, will accrue (paragraph 30).

22. Treasury rules already provide guidance on this subject, as described in paragraph 21 above. Projects have a hurdle rate of return according to their purpose. No less than 8 per cent should normally be expected for commercial projects, subject to consideration of wider public benefits, and no less than 6% for operational projects.

We recommend that British Waterways be allowed to raise capital on the commercial markets to finance acquisitions and developments with a medium to long term probability of reducing annual revenue funding through DETR. Such borrowing should be subject to Ministerial approval for loans above a designated threshold, as is the case for borrowing by the Post Office (paragraph 31).

23. Private sector capital is normally more expensive than finance raised directly by Government. Therefore, on value for money grounds, borrowing should normally be transacted through the National Loans Fund. British Waterways is also taking forward PPPs which will give it access to extra private sector finance.

Environment

The maintenance of high environmental standards and the promotion of nature conservation in and along waterways must be an important priority. We recommend that nature conservation priorities should be formally designed into restoration projects at an early stage. British Waterways and the Environment Agency have developed new techniques for bank protection which avoid hard edges, and encourage biodiversity: these should be applied both to canal restoration works and to sections of canal inappropriately treated in the past. These approaches should be agreed with English Nature, and where possible applied on independent navigations. We also recommend that the granting of lottery and other funding for canal restoration schemes should be conditional on adequate safeguards being built in at project planning stage to protect and enhance biodiversity (paragraph 35).

24. We agree that it is important to maintain high environmental standards on the waterways and to promote nature conservation. The public navigation authorities (British Waterways, the Environment Agency and the Broads Authority) are all statutorily obliged to have regard to these matters and are actively promoting measures which encourage biodiversity. AINA is currently preparing an environmental management framework to encourage best practice among the independent authorities.

25. Navigation authorities would be likely to be regarded as public bodies for the purposes of the Wildlife and Countryside Act 1981 (as amended by the Countryside and Rights of Way Act 2000), and competent authorities for the purposes of the Conservation (Natural Habitats, &c.) Regulations 1994. As such they have a statutory duty to conserve and enhance SSSIs and to have regard to the requirements of the Habitats Directive in relation to SACs and SPAs. Navigation authorities are required to consult English Nature (or the Countryside Council for Wales) before carrying out any operation likely to damage features of special interest.

26. The environmental impact of waterway restoration projects needs to be carefully considered. The Environment Agency's guidance note Navigation restoration and environmental appraisal describes the steps which need to be taken by restoration bodies to appraise a project's impact. We agree that restoration projects should be designed so as to protect and enhance biodiversity. This will involve careful consideration of the requirements of navigation and conservation and agreement to a scheme which satisfies the needs of each purpose. This is exemplified by the case of the Rochdale Canal where there continues to be close liaison between the waterways bodies, the local authorities and English Nature. IWAAC has, in consultation with English Nature, prepared best practice advice for promoters of restoration projects which will be contained in the revised Waterway Restoration Priorities report to be published later this year.

We recommend that all navigation authorities, co-ordinated by the Association of Inland Navigation Authorities, sign up to minimum environmental standards. These should be agreed to and monitored by English Nature. We recognise that additional costs will be involved in such a move and recommend that the Government make grant in aid available to the smaller navigation authorities to implement improved environmental standards (paragraph 37).

27. We accept that it would be desirable for all navigation authorities to adopt minimum environmental standards. These, taken together with the consideration of biodiversity issues at project planning stage will be of particular help to the various players in achieving an appropriate balance between the social and economic benefits of restoration and the requirements to protect the special features of SSSIs.

28. Where the smaller navigation authorities adopt higher standards which would contribute to the delivery of Biodiversity Action Plan targets (say by maintaining or providing alternative roost sites for bats or soft banks and suitable habitat for water voles) they would be eligible to apply for assistance from the English Nature Biodiversity Grant Scheme. This can provide grants for up to 50% of the costs of such work.

29. English Nature may also enter into management agreements with owners or occupiers of SSSIs, to fund or support positive management of the special features. While English Nature would not normally do so in the case of land owned by the publicly funded navigation authorities, it may be able to help the smaller navigation authorities.

We recommend that any projects to encourage water transfer should be carefully monitored to ensure that they do not have adverse impacts on the environment (paragraph 38).

30. We agree with this recommendation. Environmental considerations are already being taken carefully into account in developing British Waterways' Water Grid PPP.

Leisure

Boating

We agree that it is not feasible to substantially increase the contribution from boaters and other leisure users (paragraph 41).

31. We note that the Committee thinks that it is not feasible to increase contributions form boaters and other leisure users of the waterways.

The Boat Safety Scheme is currently under review by an independent working party. We welcome its interim conclusions and recommendations (paragraph 44).

32. We note the Committee's welcome for the interim report on the Review of the Boat Safety Scheme.

Other leisure activities

We recommend that British Waterways continue with its work of upgrading the canal system for the benefit of boaters, but that it needs to ensure that more is spent on projects which benefit a wider community including improvements to: tow-paths; access points to tow-paths and the waterways; and, where appropriate, cycleways (paragraph 47).

33. We agree that British Waterways should continue to upgrade the canal system and we would support work which benefits the wider community such as that mentioned by the Committee. We welcome British Waterways' significant expenditure on work delivering wider community benefits. Much of its third party funding (over £70 million in 2000/01) is devoted to this purpose.

Organisational structure

We therefore recommend that navigation responsibility for waterways should remain as it is and that the Government should, in the latest quinquennial review of the Environment Agency, make it clear that this arrangement will stand for some years to come. It is essential that Environment Agency staff are now ensured of a degree of stability (paragraph 55).

34. The Committee's recommendation on responsibilities for navigation as between the Environment Agency and British Waterways is noted. This is an issue which is being looked at in the context of the current Financial, Management and Policy Review (FMPR) of the Agency as indicated in Waterways for Tomorrow.

35. The arguments on navigation responsibilities are complex. British Waterways, whose main business is navigation, makes a case for extending its responsibilities. While there is a case for drawing the responsibilities of these two main bodies together there are other considerations such as flood defence which need to be taken into account.

36. We will announce our final decision after we receive the report of the first stage of the FMPR, and the associated independent study of the issues, in a few weeks time.

We recommend that a more formalised joint management arrangement for the waterways should be put in place. A joint board should be established composed of the three Government-funded waterways systems (British Waterways, the Environment Agency and the Broads Authority) together with representation from the minor navigation authorities. The board should be advised by a reformed Inland Waterways Amenity Advisory Council and should have the following objectives:

a) to make the waterways easier to use, and, specifically, to promote waterborne freight;

b) to ensure that both the natural and built environments are conserved and enhanced;

c) to agree and promote higher and more consistent standards in respect of maintenance and environmental quality throughout the waterways; and

d) to provide a forum for identifying areas of common interest and for the strategic resolution of conflicts of use.

Its overall purpose should be to introduce harmonisation across the system, rather than standardisation.

While the board's remit could develop with time, we have, earlier in this report, identified a number of pressing issues. Its most immediate tasks should therefore be as follows:

37. We recognised in Waterways for Tomorrow that the fragmented structure of the waterways had hampered their development and had also presented problems for users. We welcomed navigation authorities' acceptance that they should work together to harmonise and rationalise their working practices.

38. Our policy is to encourage sharing of good practice through AINA; collaboration; and greater integrated and effective management of the waterways.

39. British Waterways and the Environment Agency have signed a Collaboration Agreement covering a wide range of functions and responsibilities. On a wider front AINA are co-ordinating and promoting best practice among all navigation authorities. We are supporting AINA by helping to fund its research programme which covers a wide range of subjects including the development of an environmental framework plan acceptable to all authorities; best practice advice on a range of subjects; advice on the conservation of historic structures; and water resource management.

40. Many of the objectives of the new joint board which the Committee recommends be created are shared by AINA. We note that the Committee thinks that it would not be appropriate to expect AINA to fulfil the role of the new body since its status as a voluntary trade association would make it difficult to effect practical changes on the waterways. However we are not persuaded that the more formalised joint management arrangements proposed by the Committee would be a better way of proceeding. AINA is a relatively new body and we think it deserves more time to prove its effectiveness in bringing about harmonisation by agreement. We will, of course monitor AINA's performance.

The planning system

We are not convinced that a separate planning policy guidance note for the waterways is required. Appendix 3 of the Government's Waterways for Tomorrow document provides a useful summary of each existing PPG note which is relevant to the waterways. Instead we recommend that waterways be taken into account in revisions of existing PPGs, particularly in relation to PPG13 and PPG17 (paragraph 61).

41. We accept that a PPG dedicated to the inland waterways is not required and that waterways should be taken into account when existing PPGs are revised. This has been done in the case of PPG13 published in March 2001. The draft revision of PPG17 was issued for consultation in March 2001. It contains advice relevant to all forms of recreation, including (in paragraph 52) those which take place in the vicinity of water. It also specifically advises authorities to plan for water recreation. The good practice guide being prepared by the Inland Waterways Amenity Advisory Council will provide supplementary advice on good planning of the waterways.

We recommend that Regional Planning Bodies take more account of the linear and interconnected nature of the waterways in the production of Regional Planning Guidance. The potential of inland waterways should also be taken into account by the Regional Development Agencies in preparing their Regional Strategies. Furthermore, local authorities should be using their Local Transport Plans to actively encourage freight transport onto appropriate inland waterways, and to use canal tow-paths to form part of walking routes (paragraph 62).

42. PPG11 Regional Planning encourages Regional Planning Guidance to incorporate sub-regional strategies to address topics which cut across county boundaries. Among the topics identified in PPG11 for such sub-regional strategies is restoring inland waterways (paragraph 9.06). Paragraph 6.03 of PPG 11 confirms that one of the main aims of the Regional Transport Strategies is to provide a strategic steer on the role and future development of inland waterways in the region, for both passenger and freight.

43. The draft revision of PPG17 advises (paragraph 52) that a strategic approach is required to the planning of the waterways, and that authorities should work co-operatively towards this aim.

44. The Deputy Prime Minister has asked Chairmen of the RDAs to take account of waterways in their strategies and actions plans, and to support worthwhile proposals for the improvement, development and restoration of the waterways exploiting the opportunities they offer for wider regeneration initiatives.

45. Paragraph 296 of our Guidance on Full Local Transport Plans (March 2000) specifically addresses the use of inland waterways for transporting freight, and urges local authorities to maximise the potential of the waterways in their areas and set out their proposals within their LTPs. The first full Local Transport Plans were submitted to the DETR in July 2000.

46. Encouraging Walking: advice to local authorities, published by DETR last year, encourages authorities to work with British Waterways to link towpaths to the rest of the walking network.

We are concerned that a draft of PPG13 was published in October 1999 and a finalised version has still to be issued. Guidance on new road proposals which affect restoration projects must be issued at the earliest date, to ensure that any disused waterways can be fully restored. We urge the Government to look again at the case of the Birmingham Northern Relief Road and make every effort to require the developer to make alterations to the design of crossings, so as to safeguard the future of the Lichfield and Hatherton Canals (paragraph 63).

47. PPG13 was published in March 2001, and guidance on new road proposals affecting restoration projects was issued by the Highways Agency in interim form, also in March.

48. We note the Committee's concern about the effect of the Birmingham Northern Relief Road on the Lichfield and Hatherton Canals but we regret the decision cannot be changed. We are encouraging the various parties to work together to resolve this issue. Active discussions are taking place and we wish them every success.

Legislation

We agree that a revision of legislation is required and recommend that the Government introduce a Waterways Bill which would:

49. We acknowledge that the legislation governing the waterways is out of date in certain respects and we will review this with a view to revising it when Parliamentary time allows.

Published 10 May 2001
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