20 MAY 2003  

MR JIM STIRLING, MR JIM MCINTYRE, MR EUAN DOBSON, MR STEVE INCH AND MR JIM MCCONNACHIE

  Q20  Mr Robertson: If you remember, I mentioned the Clydebank development last time. My concerns were obviously for the west side of Glasgow and, also, for the venture site at Braehead. Are we still at the stage where we are still making sure that none of these projects are going to be affected by this development?

  Mr Inch: The City Vision also involved discussion with Renfrewshire Council so we have looked at the totality of riverside and water-based development as a whole. In terms of the canal project with British Waterways Board and ISIS, we have also prepared a water space strategy which looks at, again, how water is used not just in the Glasgow section but from Bowling all the way through to East Dunbartonshire. The discussions we have had with, particularly, the Clydebank Rebuild Project, I think, try and link the canal to the development of the waterfront, again not in a competitive way but we are trying to identify ways we can ensure the projects are complementary rather than simply moving activity about in a displacement sense.

  Q21  Mr Sarwar: I believe that Glasgow City Council has applied for a funding application to the ERDF and the Commission. What are the chances for that?

  Mr Inch: The application for the canal project is an application by British Waterways Board and ourselves. At the moment it has been through an advisory group and I think the signs are reasonably positive at the moment. We also had the Chairman of the Millennium Commission in Glasgow just a couple of weeks ago. He visited several projects in the city and seemed very impressed with the regeneration potential of the re-connection project, and I am reasonably positive that all the matching money can be put in place for this within the next two to three months. Planning consent is in for that at the moment and we are trying to expedite the process. I think most of the ground work has been done to allow that part of the project to happen.

  Q22  Mr Hamilton: Is there any European money being sought in any respect of phase 2 of the development of the canal?

  Mr McConnachie: If I can answer that for East Dunbartonshire, we have an offer of grant for the creation of a basin at Kirkintilloch for about 50 boats. We have worked out that scheme in association with British Waterways and we now have an offer of grant in the order of £2 million, on the basis that it will support development of the town and create spin-out related craft-sector-type industries around the activity. One of the key issues in stimulating business development is you have to have the movement of boats and something actually happening on the water to generate the interest of people to stop and spend. Ideally, in our site, it is immediately adjacent to the town centre, so we have got the chance of reinforcing the needs of the town as well as generating economic activity and jobs around the Canal.

  Mr Inch: Specifically from Glasgow's point of view, I think our intention would be that if we bring forward, for example, the project to refurbish the Maryhill Burgh Hall and Baths complex into a business centre that would be an ERDF eligible project. Our natural expectation would be to apply for it and to use the City Growth Fund money as the matching money for that.

  Q23  Mr Hamilton: For how long is ERDF funding allocated?

  Mr Inch: The current programme runs until the end of 2006, but it is on a tapering-down scale.

  Mr Stirling: We have ERDF funding in the East of Scotland towards tourism-based marketing in conjunction with the local tourist board and Falkirk Council. I think it is about £700,000 over several years towards that. That is an East of Scotland grant which has already been given.

  Mr Hamilton: Is Falkirk in the East? It was in the West the last time, or at least for me!

  Q24  Mr Robertson: I wonder if I could ask Mr McIntyre a question? The jobs you were talking about, in excess of 2,500, you were hoping to create, is this beyond expectations or not as good as you had hoped for?

  Mr McIntyre: I think in that aspect it is beyond what we had expected of them to be able to identify after year one. The job forecasts were over a five-year period and we expected that over the five-year period 4,000 jobs might be anticipated in terms of investment along the canal corridor. Where we are up to we can identify 2,500 jobs in broad terms from the ten big projects that we are aware of. We know of another 50 developments in the pipeline so I would hope to have the 4,000 jobs within that canal corridor.

  Q25  Mr Robertson: You seem to be tapering down the job numbers. In your Millennium Link project that you sent to us, initially it was "will create 4,500 jobs". Then your colleague Mr McGilp said it would be "in excess of 4,000 jobs" and now you are telling me it is going to be "about 4,000 jobs". You seem to be tapering down all the time.

  Mr McIntyre: I do not mean to. I think the figure I have been given was in excess of 4,000 jobs. I think the question was did I think it was going well against that or badly. I think against that forecast of 4,500, 2,500 identified in one year is quite good. I would be encouraged by that.

  Q26  Mr Weir: First of all, can you tell us how many sustainable new jobs in the area can be entirely attributed to development connected with the canal project? I was looking at the DTZ report before us and the list that you mentioned earlier which starts with Clyde Shopping Centre new refurbishment. Going down this list, I can only identify the Falkirk Wheel as definitely being attributable to the canal. I would be interested, particularly, in the Asda distribution centre at Falkirk (which I am sure is very welcome in Falkirk). Why is that attributable to the canal? A road is more important to a distribution centre for Asda.

  Mr McIntyre: I am sorry, is the question why is the Falkirk Wheel—?

  Q27  Mr Weir: No, the question is how many jobs and developments are directly attributable to the canal? How many would have happened otherwise?

  Mr McIntyre: I think that is an extremely difficult question to answer. I think that when we put forward the economic appraisal for European funding it was agreed that we would identify jobs as jobs forecast on a formula based on private sector development that would be created within the corridor. That was defined and that is what we have done, but I think it is a very legitimate thing to ask would Lochrin Basin have happened anyway with the canal there? My argument would be that it would happen to a higher quality and that the development would be enhanced by it. I cannot say whether Miller would have gone into Lochrin Basin anyway.

  Q28  Mr Weir: I asked specifically about the Asda distribution centre which has been credited to the canal. I am at a loss to see why the canal would bring the Asda distribution centre to Falkirk.

  Mr Stirling: I think the issue here is a common issue in all of these cost-benefit studies. British Waterways commissioned, with Scottish Enterprise, the original study which was done under European rules because of the size of the project—it had to go to Brussels for overall approval. As I understand it, and the Committee may wish us to ask a definitive question of DTZ Pieda, the way these studies are done is they, first of all, look at everything happening around about, so that there is no initial judgment as to what you include or do not include. Then factors for displacement and additionality are applied by the economic consultants. So my understanding is that the figures that were quoted in the report are figures after additionality and displacement had been taken into consideration. So I would assume, on something like the Asda one, they would apply a large displacement factor and, therefore, they would not count very many of them, if any at all. However, on other ones they will apply a smaller factor. It must come down to the judgment of the economist, because we in British Waterways are not qualified to comment on that.

  Q29  Mr Weir: We have got a report before us which says that these developments—and it gives a long list—are being attributed, basically, to the canal. I can see how some of them can be attributed to the canal (the Falkirk Wheel is a perfect example), such as the development at Edinburgh Quay, but you have got the Asda distribution centre which—welcome development though it is—I cannot see its connection to the canal. That is what I am asking you. It does seem to me, being a suspicious soul, that the figures are being inflated by putting any sort of development along the route of the canal into this.

  Mr Stirling: The original report had figures for displacement and additionality. What we could do, Chair, is answer that question specifically by reference to DTZ Pieda and come back to the Committee.[6] The point is well-made and we fully understand the point, but I do not think we are in a position at this table to answer that question.

  Q30  Mr Robertson: Mr McGilp in our previous report said "The numbers contained in the Scottish Enterprise diligence on this project assumed, for indirect jobs on the various business sites, regeneration sites, 50% displacement, that was the assumption which was made".[7]Somebody somewhere along the line has been assuming displacement.

  Mr Dobson: Can I answer that question, Chairman? In terms of forecasts, forecasts were made at the beginning of the project. They related to a one-kilometre corridor adjacent to the canal. The review against those forecasts, for ourselves and British Waterways, captured development that has taken place or is in the pipeline within that one kilometre corridor. An ex-poste evaluation of the attribution of particular jobs to the canal effect, will require to be done, perhaps, in five years to see the exact numbers of jobs in developments along the canal and to do some factual analysis of the type of jobs and then attribute those to the canal effect and to other effects. So the review here is a review against the original forecasts of development projecting forward job numbers in those areas.

  Q31  Mr Weir: It has been suggested in some of the papers that potential development along the course of the canal has been hindered by health and safety concerns with respect to sites. I think that was hinted at earlier. Can you tell us if contaminated land is a common feature along the canal and what has been done to overcome the problem?

  Mr Stirling: In essence, canal-side land does tend to be contaminated land due to the industrial nature of its previous use. Whether that causes dangers, I think, is a different issue altogether. I think people are becoming better and better at dealing with the reintroduction of contaminated sites back into use. So I am not aware of any specific issue other than the mercury issue at Redding on the Union Canal, which was to be dealt with as part of the development of that site. The consequence of that, as far as the canal was concerned, was dealt with during the Millennium project. I think we spent in the order of approximately £5 million removing mercury from about nine kilometres of the Union Canal which had come from that site. Mercury is a dangerous contaminant, but I am not aware of dangers to health on sites adjacent to the canal. There are contamination issues, yes, which have to be dealt with properly, but I am not aware of any dangers to health.

  Q32  Mr Weir: You are not aware of any developments that have not proceeded because of that mercury or any other contamination?

  Mr Stirling: The Redding site has been a difficult site because of the costs involved in remediation of the mercury, and I am sure that site will require some kind of public sector assistance to make it work. That is usually the answer—some public sector assistance for exceptional site costs.

  Mr Inch: Could I add to that, Chairman? Within Glasgow there are two sites next to the canal which are very badly contaminated: the site of the former rubber works in Ruchill and the site next to Dawsholm refuse works, which was an old coal-mining and tar works. At both of those sites we are looking at the potential to use money from a derelict land fund which has been set up by the Executive, which will allocate money to Glasgow. We would attach some of the money to those two sites if we could find development partners. There are considerable problems there and they will require public sector investment to remove the exceptional costs, but we are aware of them and we have got a solution to it.

  Q33  Mr Duncan: In the earlier report it was identified that potential commercial use of the canal was "limited"—was the word. Can you give us, inasfar as the canal has been revitalised, an indication of what commercial use there now is and, particularly, how you see that going forward to the end of what was initially the end of your five-year assessment period? I would be interested to know, particularly, first of all, in terms of hard commercial use as opposed to leisure, if it is split separately.

  Mr Stirling: I can answer that, Chair. The best prospect of hard commercial use (as you call it) is waste transfer. There is a study under way at the moment involving the private sector and the public sector in looking at using the Forth and Clyde Canal in particular and, possibly, the Union, to move waste from transfer stations and, obviously, points of creation to points of disposal. It is quite an advanced study; the private sector is still showing a degree of enthusiasm for it and we have even been to the stage now where we have taken boats through the canal, timing the movements of them and looking at wharfage sites where they could load and unload waste material from the vessels. So it is not a definite yet but it is certainly our best prospect of use.

  Q34  Mr Duncan: Can I ask whether that is genuine commercial interest or will it be incentivised by any other partners?

  Mr Stirling: It may be incentivised through the Freight Facilities Grant. There are probably going to be applications for FFG as far as facilities and wharfage are concerned. I think FFG can also now be given towards new vessels, as far as I understand it, but the study, from the knowledge I have of the study, has gone well and the private sector is apparently still interested in it, having done the trials they have done and the work that they have done.

  Q35  Mr Duncan: There has been no progress with anything in terms of hard commercial transport, other than waste?

  Mr Stirling: No. We have had an approach recently (and I do not have any detail other than I know we have had an approach recently) from two sources: one is a quarry at Auchinstarry, which is interested (I think it is Tarmac or one of the big, nationals) in moving aggregates by water along the canal. Another company to do with clay or terracotta who move broken rejects is also looking to see whether they can use the canal. They are very, very new; I only heard about them within the last fortnight, so I have no idea whether they are meaningful and I have no idea whether that is likely to happen, but it is interesting that people have started at least asking the questions.

  Q36  Mr Duncan: Progressing the potential future commercial interest has been done under the Scottish Enterprise remit, strictly, here?

  Mr Stirling: Most of it will be being done with British Waterways. We have people—who are not based in Scotland, they are based in England—who specialise in freight and commercial use of the waterways. So the study I mentioned earlier on waste is being managed by colleagues of mine in England but within British Waterways.

  Mr McConnachie: Could I just add that it is particularly relevant to East Dunbartonshire in that we have a waste transfer station immediately on the canal. New targets have been set for electrical and electronic equipment recycling, which may create the potential for a local segregation handling plant in the disadvantaged areas. So we have got a particular involvement in that study. It is definitely one of the best opportunities for testing commercial interest and viability on the Canal.

  Q37  Mr Duncan: I also see the information in the DTZ report on leisure use, on which there has been progress. DTZ are still suggesting that a five-year target is achievable on those leisure uses. Is there a potential conflict between increased commercial use (I called it "hard commercial use")? Frankly, if I was endeavouring to rent a canal boat for me and my family, am I wanting to dodge lock traffic which is currently taking waste to the open sea?

  Mr Stirling: We do not believe there is a conflict; we do it elsewhere on the network. British Waterways is as keen throughout—I almost said the United Kingdom but we are not in Northern Ireland—Great Britain to see the canals used for freight. We do not see a conflict with private use, principally because there is not a huge difference in size between the vessels. It is also possible because we have staff to timetable and to organise. As an example of our experience on the Caledonian Canal in the north of Scotland we have a vessel which essentially occupies the whole size of the Caledonian lock. It is a large vessel which carries 63 people in cabins and goes down the canal in one direction at the beginning of the week, goes out to sea, to Tobermory I think, and comes back the next week. Equally we have novices on cabin cruisers on that canal on holiday, and we manage that on a daily basis because we have lock keepers and staff, and it would be the same on the lowland canals. We have staff who liaise with the private users and assist them, and who would know what was happening with the commercial users, so it is not unknown for us to ask a private boat to wait while a freight boat comes through another section of canal until it has passed and then we allow it through. It is a conflict which we do not consider significant, and it can be managed.

  Q38  Mr Duncan: I am sorry to labour this point but I think it is significant. I would suggest to you, though, that if a private sector operator in Marlow were to take commercial waste down the canals, down the Thames, to the open sea, that would cause considerable concern from commercial leisure users of that Upper Thames area. Is there any representation that has been made to you by potential leisure users, rental craft users, on increased commercial use?

  Mr Stirling: No, there has not been. Within the inland waterway network there is a small lobby of canal-based freight companies who lobby British Waterways and others on a regular basis about getting more freight on the water, and I personally have never heard of the organisations who support the private enthusiasts, if you like, ever complaining that the freight people are wanting to use the water as well. Most canal enthusiasts would welcome that. I think the issue is whether a novice on a hire boat would be able to deal with that, and that is a management issue for British Waterways to deal with by being aware of the issue rather than allowing it just to happen in an uncontrolled manner. It is not a long canal; it is only 35 miles across Scotland, so it is not as if people disappear from view and we do not know where they are.

  Q39  Mr Joyce: Who co-ordinates overall, if anybody, investment development along the route of the canal? I see in the Scottish Enterprise submission it says that the structures are changing somewhat. Could you broadly outline why they are changing and what they are intended to achieve?

  Mr McIntyre: Currently there are a number of structures because it cuts right through Scotland. Scottish Enterprise have a project manager who looks pan canal, across the canal. The operating model for Scottish Enterprises is five local enterprise companies which operate in that area, and each feed into that project manager. That meeting takes place every two months and British Waterways attends that meeting. In addition there are seven local authority areas that are affected and there is multi agency participation in those groups, as appropriate I suppose, but sometimes that would include local authorities, Scottish Enterprise, British Waterways and Communities Scotland depending what the particular issues were. Essentially a lot of the activity now is about levering private sector money, as the Committee has highlighted, and that tends to happen on the ground in specific sites where people are trying to do it. It is changing in the sense that I think there was a document produced with the Scottish Executive called Scotland's Canals which highlighted the importance of the canals, and the proposal really was that there may be a Scottish Executive ministerial chair cross-canal of the whole canal network in Scotland to keep the issue high on the agenda, and that the partners would have representation in that, and obviously Scottish Enterprise would be involved in that and British Waterways and others. Below that there are two other groups, for the highland canal system and the lowland canal system, and again Scottish Enterprise would be represented on the lowland one and I guess Highlands and Islands Enterprise would be represented on the highland canal system group. Those are much more about management and co-ordination of the investment both with public and private sector in those two specific networks.

  Mr Stirling: We are in transition at the moment. The Committee will be aware that there was in existence the Lowland Canal Steering Committee chaired by a councillor from Glasgow under which there was a Lowland Canals Advisory Committee with officials on it. In response to the Scottish Executive policy paper published in October last year we are in discussion with the Scottish Executive about having a Scottish Canals Committee, and our hope would be that the minister would be involved in that. Therefore, in consultation with our partners and in discussions with the Steering Committee, we are suggesting that we should adjust the current set-up to be a committee in the Lowlands and a committee in the Highlands but interestingly the title of the committee would be the Lowland Canal Development Committee. The chair of that committee has not been decided yet. We are in discussions with Scottish Executive and we might get the Scottish Executive to chair the committee because they would have a co-ordinating role. We have also spoken to Scottish Enterprise about chairing the committee and that is not resolved yet. In the meantime we are continuing on an interim basis with the steering committee format: Councillor Gray, who was its chair, although he retired at the May election, has agreed to continue as an interim chair until new arrangements are in place. Those arrangements have been driven by Scottish Executive publishing a policy document and a recognition by all the partners in the Lowlands that the development of the canal corridor was now the priority. The original steering committee came out of the fact that there was a statutory local plan for the Forth and Clyde, and it required a monitoring committee to supervise the local plan. When the Millennium Link came along the Forth and Clyde Advisory Committee became the Lowland Canal Steering Committee by incorporating the Union Canal. It was essentially the same membership with the addition of the Union Canal, but it was based on the local plan which preserved the Canals, prevented further blockages, and promoted restoration. We have now done the restoration and everybody recognises the important thing now is development, so we are seeking to put a new regime into place which is focused on development and co-ordinating development.

7   Committee's Second Report, Session 2001-02, Job Creation Potential of the Modernised Forth Clyde and Union Canal, HC 424, Ev 51. Back