1.  ROLE AND REMIT

  The Waterways Trust is an independent charity established at the instigation of British Waterways (BW) in 1999. The role and remit of the Trust was endorsed by Government in the white paper, Waterways for Tomorrow 2000 (WfT).

  WfT recognised that delivery of the Government's objectives for the waterways would be assisted by a national waterway charity with:

—  the freedoms of working outside the public sector, where necessary working as an enabler—a vehicle for finance and funding, holding assets and benefiting from favourable tax status (eg, Gift Aid);

—  access to charitable funding for waterway projects; and

—  capacity to champion waterways and to involve the wider community in waterway-based activity and fundraising.

  The Trust has a UK-wide remit to help realise the educational, social, economic and environmental benefits of waterways for all sections of the community.

  Our vision is to see Britain's waterways supported, valued and enjoyed by all sections of the community.

2.  ACTIVITIES

  The Waterways Trust works with others in three main areas:

2.1  Fundraising

  The Trust raises up to £2 million per annum for waterway-based projects that enable people and communities to enjoy, and gain benefit from, their waterways. The main themes of the projects for which we raise funds are:

—  Education and learning.

—  Environment and conservation.

—  Activity, health and recreation.

—  Access, arts and community involvement.

2.2  Regeneration

  Since 1999 The Waterways Trust, in partnership with BW, has enabled over £40 million of new investment in Britain's waterways using the freedoms we have outside the public sector. We also work to bring together the complex partnerships that underpin waterway regeneration projects.

2.3  The National Waterways Museum and Archive

  The Trust operates the National Waterways Museum and Archive based at three centres: Ellesmere Port, Gloucester Docks and Stoke Bruerne, Northamptonshire. They currently attract about 60,000 visitors a year, including over 10,000 education and learning visits.

The inland waterways collection, held by the National Waterways Museum, is Government-owned, vested with BW, under the 1968 Transport Act but managed on long-term loan by The Waterways Trust. The collection is Designated as nationally important by Government.

3.  FUNDING

  The Trust's activities are currently supported by a funding contract with BW worth £920,000 per annum. Of this, £465,000 supports the operating costs of the Museums and Archives, £235,000 supports the fundraising activity, and the balance of £220,000 contributes to central costs. The Trust has a turnover of £4.6 million per annum.

4.  COMMENTS TO THE ENQUIRY

  The transformation of the waterways network over the last nine years has been a remarkable story and an undoubted policy success for Government. The Trust is pleased to have contributed to this success, working as a partner with BW on major regeneration projects, fundraising and the National Waterways Museum.

  The Trust is concerned, therefore, that the funding changes for BW indicate an apparent retreat by Government from investment in the long-term maintenance of inland waterways. This will lead to a reduction in maintenance investment, increasing the risk of more serious structural failures and a vicious circle of declining confidence amongst investors and stakeholders. This must not be allowed to happen.

  The focus of our comments to the Committee is the potential implications of the changes in the DEFRA funding for BW on the work of the Trust.

  As noted above, the Trust receives substantial funding from BW to support its work.

  In the long-term, the Trust intends to reduce its dependency on BW. We have made moves towards this end in recent years, but the Trust is likely to remain dependent on BW for its core revenue funding for the foreseeable future.

  The changes in grant for BW announced by DEFRA may reduce the ability of BW to continue funding The Waterways Trust at current levels with major consequences for our work, particularly:

—  Fundraising programmes.

—  National Waterways Museum.

4.1  Fundraising

  In the six years to 31 March 2006, the Trust raised £11.8 million to support waterway projects, general funds and investment in the National Waterways Museum. As part of this, we received cash donations from over 14,000 individuals in response to our appeals.

  As a result of our work, many new people have been made aware of their local waterway, 600,000 have visited the National Waterways Museum and many thousands have been involved directly, taking active part in waterway projects, benefiting their community, their health, learning and general well-being.

  The work we undertake is designed to complement the work of BW and other public sector waterway owners and operators and is not replicated by other organisations.

  The fundraising work of the Trust is now established but needs continuing support to sustain it and develop further. An unintended consequence of the changes in funding to BW could be to put these programmes at risk should BW be unable to sustain their financial support.

4.2  The National Waterways Museum

  Government policy on free museum entry has been a resounding success. A report produced by the London School of Economics in December 2006 noted that more people are visiting museums than attending Premiership football matches and free-to-enter museums are contributing £1.5 billion to the economy. According to the DCMS, there has been an 83% increase in total visits to formerly charging museums since admission charges were scrapped.

  However, this policy has created an expectation in the mind of the public that all museums are free to enter. The National Waterways Museum has faced enormous pressures since free entry for nationally-funded museums was introduced. The Museum receives no Government funding and must charge for entry. Visitors to the Museum have declined sharply since the free entry policy was introduced in 2001.

  The current funding of the Museum is unsustainable. The liabilities of managing the museums and managing the publicly-owned collections, outstrip their income earning potential. This is despite improved customer service and commercial performance, investment of nearly £5 million in improved galleries and interpretation, and several rounds of cost-cutting, efficiency savings and rigorous review.

  We have approached Government, both DCMS and Museums Libraries and Archives Council (MLA), for assistance. An Independent Strategic Review, jointly commissioned with MLA in 2006, estimated that £1 million per annum is needed to put the Museum on a secure footing, and to deliver a new vision for a Museums without Walls reaching out on the waterway network. However, the first priority is for £450,000 per annum to enable us to offer free entry. This would double visitor numbers in two years and enable the Museum to grow and develop new revenue streams that would help stabilise the Museum finances.

  DCMS recognises the strength of our case but to date has not provided new funding.

  There is precedent for Government to intervene. In other cases, Government has acted to safeguard collections which face similar pressures. Notable examples are, the National Coal Mining Museum for England and the Peoples History Museum, both of which now enjoy Government funding, offer free entry and have seen their visitor numbers increase two-fold.

  Faced with current and continuing pressures on their funding, which have resulted in 180 job losses, BW is unable to offer the new funding now urgently needed. Unless DCMS comes forward with assistance in the near future, the National Waterways Museum is at risk.

  A background note on the National Waterways Museum is provided in Annex 1.

5.  CONCLUSION

  5.1  The changes in grant available to BW may reduce BW's ability to sustain its funding to the Trust. This would damage the Trust's fundraising programme and the benefits we can deliver in terms of:

—  Education and learning.

—  Environment and conservation.

—  Activity, health and recreation.

—  Access, arts and community involvement.

  5.2  The costs of operating the National Waterways Museum and managing the publicly-owned collection and archive, outstrip their income earning potential. New revenue funding is urgently needed.

  The first priority is for £450,000 per annum to enable us to offer free entry. This would double visitor numbers in two years providing access to many who are unable to pay and help stabilise the Museum finances.

  The changes in grant available to BW mean that BW clearly cannot provide increased support and may have to cut future funding. This sharpens still further the need for the museums to be provided with new revenue funding from DCMS.