MONDAY 16 APRIL 2007

MR ROGER HANBURY AND MR ALAN LUTMAN

  Q394  Chairman: Welcome, gentlemen. We have met Roger throughout the day so he does not need any particular introduction to us but Alan Lutman, I know, is Director of Finance for the Trust. We have already taken the opportunity of a visit around the museum and certainly to talk to Roger about some of the funding difficulties. I do not want to re-rehearse some of that. What I would like to start by doing is looking at the issue of who might be able to help and certainly some of the issues to do with whether Defra in its present incarnation is the appropriate vehicle or we should be looking at a much more joined-up effort from Government, and indeed other public sector bodies, including local authorities. Perhaps Alan has a view on that or does Roger want to start off initially?

  Mr Hanbury: Perhaps I might start initially, Chairman. Thank you for your introduction. We were pleased to have the opportunity of showing you around this morning and also to show you that we are not just a museum operator, although that is an important part of our work, we have got a wide remit including regeneration and raising funds for waterway projects, which in a good year amounts to about £2 million. The museum operation is our great preoccupation at the moment because it needs to be resolved and it is threatening in terms of its stability impact on the financial stability of the Trust. We see a mixed economy in the solution which might come forward. British Waterways already gives us half a million pounds in direct cash support plus free premises on this site and at Stoke Bruerne and we do not see them as being able to contribute any further, particularly in the circumstance where they have just had to shed 180 jobs and lose significant chunks of their current account grant income from Defra, and that clearly is going to be a long-term rather than a short-term trend as far as we can see. The solution we see is in doing everything we can to improve efficiency, and we have been doing that in a whole series of rounds of cuts over the last three to four years, improving our income generation, and we have made some big steps in that direction in raising the amount of income we get per head, up about 30 per cent in the last two or three years. The big issue for us is footfall, people coming through the door. In a market which is increasingly driven by free entry, and people expect museums to be free entry now, this is becoming a major issue for us because not only are many government funded museums free entry but also the local authority ones are increasingly free entry using the council tax to support that subsidy. We have to charge and are, therefore, in a declining visitor situation. Hence our campaign to target DCMS to ask them to support us over the last two and a half years which has produced a high level of interest but actually no cash yet. I guess we are probably in the critical phase of that campaign right now because the Comprehensive Spending Review may well determine the scope which is there for DCMS to help us. It is a mixed economy which we are after and seems very appropriate and is also paralleled in other areas of museum provision where there are many players contributing. Whether or not the local authority is going to be a significant player is perhaps more difficult. We have good relationships with all our local authorities, county and city in Gloucester, borough council and county in Ellesmere Port and, indeed, in Stoke Bruerne in Northamptonshire, but sadly their coffers seem to be bare. In some cases we get more than the mandatory rate rebate but it is not an awful lot more than that and the amounts of funding which they can contribute, faced with their own museum operations which are drawing huge amounts of subsidy, it seems to be difficult to see how they could make very much more in the way of an active contribution to our financial welfare.

  Q395  Chairman: Alan, do you want to say something very briefly about the actual numbers and how difficult the current situation is, particularly with the museum, but overall trying to run the Waterways Trust which has a regeneration capability as well as, if you like, wanting to maintain the fabric of the history of the canals?

  Mr Lutman: The finances of the Trust are fairly difficult and we have had a cumulative deficit for the last few years, although we have got that down from 181,000 in 2003 to about 46,000 currently. We are heavily dependent upon the British Waterways contract in our income, that is certainly true. The turnover of the Trust is about 4.6 million, of which the best part of a million of that is the contract from British Waterways.

  Q396  Chairman: In terms of some of the fund raising that you are doing, to what extent do you feel that in the way you were set up and the implication that you are almost part of BW but not part of BW there is an invidiousness there which some might find difficult to get a grip on, but also you are in Gloucester—that is the place I know best—and after we get over this quite difficult period of the immediate regeneration there must be some opportunity for fund raising from the immediate local population but also to bring people in if you could perhaps get some serious investment into the Trust and into the museum. Is that not the case?

  Mr Hanbury: There are several issues in there. One is our closeness to BW. We are de facto dependent on a substantial grant from British Waterways. We were set up with the endorsement of Government so we are, if you like, the establishment version of a charity, but we are here with freedoms outside the public sector to do things which would not otherwise happen, which is a very important facet of our constitution. We are not hidebound by Treasury policy, we can move to meet needs and make things happen which otherwise would not happen. That is certainly the history of our contribution in the last seven years, that we have been able to do that. The fund raising side now is a particular opportunity. British Waterways is under huge financial pressure itself and we are in a position where we can deliver some of their obligations towards social development, access education and community development, probably at a lower cost than they can. One of the outcomes of our current discussions with BW is that we are going to bid to them to see whether they will spend more with us on fund raising because we can fulfil some of their obligations at a lower cost than they could themselves. I think that is a real opportunity and it shows the intended partnership between a public sector organisation which is looking for greater flexibility and nimbleness from a charitable sector partner. Is there more scope for fund raising for museums, was that the gist of your question, Chairman?

  Q397  Chairman: Yes. Once this development is completed what could you badge Gloucester as capable of doing which could bring some serious income in? I accept what you say about free entry, but if you get the punters in here what can you do with the punters not just in the museum but on this wonderful waterfront and along the canal side and so on and so forth?

  Mr Hanbury: I think the future of the museum in Gloucester, and there are different strategies at each site, is to interpret the regenerated docks. The next ten years should be golden years but there are two or three difficult years to get through before we can really do that. The museum here should be interpreting Gloucester Docks, the destination, and it should not just be the museum, it needs to be the museum in the docks, it needs to provide activity, vibrancy, movement, colour and experience to people who want to come to Gloucester for a day out, and that is what we hope the market will be in the future. The boat trip which you took part in today is part of that and the idea is that we can shuttle people around different parts of the Docks and Canal site, explain it to them so there is an interpretation of each area and they can get a full interpretation and understanding of the dock site as a key part of where our future goes.

  Q398  Mr Jack: Can you just explain in a little more detail, I gather since 2000 you have raised nearly £12 million, what are the main sources of funding for this?

  Mr Hanbury: Quite a bit of Lottery. Let us just take them one by one. The Lottery has provided us with significant investment in museums. Probably over £3 million has gone into the museums in substantial Lottery grants. On the waterway regeneration programme we raised additional money from the Millennium Commission on the Ribble Link which amounts to several hundred thousand pounds. On the Anderton boat-lift we ran a public appeal which raised £400,000 and other fund raising, some of it was Lottery based, some of it was regeneration money, raising in total about £1 million. There are some quite chunky bits of Lottery funding and regeneration funding which have come through our books. We also have a programme to secure funding or raise funding from individual supporters and that has produced the best part of a million pounds in the last seven years. That is heavily dependent on initial set-up funding which British Waterways gave us to help develop that programme, but in the future we see the development of a supporters' scheme as being a key part of what we do because we want to see a wider constituency of people with financial engagement in the waterways as well as practical engagement.

  Q399  Mr Jack: In her evidence Cathy Cooke was talking about some of the inter-relationships that form locally based partnerships and I am intrigued because you mentioned an access to regeneration money and there are a number of routes—Regional Development Agencies, local authorities—through which monies like that can come. Do you see yourself in a sort of catalytic role, bringing together partners to achieve an objective, because the kind of projects you have just described are what I call the icing on the regeneration cake? In other words, if we come back, what is the core thing we want, it is the maintenance of a good canal network, but to enhance its value, to make it living heritage, you seem to be saying that your core task is raising the money to do that and if you do that then lots of other regenerative activity comes on the back of it. I suppose what I am grasping for is who ought to be in charge of this sort of regeneration effort because we have got local authorities, RDAs, a bit of British Waterways, we have got you and others, I am struggling to figure out who is in charge.

  Mr Hanbury: In a world that sometimes seems to be dominated by a controlling mentality, I think waterways projects are one area where each of the players has a particular contribution to make. The point we made when we took you round the Cotswolds this morning was that 17 organisations want to support the scheme—local authorities, voluntary sector organisations, British Waterways, the RDA and special interest groups as well—and want to see the regeneration of the waterways happen because each of them is going to get some value out of it in terms of their own particular core remit. I believe in partnership and I think partnerships in waterway schemes are exemplars in terms of partnership. The Kennet and Avon Canal, which is a mature scheme, now completed and delivered very successfully over a generation, 30 years, has always been about people working together, about the six local authorities along its length joining together to talk about this strip of water which is common to all of them. The same thing applies in the Cotswolds where our partnership board has Gloucester County, Stroud District, Wiltshire County, North Wilts and Cotswold District Council representatives on there and they all turn up sending their own representatives to those meetings every quarter to find out what is going on and to contribute. I think the partnership model has to be right for waterways because they are so broad-based and offer so much. That is the excitement of it really, that out of a scheme you get environmental benefit, social benefit, economic benefit, and each of those organisations wants some or all of that.