Canal and River Trust's relationship with government
Published 13 October 2023
Applies to England and Wales
© Crown copyright 2023
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The Canal and River Trust is the charity responsible for maintaining the navigability and safety of 2,000 miles of waterways in England and Wales. It was established in 2012 to replace the public corporation British Waterways. Scottish Canals remain in public ownership.
Our memorandum of understanding outlines the relationship between Defra and the Canal and River Trust.
Transfer order
The British Waterways Board (Transfer of Functions) Order 2012 transferred statutory obligations and duties to the Canal and River Trust. It was accompanied by the Explanatory Memorandum.
Transfer Scheme
The Transfer Scheme transferred waterways property to the Canal and River Trust. It was amended in 2014 to adjust the definition of infrastructure property and align with the Charities Act 2011.
It was further amended in 2023 to remove residual government controls which were incompatible with the Canal and River Trust’s status as a private sector body. This includes the requirement for government consent to dispose of infrastructure property.
Trust settlement
The trust settlement sets out the Canal and River Trust’s responsibilities for the oversight and protection of the waterways and related infrastructure. It was amended in 2014 to adjust the definition of infrastructure property.
It was further amended in 2023 to remove residual government controls which were incompatible with the Canal and River Trust’s status as a private sector body. This includes the requirement for government consent to dispose of infrastructure property or charge it as security, restrict or divert towpath access, transfer infrastructure or wind up the charity.
Grant agreement
When the Canal and River Trust was set up in 2012, the government agreed to provide an annual grant over 15 years to provide a measure of financial stability while the Canal and River Trust developed alternative income streams. During this 15-year period the value of the grant payments total nearly £739 million. A grant agreement was signed on 28 June 2012, setting out the purpose and terms of the grant, as well as the payment schedule and mechanism.
The grant agreement was updated in 2013 to clarify the definition of investment assets. It was amended again in 2022 to alter the funding schedule and mechanism, and to update administrative details.
It was further amended in 2023 to update legal references to data protection legislation and remove residual government controls which were incompatible with the Canal and River Trust’s status as a private sector body. This includes oversight of and limitations to the Canal and River Trust’s use of private investment assets.
Read the Canal and River Trust grant agreement.
Grant review
The grant agreement provides for a review to assess whether there is a case for government to continue to provide grant funding to the Canal and River Trust after the current grant agreement expires in March 2027.
The grant review concluded in July 2023 with government’s decision to provide the Canal and River Trust with over £400 million of new grant funding between 2027 and 2037.
Office for National Statistics classification
The Office for National Statistics (ONS) is an independent body that periodically reviews the classification of all sectors of the economy to assess and report on national accounts.
The ONS originally classified the Canal and River Trust as part of the public sector because there was an element of government control through the arrangements that were put into place to provide assurance as the Canal and River Trust became established.
The Canal and River Trust and Defra have now reviewed the controls and consider they are no longer necessary, for example, because protections are already built in by charity law. We have therefore made changes to the grant agreement, trust settlement, British Waterways Transfer Scheme and the Canal and River Trust’s Articles of Association. Defra has submitted a request for the Canal and River Trust’s classification to be reconsidered.
The controls that have been removed include ministerial powers to remove or replace the Canal and River Trust or transfer assets, in specific circumstances. They also include the requirement for government consent to dispose of infrastructure property or charge it as security, restrict or divert towpath access, transfer infrastructure or wind up the charity as well as oversight of, and limitations to, the Canal and River Trust’s use of private investment assets.