Policy paper

Report on review of the grant agreement between Defra and the Canal & River Trust

Updated 11 July 2023

Applies to England and Wales

Defra has undertaken a comprehensive review to determine government funding for the Canal & River Trust (C&RT) from 2027. C&RT is the charity responsible for 2,000 miles of waterways in England and Wales.

The review considered both whether the grant funding has provided value for money, and whether there is an ongoing requirement for government intervention to fund C&RT. Our evidence-based assessment undertaken during the review drew on government best practice, as set out in HM Treasury’s 5 case business case model and the Green Book. It drew on cross-government and external expertise to make a comprehensive and independent assessment.

Future funding model

From the review, we have concluded that the C&RT grant has so far demonstrated value for money and future government funding will continue to deliver significant public benefits. However, consistent with the policy intention when C&RT was created, we should go further in moving them into a position of reduced reliance on government funding.

Therefore, subject to certain conditions being met, Defra will provide over £400 million of ongoing funding for the C&RT from 2027 to 2037. This consists of a fixed grant funding commitment which embeds a 5% a year downward taper over 10 years (starting from £50.0 million and ending at £31.5 million in nominal terms).

This funding is subject to conditions which include co-signing a Grant Agreement with C&RT, which will ensure that C&RT is accountable for the grant funding in line with Government Grant Functional Standards. This Grant Agreement will include an agreed set of Key Performance Indicators (KPIs).

The KPIs will measure C&RT’s delivery against the key aspects identified through the grant review, outlined above. There will be a review of this funding after 5 years, in 2032, at which point the KPIs will be reviewed.

Funding benefits

In January 2023, the UK government published its ambitious Environmental Improvement Plan (EIP), setting out its commitment to continue to work with navigation authorities as appropriate to help realise the public benefits provided by inland waterways across England and Wales.

Ongoing grant funding will assist the C&RT in its contribution to cross-government priorities, including those in the EIP, particularly across 4 key aspects: access to the outdoors, levelling up, natural capital and protection and long-term resilience.

1. Access to the Outdoors

C&RT waterways often provide unique access to green or blue space in urban areas. They therefore have an important role to play in increasing local access to, and engagement with, these spaces. This contributes to national cultural capital and visitor economy as well as realising educational, health and wellbeing benefits from easy access to a pleasant outdoor environment and through active travel routes for walking, cycling, or recreation.

2. Levelling up

C&RT contribute to growth of local economies through waterways businesses, community regeneration, job creation and better rural broadband connectivity. This supports levelling up as 61% of households within one kilometre of a C&RT waterway have at least one dimension derived from Indices of Multiple Deprivation data.

3. Natural capital

Land owned by C&RT overlaps with 100 Sites of Special Scientific Interest (SSSIs), 14 Special Areas of Conservation and over 1,000 county wildlife sites. This land forms an important part of our natural environment by providing green and blue corridors along which biodiversity can flourish. In managing this, they can help meet government goals to maintain and improve the ecology, biodiversity, air and water quality.

4. Protection and long-term resilience

Safety and accessibility of C&RT’s historic waterway infrastructure and heritage assets must be made resilient to climate change risks. C&RT further have a key role in supporting net zero, renewable energy and sustainable transportation targets to improve our climate change resilience.

Engagement

To solicit input and views and help shape the analysis and recommendation, we engaged with representative bodies. These included:

• British Rowing
• Sport England
• British Canoeing
• British Marine
• Yacht Harbour Association
• Ramblers Association
• Angling Trust
• Cycling UK
• Local Government Association
• Inland Waterways Association
• National Association of Boat Owners
• Commercial Boat Operators Association
• Association of Inland Navigation Authorities
• National Bargee Travellers Association
• Association of Directors of Environment
• Economy, Planning, and Transport
• Town & Country Planning Association
• Groundwork Trust
• National Citizens Service
• Huddersfield Canal Society
• Wildlife Trust
• Historic England
• Heritage Alliance
• National Trust
• Sustrans
• The National Water Safety Forum