Property investments provide most income

THERE are many things wrong with CaRT, and over-inspecting and under-maintaining are probably two of them. But having a go at their property investments is, I think, wide off the mark, writes Stephen Lees.

CaRT's three largest sources of income are, in order of size, commercial property income, the Defra central grant and boaters' licences and moorings. In the last published accounts (to March 2015) the figures were £46.4 million, £39 million and £33.8 million respectively. Utilities and water sales provided a further £26.1 million. The profits from the property portfolio dwarf income from boaters.

Provide an income

When CaRT was first established as a new charity CaRT was given the existing British Waterways property portfolio specifically to provide an income to support the canal network. At the time some parts of government were eyeing up a quick profit from a sale or privatisation, but fortunately this did not happen.

The portfolio includes industrial, office, retail and residential property valued at over £200 million. As part of the management of that asset quite a few sales and purchases take place every year. So investing in waterside land and aiming for developments that complement the canal landscape and also deliver good returns should be a win, win. I would also defend the idea of selling a tiny strip of river to a property developer, providing the sum of money involved was substantial enough, and the navigation was not compromised.

Less freedom

Bill Ridgeway asks if CaRT is legally permitted to get into property speculation? The simple answer is yes, although I am sure that CaRT would prefer the term investment. A charity has less freedom than commercial companies or indeed some government agencies, but the Charity Commission's test is that the trustees must act in the best interests of the charity. The trustees have to demonstrate that any investment is delivering against the charity's purpose. A very good starting point is that the property portfolio is providing almost exactly a quarter of the funds that CaRT spends on the maintenance of the network.

I think that the 15 years agreement for Defra payments is a much bigger concern. Many complain it was not enough, and is not increasing with inflation. But compared with other Defra agencies (25% cuts in 2012 and a further 15% planned), perhaps it wasn't such a bad deal. The big issue is what will happen after the 15 years are up? I don't believe that voluntary income or charitable donations will come anywhere near beginning to replace that loss.

Wider public benefits

If there is to be any chance of negotiating a replacement grant contract with government, CaRT will have to show wider public benefits. To be controversial, why should Defra subsidise a relatively expensive leisure pursuit of a few? For continued public funding CaRT will need to show use by others, hence the emphasis on visitors and towpaths!

The custodianship of a wonderful heritage asset almost goes without saying, but careful management and protection of its best wildlife assets are also important charitable objectives that attract wider public support. (Sorry Victor!)

Towpaths, visitor numbers and wildlife are controversial on this site, but there is a strategic reason for their high profile.