Trustees' Report and Accounts - Canal & River Trust

Grant Agreement with Defra
The future sustainable operations of the Trust rely in part on the long term funding
agreement with Defra. The Grant Agreement was a condition of the Statutory Transfer
of the assets and undertaking from BW and enabled the Trust Board members to form a
positive conclusion about the ability of the Trust to fund its operations at a satisfactory level
for the foreseeable future.
The Grant funding provided to the Trust in the period from 2 July 2012 to 31 March 2013
was in total £33.3m of which £4.0m had been received prior to 2 July 2012 by BW. This
prepaid amount was transferred to the Trust on 2 July 2012 as part of the Statutory
Transfer Scheme and is included within the balance transferred into the General Fund
as at 2 July 2012.
The Grant Agreement provides that the investment assets and liabilities transferred to
the Trust will be held in a Protected Endowment to provide a long term income stream to
contribute to the cost of maintaining and operating the waterway infrastructure property.
The Grant Agreement is for 15 years from 2 July 2012 and provides for a tranche of
conditional income based on pre-determined performance criteria. It also specifies the
terms of the Protected Endowment, which is explained below.
One of the obligations of the Grant Agreement is to publish annually the defined Publication
Data shown in the table below. In addition, part of the grant funds receivable from Defra,
the conditional tranche of the Grant, is subject to compliance with the Relevant Standards
which are explained in the table below. The Network Stewardship Score is a combined
measure of functionality of and the public benefit delivered by the waterway network. It
is calculated annually based on a range of indicators. All Principal Waterway Assets are
measured and categorised according to condition. A structure in condition A is in a good
state of repair and one in condition E is in a bad condition. Embankments and culverts are
included within the definition of Principal Assets but towpaths are dealt with as a separate
category and are graded according to condition grades from A to E where A is described
as very good and E is bad.
The Heritage Asset measure in the table below covers both the waterway assets
categorised as Heritage Assets in the accounts policies as well as operational and
investment properties that have heritage qualities.
Trustees’ Report & Accounts 27