Brian J Goggin <[EMAIL PROTECTED]> wrote: >On Thu, 28 Feb 2008 15:27:30 +0000, Adrian Stott ><[EMAIL PROTECTED]> wrote: > >>The cost of maintaining them properly is substantially outweighed by >>the benefits they provide to the country. However, they cannot >>support themselves solely through charges to individual users. >>Therefore there must be a source of funding to make up the difference. >>That source has to be government. > >OK so far .... > >>However, if the money comes through annual political decisions, it will >>almost certainly not enough will be provided. So, instead of getting >>annual income directly from government, which will be inadequate and >>subject the waterways to direction/whim from the government (i.e. >>keeping them "under the government's thumb", it would be much better >>to focus efforts on getting a one-time capital endowment, which the nav. >>authority (with luck, just one, BW) can then use to generate income. > >This proposal has some drawbacks. > >First, it is not clear that HMG would react with delight to the >prospect of presenting BW with a massive dowry, perhaps twenty times >the size of the annual grant to BW. The whole thrust of Uncle Gordon's >strategy seems to be to avoid capital spending
First, HMG doesn't react with delight at the prospect of *any* spending, and waterways are ever lower down the list in its good books. However, my proposal does not envisage spending of a large chunk of capital. It envisages HMG's *lending* the endowment (note: NOT dowry) capital to BW on a perpetual basis, interest free. It therefore would not count as part of the Public Sector Borrowing Requirement. In fact, I proposed that the endowment should be in the form of a transfer of (part of) the government's huge real estate holdings (not necessarly waterway-related). Probably about £1 billion-worth for BW as now, or £1.5billions-worth if BW takes over the EA waterways (which it would make sense to do at the same time, as EA is precluded from holding capital assets). At the same time, the government would stop giving *any* annual grant to BW (and EA Navigation), which change it could present to the gullible public as a major saving of spending. >Second, it is not clear that, even were it willing, HMG would be able >to calculate the amount of the dowry that would be required. If it >provided too much money, such that BW's income exceeded its >commitments, it would come under political pressure to retrieve the >excess; if it provided too little, BW would be no better off than it >is at present. Certainly the amount is yet to be debated. Don't forget, though, that BW still has a significant backlog (not least of dredging) to catch up on too, so there is plenty of room for fudging if the endowment loan were too large. And it would be possible to build in mechanisms to remedy under- or over-endowing. >Third, BW would in fact be worse off. At least, under the present >system, if BW doesn't have enough money it can hope to argue for a >better allocation next year. Under your proposal, it couldn't do that. >If the initial allocation is inadequate, if there is a demand for new >or restored canals, if there is a canal catastrophe (perhaps caused by >climate change), if the income from property falls faster than wages >and other costs do, BW would be left with an income well below its >outgoings, and with no hope of any extra from anyone. Its response >could only be to cut: cuts far more severe than have been seen so far. For new or restored waterways, BW would continue doing what it does now, i.e. insisting that the full present value of all future maintenance costs be provided to it (this time, indeed as a dowry) before it will accept responsibility for operating such waterways. Catastrophes would have to be covered by reserves, or insurance, just like most organisations do. Property income vs other income is, I believe, not much of a worry as this relationship has proved to be very stable in the long run. "Neil Arlidge" <[EMAIL PROTECTED]> wrote: >> If you have a third option, now's the time to put it forward. Any >> option requiring the government to promise and deliver more secure >> annual income will not be taken seriously, though. > >Why not?... UK / ROI governments are quite happy to TOTALLY fund Waterays >Ireland on a fixed term contract, with yearly inflation increases. I would >expect the grant that BW gets to be for a fixed term with inflation >increases. If things were set up like this BW would have no excuses! Neil, please stick to the real world. If you don't, sensible debate becomes impossible. If wishes were horses ... >BW have just had to admit they they diid'nt even talk with the Local >Government Association. In Britain, local government is a creature of central government. The latter considers the former's spending to be the latter's spending. It's no good asking junior for a handout if daddy won't give him the money. >BW is under the thumb of their property folk. And your evidence for that is? Warning -- OT >the riduculous mooring tenderings farce Yes. BW *really* ought to have used open auctions. All clear -- OT off >>> So BW pulled out of "Cotswolds" because it is "not the right time in >>> the development cycle"? >> >> No, because the government cut its grant, and its prospect of grants >> (plus a small difficulty in Wales). I really thought you already knew >> that! > >No I did not...It is due the reason above, concerning development cycles Ah, my mistake. BW has *not* had a major grant cut, then? >The time to buy property is not when it has "tanked", ie at start of slide >but after the slide has finished. If I can manage that with my property >portfolio, then I would think the experts at BW could do this. I believe you implied you thought that property values had already fallen. I was merely extending the logic of that assertion. >The trouble is they have their eyes set on only one ball in the air and when >it falls to the ground they are stuffed. I suppose that must mean something, but just what escapes me. >BW have not proved their worth to the government....but they will have their >financial reigns released and be allowed to borrow, to cover up their bad >financial management. I see. So the government rewards bad performance? Interesting theory. But things are sure to be alright, as it sounds like they will be getting royalties too, eh? . >We have just got to make sure the ugly duckling turns into a swan! How nice that we can end in agreement. Adrian . Adrian Stott 07956-299966
