Friday, 6 March 2015

Democracy and the Inland Waterways

I have been wondering to myself, how well has the Trust been performing since its inception. Three years in or 20% of the period of time allocated by the government for funding. The plan is that the Canal and River Trust (CaRT) will be self funding by the end of the period. Has the plan worked and has there been in the intervening time period, any successes to provide any reassurance of a positive future?

A Brief History in Time
The creation of the Trust came as a result of government policy for cutting costs. Which became better known as the 'Bonfire of the Quangos'. The old British Waterways was highlighted as being one of the Quangos at risk. In all likelihood the BW management would have gone to the conflagration and the assets would have transferred into the Environment Agency. There was a stay of execution as the old BW management cast around for a salary and pension saving alternative. Expediency drove the Government into publishing a consultation document on the future of the inland waterways titled 'A New Era for the Waterways' way back in March 2011.

There were grandiose claims for the required funding, which proved to be just that. People with experience and knowledge of the funding gap highlighted that the level of funding accepted was insufficient. The trust had to go back cap in hand to ask for more.

The All Party Parliamentary Group on Waterways (APPWG) added its weight to finding a future for the waterways. The APPWG gave a recommendation to the government for an increase in the funding. The APPWG also issued an invitation for both written and oral evidence from interested parties. The APPWG held two hearings where it took direct evidence from witnesses. Some of the witnesses brought with them a wealth of relevant expertise and experience. These hearings took place in May and June or 2011.

The APPWG then issued a Memorandum where it reported back on its findings. The memorandum was published July 2011. The APPWG memorandum was titled 'The Future of The Waterways.' The document highlighted the discussions and deliberations that had taken place. It also set out some of its key findings for the running and financing of the new Trust.

The Future of The Waterways
The memorandum now provides a good document with which to asses the Trusts performance so far. First it will be interesting to evaluate how well the Trust has taken on board the wishes of APPWG and accepted the knowledge and opinion from the highly regarded expert witnesses.

In the introduction to the Memorandum the key issues were highlighted as being a fundamental concern of government. There was an expectation and a principal that the Trust should become the 'National Trust for the Waterways'. This was not just in name, this was in ethos which would obviously include the business model.

There has been a great deal of interest in the proposition that our canals should be moved from being, in effect, 'owned' by a Government Department to being a sort of “national trust for the waterways” which is independent and structured as a charity or trust or mutual organisation. Many questions have been asked: would such a new body release public energy or face significant and difficult challenges?

The All-Party Parliamentary Group for the Waterways decided that the best way to make a constructive contribution was to undertake hearings on the two most significant topics of the changeover in order to help to answer these questions, those being governance and the financial arrangements of the new charity. Rt Hon Alun Michael MP, Chair All-Party Parliamentary Waterways Group

In clear concise and unequivocal language the expectations of the APPWG were set out. When it reported upon the findings of the evidence taken from expert witnesses. The memorandum reflected the thoughts of the APPWG after all the evidence had been weighed and given due consideration.

The memorandum stated 'We accept the practicality that the New Waterways Charity should begin life with fair representation of stakeholders but we believe that a membership model of democratic stakeholder representation to Council should be developed.'

National Trust for the Waterways
So the APPWG had set the agenda for the future. One in which there was a guiding principal of building upon a democratic membership. Which in turn it said would lead to stakeholder representation. The APPWG was abundantly clear on this guiding principal. There it was, a wonderful prospect of a national charity, built around the waterways. Working on the same ethos as the National Trust. Which with few exceptions everyone thought was a perfect exemplar.

However, the thought of the Trust being built upon democratic membership did not sit well with some. Subsequent events have proven that the democratic membership was to become biggest glaring and deliberate omission in the make up of the Charitable Trust and it continues to this day.

Democratic Membership
At the time there had been some significant opposition voiced to the whole idea of a democratic membership model. In an effort to spell out in simple terms. The APPWG laboured the point when it said 'We believe that membership has so much to offer the new organisation in terms of engaging the public and developing a sense of ownership that there should be a clear timetable for moving to a full membership model.'

There it is, in plain and simple language. 'A clear timetable should be put in place for moving to a full membership model.' There were no ifs or buts, just a direct statement. I wonder if anyone has seen this mythical timetable?

The Trust still stands opposed to the democratic model of a membership. A membership that could easily number in the hundreds of thousands. Made up of boaters, birdwatcher, walkers, cyclist, conservationist and fishermen. A whole myriad of people and organisations that could contribute and at long last feel ownership. This however can only come about if all interested parties have the option of becoming a paying member. Which would also bring with it a significant funding stream. Many like me were confused why there was this opposition in some corners for democracy. Opposition to what the APPWG and all the evidence of the experts pointed to. The common thought was being accountable to the membership and that the membership would be able to vote on the make-up of the governing council and trustees.

So the evidence gained from years of experience from experts in the National Trust and other charitable institutions was weighed. The memorandum highlighted the importance it placed upon the National Trust experts evidence. The APPWG actually stated it wanted to create the equivalent of the 'National Trust for the Waterways.' Here was a once in a lifetime opportunity. There was a distinct prospect of fulfilling the hopes and aspirations of the early pioneers of restoration such as Aickman, Rolt and many others.

Dame Fiona Reynolds (Director General of the National Trust) and Paul Boniface (Secretary of the National Trust) informed the APPWG that the structure and organisation of the New Waterways Charity as proposed in the consultation document suggested over complication and a lack of clarity. It needed to be simpler in terms of governance and in identifying accountability within the organisation. There seemed to be imprecision about the roles of the Council and the Board of Trustees and confusion over the role of Local Partnerships.

If ever there was some advice to listen to it came from the National Trust. Dame Fiona is obviously very astute and she and her colleague identified almost from the start. That the Local Partnerships would be confused. That situation has not changed, if it has changed in any way, its certainly not for the better. The promised £800,000 a year contribution by each partnership looks to be an extremely unlikely prospect. The promised self sufficiency of funding by the partnerships by the end of 2014 has not happened. The partnerships have failed completely to even partially fulfil even the minimal expectations. The theme of a democratic membership, certainly does not stretch to the make up of the Waterways Partnerships either.

The Evidence Builds.
Other people offered their considered opinion which built upon years of expertise. Cliff Mills a Practitioner in the law and governance of co-operative, mutual and membership based organisations. Principal Associate with Mutuo. Consultant with Capsticks Solicitors LLP and Cobbetts LLP added to mounting evidence for a democratic membership.

Cliff Mills told the APPWG about his experience in setting up mutuals and membership-based organisations. He said that he was also struck by the potential for engagement with the wider community. He believed that the statement of intentions in the consultation document – with membership as an option for the new body to consider later on – was wrong. The new body needed to start as a membership based organisation to generate engagement – membership was the point at which the public could become engaged leading to a sense of ownership. Unless membership was built in from the start of an organisation it could be very hard to move to membership later on.

But then I suppose the Trustees under the chairmanship of Tony Hales must think that Mr Mills is only an expert in setting up and advising charitable organisations. After all, what would he know when compared to the experience in the third sector of the trustees. I bet Mr Mills if asked, would now be saying – I told you so!

Michael Stephenson (General Secretary of the Co-operative Party) questioned the detail of the governance proposals. He told the APPWG that the proposals as they stood were 'a missed opportunity' and could be more ambitious. The previous administration had favoured the creation of a mutual rather than a trust. The mutual model would allow for a greater involvement of ‘membership‘, and allow members a more direct say over appointments and representation.

In a Pickle
The grand plan for the Trustees is based upon – recruiting friends. The problem is that the Trust seems to be unable to find friends in sufficient numbers. Not only that but it has thrown a huge amount of our money into the discredited chugging on the high street to recruit the elusive friends. The chuggers however soon went bust and so the Trust now forlornly chuggs along the towpath. If chugging stopped people from entering town centres – think what it must be doing for towpath visitor numbers.

Cliff Mills continued 'If the design of the organisation was right from the outset it need not be incompatible with a charity but accountability would be undoubtedly improved through membership. Under the currently proposed constitution arrangements, it seemed that preservation was fundamental to the purposes. But the opportunity to challenge, change and evolve would be lost with this model and there was a danger of preserving something in aspic. Membership would allow more freedom to direct evolution of the waterways in a positive manner.'

I think that the above is a pretty positive statement of how things would fail to progress, from his considerable experience. I quite enjoyed his metaphor of the Trust ending up like a specimen in a jar and pickled in Aspic.

Mr Mills continued that in his opinion there was a danger that failing to adopt a membership structure - at least in the sense of identifying clear stakeholder representative constituencies that could generate elected representatives to Council - could result in bad publicity and be seen as a device to cling on to power. In effect it would hold at arm’s-length those who might benefit the new organisation most through their enthusiasm and potential financial contributions.

In a short and succinct statement, Cliff Mills had highlighted everything that could go wrong and which prophetically has gone wrong.

But Mr Mills is only an expert with considerable experience in the third sector. The trustees however, have been providing at best a lack lustre leadership. Predicated upon the flawed supposition that they know best.

Adopting a democratic membership has envisaged by the APPWG would have most likely led to the removal of poorly performing trustees. What was it again that Mr Mills said 'could result in bad publicity and be seen as a device to cling on to power. In effect it would hold at arm’s-length those who might benefit the new organisation mostly through their enthusiasm and potential financial contributions.'

The Minister Weighs In.
The APPWG memorandum also went on to say that 'In the light of the evidence we conclude that following the route outlined in the consultation document (setting up a governance structure which initially does not allow for membership) is likely to foster a perception of a lack of democracy and public engagement and to engender a concern amongst stakeholders that the new organisation is British Waterways under another name.

This is a concern [the lack of democratic membership and a British Waterways continuation] that we note that the Waterways Minister is on the public record as being keen to wish to avoid:

The Waterways Minister said in answer to a question from an MP. 'It is vital that we are extremely careful to ensure that we receive the best advice and get the correct model. I can assure her that officials in my Department are working hard on the issue and are committed to it, although we shall have a difficult time ahead with the comprehensive spending review, which I shall talk about in a moment.

We would have to have a completely new board or council that would shape its own future. It would not be British Waterways by another name, but a new structure, in different hands altogether. We do not aim to impose a particular model for a new civil society body, so we will work up different options in partnership with stakeholders. Citation: HC Deb, 7 July 2010, c501

The memorandum also went on to say Once an organisation is set up it can be very difficult for that organisation to then move towards a membership model at a later date, however good the original intention.

We recommend that the Charity should begin life with a Council that comprises members that are elected by the relevant organisations where that is possible, and with representatives of other interest groups provided for through nomination in the first instance; and that the process and timetable for achieving a fully elected Council, and moving the Charity to a full membership organisation, should be incorporated into the articles for the New Waterways Charity and be a required milestone in the Government contract with the Charity.

The section on governance finished with the following. We recommend that the Charity should begin life with a Council that comprises members that are elected by the relevant organisations where that is possible, and with representatives of other interest groups provided for through nomination in the first instance; and that the process and timetable for achieving a fully elected Council, and moving the Charity to a full membership organisation, should be incorporated into the articles for the New Waterways.

The Story Continues
There are many thousands of charities in the UK. England and Wales. The Charities Commission role is to regulate and monitor their charitable activities. The Commission have conducted their own regular research into the performance of Charitable Trusts and Mutuals. In particular to their structures and make-up. The research from the Commission was available long before the trust came into being. The scope of the research was not limited to the performance of the exemplar National Trust. The Commissions research was - independently conducted by Mori – Furthermore it was conducted across the whole spectrum of third sector charities.

So you might conclude that the Charity Commission would know a bit about the best way to run a charity. Many charities are run as a business and in some cases could legitimately be described as being - a very big business. The Canal and River Trust with its assets is a multi Billion pound, third sector, business operation, enjoying what many other charities would love to have and that is a monopoly position.

Speaking at the Ascension Trust Practitioners Conference in Manchester, Sam Younger urged charities to respond to public expectations by being transparent and accountable:
'In all areas of life, the public expects access to more, and more accessible, data. Trustees need to respond to that. Trustees should ask themselves: 'what do our donors, our beneficiaries; our partners expect to know about our work?' Organisations - and charities are no exception here - sometimes fear that revealing too much exposes them to risk, for example to the risk that the information may be misinterpreted or misused. My experience is that the occasions where this is indeed the greatest risk are relatively rare.
Failing to be transparent, allowing speculation to build, is often the greater risk, especially in the long term. My view is that so long as trustees have followed our guidance in making their decisions, they should, in most cases, feel able to be open and transparent about those decisions. And better still - share the information before they are asked in the first place."

This is obviously an ethos that is not shared by the Canal and River Trust board of trustees. Time and again information is published late if at all. The on line information is quietly removed at the first opportunity from public scrutiny. The latest trend seems to be wholesale redacting of information. The drawbridge is up and firmly in position at Ivory Towers and the suspicion of the public is at Defcon One.

80,000 Charities Have a Membership.
Membership is a common governance model in the sector and its popularity looks likely to continue. The Charity Commission estimates that approximately 80,000 charities have a membership structure. Their research indicated that charities with members overwhelmingly saw the role of their membership as a positive one, with 84% of charities with individual members and 81% with corporate members stating that their members made a useful contribution to the running of the charity. Their findings also highlighted that membership charities also receive significant wide-ranging benefits from their members.

Charity Commission experience indicates that those few charities that do run into problems with their membership are likely to have one or more of the following features: The trustee body puts up barriers to membership involvement, either deliberately or inadvertently. The charity's membership lacks diversity so the trustee board is self perpetuating or change-resistant and unrepresentative of its potential beneficiaries. Members or trustees deliberately abuse voting procedures and rights.

There is very little I can add to what the expert witnesses provided and the Charity Commission have published from conducting research into charities in the third sector. I constantly have feelings of 'deja vu' about the APPWG warnings and what the Charity Commission have published as being areas of deep conern for the wellbeing and governance of charitable trusts.

The Epilogue
So here we are in 2015 with the benefit of 20:20 vision. Three years forward and a whole generation backwards. The public face of the Trust tainted forever. Through the richly deserved bad publicity, gained as a result of towpath evictions of vulnerable boaters. The black hole in the maintenance budget grows to a gaping chasm. Where in access of £130 million a year is needed just to halt the deterioration. And about £500 million more is needed to put things right. Boaters increasingly disenchanted despite the best effort of the new CEO to meet and greet. The promised openness and accountability proving to be little more than a fig of the imagination. Meeting minutes filled with redaction after redaction. The electorate who would form the core of a democratic membership not allowed to know what their representatives who they elected are doing.

Each time I read about the Trust, I'm reminded of J M Barrie's book about Peter Pan and the shenanigans that took place in Never-never Land. The book was a personal favourite of mine as a child. Because it is full of villainous characters, fanciful flights of the principal character and the twists and turns of the unravelling plot. Which as a story line, can found in all good fairy stories. The nautical flavoured plot came complete with a bumbling ships crew and a certain accident prone, prosthetic wearing Cap't Hook.

Pirate Hook was to be found blindly issuing commands and edicts to an ever bewildered crew. While he stood resolutely, but completely out of touch, at the helm of the fast deteriorating and leak filled Jolly Roger. While at the same time, being in command of a sinking ship. The Cap't, with furtive backward glances over his shoulder, was being relentlessly pursued by a crocodile. One which came with an inbuilt alarm clock.

If you listen carefully, you can just hear the feint Tick Tick Tick. However, that's not the crocodile that's catching up with Hook. That's the sound of time running out for the Trust. Maybe its time for another bumbling fairy tale character to walk the plank!

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