KPMG Report

A key part of the process to form the Canal & River Trust was to ensure there was a good understanding of the projected income and expenditure plans for the first 15 years of the Trust's existence. These projections would be important in guiding the Trustees as to the viability of the Trust.

In April 2011 BW commissioned KPMG to review and comment on the various models, projections and analysis prepared for the BW Board and the Interim Trustees of the Canal & River Trust. BW commissioned KPMG as the Trust did not then exist. KMPG addressed their report to the Trust and BW.

KPMG were asked to provide the Trustees with a sense check that the projections and assumptions were reasonable and consistent with the background data held by BW. KPMG were not commissioned to verify every income and expenditure figure because that would have been a huge and expensive undertaking.

KPMG conducted the bulk of their field work during 2011 based on early projections and modelling including the £39m per annum funding offered by government at that time. KPMG provided interim feedback by way of meetings with management and Trustees during 2011, which informed the discussions with Defra over increased grant funding.

The final report (now published) incorporates the agreed 15 year grant funding from Defra and shows why the Trustees and BW management consider the viability of the Trust has been secured until 2027.

A 15 year funding agreement from government, most of which is index linked, increased commercial income, including significant new income from re-investing the proceeds from the sale of Wood Wharf joint venture share and growing charitable income, all contribute to an improved maintenance and repair expenditure.

As the report says, "The level of waterway spend will increase from 82% to approximately 94% of the steady state requirements and lead to an improvement in the standard of waterway maintenance."

Although the condition of the principal assets (the largest structures like aqueducts, embankments and bridges) is forecast to decline marginally from the current condition, they will continue to be well above historic condition levels. For example, in 2003 nearly 30% of principal assets were in the two poorest condition grades D&E. In 2011 the figure is just below 18% and is now projected to never get worse than 22% during the next 15 years. The report does point out the considerable advantages of the 15 year funding agreement in respect of asset management when it says, "The greater certainty of the 15 year funding package from Defra has given CRT the opportunity to plan its repairs and maintenance in advance therefore allowing for operational efficiencies to be built into future planning".

The report also highlights the £2m per annum contingency built into the projections. Given that most recent breaches (e.g. Caldon, Stourbridge) cost much less than £1m to repair, the contingency is sufficient to cover most emergencies other than a major breach, when the Trust would, as BW has done in the past, redirect resources to meet these unexpected costs.

The headline income and expenditure figures from the report are attached. These show deficits in the first two years of the Trust because grant from government is not inflated until 2015/16, and fundraising in the first year is a cost before it makes a surplus from 2014/15 onwards. This deficit is projected to be covered by surpluses brought forward from the BW days.

Download the KPMG report


A report prepared by KPMG LLP (KPMG) solely for British Waterways Board and Canal & River Trust is available for reading and can be viewed here.  The KPMG report has been prepared on a confidential basis in accordance with terms of engagement agreed by British Waterways Board and Canal & River Trust with KPMG.  Readers are not permitted to copy, reproduce or disclose the whole or any part of the KPMG report unless required to do so by law or by a competent regulatory authority.

Following a request by British Waterways Board and Canal & River Trust, KPMG has exceptionally agreed to the posting of its confidential report on this website, on the basis set out in this Notice to enable readers to verify that a report on the matters discussed has been commissioned by British Waterways Board and Canal & River Trust and issued by KPMG, subject to the remaining paragraphs of this Notice, to which readers' attention is drawn.


KPMG wishes readers to be aware that KPMG's work for British Waterways Board and Canal & River Trust was designed to meet the agreed requirements of British Waterways Board and Canal & River Trust determined by British Waterways Board's and Canal & River Trust's needs at the relevant time.  The KPMG report should not be regarded as suitable to be used or relied on by any reader other than British Waterways Board and Canal & River Trust wishing to acquire any rights against KPMG for any purpose or in any context.

In consenting to the posting of the KPMG report on this website, KPMG does not accept or assume any responsibility to any readers other than British Waterways Board and Canal & River Trust  in respect of its work for British Waterways Board and Canal & River Trust, the KPMG report, or any judgments, conclusions, opinions, findings or recommendations that KPMG may have formed or made and, to the fullest extent permitted by law, KPMG will accept no liability in respect of any such matters to readers other than British Waterways Board and Canal & River Trust.   Should any readers other than British Waterways and Canal & River Trust choose to rely on the KPMG report, they will do so at their own risk.