C&RT’s award for ‘Openness’ explored

October 2018 - It has been a week since the Canal & River Trust proudly announced it had ‘won the award in the charity category for Openness in Reporting at the Building Public Trust in Corporate Reporting Awards 2018’

To be honest, being told that C&RT was an organisation ‘leading the way in the openness of their communications to stakeholders’ took The Floater a little by surprise.

Is this the same organisation that threatened one of our boater journalists with legal action for asking a Freedom of Information question designed to explore inconsistencies in its annual report?

The same organisation that claimed asking FoI questions was harassing its staff and causing them distress?

To clear up our confusion we have looked more closely both at the organisation presenting the award and the real life experiences of people trying to question the detail of C&RT’s annual report.

The award comes from one of the big four accountancy firms PricewaterhouseCooper (PwC) which has it’s own problems with annual reports and the figures that go into them. Former National Association of Boat Owners vice chair, Simon Robbins, has recalled that PwC was implicated in the recent BHS scandal and fined a record £10m by the Financial Reporting Council over 'seriously poor audit work' at BHS. BHS entered administration in 2016 with debts of £1.3bn, endangering 11,000 jobs and leaving a £571m pension black hole.

The department store chain collapsed one year after Sir Philip Green sold the group to Dominic Chappell for just £1, following several loss-making years. BHS had signed off BHS as a 'going concern'.

Simon also found that The Financial Reporting Council had fined PwC a further £5.1m recently for 'seriously poor audit work' at RSM Tenon and also that it had been ordered to pay hundreds of millions of dollars in compensation in the USA (again due to poor audit work).

PwC's poor recent record did not stop Sandra Kelly, C&RT's Finance Director, and a former PwC employee, from accepting the award for its 2017/18 Annual Report (which includes its audited accounts) at a reception. Maybe she thought doing so wouldn’t be questioned because C&RT's accounts are not audited by PwC.

Sandra Kelly said: “Transparency and clarity lie at the heart of our reporting. We want everyone to be able to pick up a copy of our annual report and understand the triumphs we’ve celebrated and the challenges we face. In an uncertain economic and political landscape keeping our existing supporters informed, while also reaching new audiences, is vital to securing the long-term future of the waterways. Our reporting has to tell the story and we are pleased that the effectiveness of our communications has been recognised.”

Back in the real world it is extremely difficult to get realistic and honest figures from Canal & River Trust.

For example, The Floater’s Allan Richards has just discovered that volunteers cost the Trust a staggering £32 for each hour given according to C&RT's after digging into the last annual report. The discovery comes following a boater's request for The Floater to investigate why C&RT was taking so long to provide a detailed breakdown of its spend on maintaining its waterways last year – more on that later.

At about the same time that C&RT was boasting of it’s openness, The Floater revealed that C&RT's claim of 490 days lost to unplanned (i.e. emergency) closures in 2017/18 was just 19.7% of the true figure of 2,482.

Not too surprising that C&RT's press release titled 'Canal & River Trust wins award for Openness' was greeted with disbelief, derision and some anger by boaters posting on Facebook. Nobody who posted had anything positive to say about it.

For years in annual reports C&RT has overemphasised its mediocre achievement whilst seeking to obscure its failings.

One of the so called 'triumphs' C&RT has celebrated in its 2017/18 annual report is volunteers clocking up more than 600,000 hours. However, comparison of the National Trust of the Waterways (as C&RT liked to call itself years ago) against the real National Trust puts this 'triumph' into perspective - 600,000 vs 4,600,000.

The exact figure from page seven of C&RT's annual report is slightly higher at 616,300 volunteer hours. However the cost over the year for volunteers (supervision, volunteering management, training, safety, travel, insurance) is a staggering £19.7m according to figures on page 39 of the annual report.

The maths for working out how much C&RT is spending for each hour a volunteer works is quite simple - C&RT spend per volunteer hour is 19,700,000/616,300 = £31.965. (Let's round it up a few pence and call it £32)

This figure has not been highlighted anywhere in the Annual Report, yet it raises an important question - Are volunteers actually bringing £32 of charitable benefit for each hour worked?

To answer this we will consider volunteer lock keepers. Page nine of C&RT's annual report says C&RT have 914 of these. A crude estimate is that they provide around half of C&RT's 600,000 volunteer hours. Whilst a very few may be performing duties previously carried out by full time lock keepers and seasonal lock keepers, the fact is that the vast majority man flights that have not had a lock keeper for years. Whilst they might very occasionally carry out light maintenance tasks the focus is on 'being an ambassador for the Trust' and 'promoting our brand'. They do this by chatting to visitors and providing assistance to boats at locks after (hopefully) asking if help is required.

Is 'being an ambassador for the Trust' and 'promoting our brand' really worth £32 per hour? Certainly from a boaters perspective, these volunteer lock keepers provide very little maintenance effort that might justify £32 per hour. Also as they are manning lock flights that were previously unmanned, thus C&RT staff are not freed up for other duties.

Turning to another form of volunteering, over 80,000 children participated in C&RT ‘Explorers’ face to-face education sessions during the year. How many volunteer hours that entailed is not known but it will be substantial. Unlike nebulous volunteer lock keepers, it can be safely said that this type of volunteering forms part of C&RT's charitable objects. However, from a boating perspective this type of volunteering provides no contribution towards maintaining our canals.

Of course there are volunteers who are actually helping to maintain the waterways. They make a valuable contribution and this is appreciated by boaters. ... but is this contribution really worth £32 per hour?

C&RT's 'challenge' here is one of credibility. The situation is similar to its claims regarding 'Friends'. Every year, the Trust claims more 'Friends' but fails to rise to the 'challenge' of admitting it is still losing money attracting donors. It also fails to rise to the 'challenge' of of admitting that its target of 100,000 donors in 10 years will not be achieved.

In the case of volunteers, it claims more volunteers each year as a 'triumph'. However, it falls down on the significant 'challenge' of justifying a £19.7 million spend on volunteers against, say, the £7.7m spend on dredging or its £7.8m spend on vegetation management.

Put another way, if it got rid of those volunteer lock keepers whose contribution to the maintenance of waterways is minimal, would the savings allow it to double its spend on dredging?

As to the boater mentioned earlier, who asked The Floater to investigate why C&RT was taking so long to provide a detailed breakdown of its claimed £132 spend on maintaining its waterways - it would appear that C&RT is including significant non maintenance expenditure in the figure given. The way the boater had made his enquiry would, if answered honestly, reveal this. To give but one small example, C&RT has wrongly included the full £19.7m spent on volunteering as maintenance spend

Fairly obviously, money spent on volunteers carrying out ‘Explorers’ face to-face education sessions is money spent on education. It is not money spent on maintaining the waterways! Similarly, the majority of money spent on volunteer lock keepers is not money spent on maintenance.

Never mind. Pricewaterhouse Cooper clearly feels that such minor dishonesties do not prevent them making the award to Canal & River Trust – and who are we to question such paragons of virtue?

Photos: (1st) C&RT's Sandra Kelly accepting the award from PwC, (2nd) Volunteers working with children - admirable but not part of the maintenance budget, (3rd) The cost of volunteers set out in the annual report, (4th) The duties of volunteer lock keepers - nothing to do with maintenance.

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