British Waterways' directors, who give themselves hefty bonuses and fat salaries, are getting £1bn to continue their disastrous management of the canals, at the expense of vulnerable boat-dwellers.

Richard Benyon, Defra's waterways minister, announced this month that the government is to give a staggering £1bn to the Canal and River Trust (CRT), which at the end of February will probably take over from British Waterways (BW) to look after the 2,000 miles of England and Wales' canal system.

The idea of bunging £1bn of public money at such an incompetent and secretive body is astonishing.

Does it really need all that money? And will the spending of it be effectively scrutinised? On the evidence below, my feeling is: no.

Spending up, not down

In the last tax year, Defra gave BW its annual grant of just £47.4 million, a tiny fraction of the above amount.

I had understood that the reason for the decision to take BW out of public ownership, made at the time of the Spending Review, was to save public money, not to give it even more.

According to its published accounts, in the last year, BW made a profit of £16.9 million, compared to a loss of £15.4 million the year before.

How did it achieve this turnaround? By selling off into private hands, £11 million of publicly owned and historic canal-side properties, such as picturesque cottages, by slashing £9.5 million off the bill for much-needed canal maintenance, like dredging and leak repairs (despite a published justification for directors' bonus payments that it spent the same on maintenance as in previous years), and by imposing a freeze on most recruitment and all pay of employees for 2011/12.

High salaries and bonuses

Did the pay freeze apply to the directors' remuneration? Er, not exactly.

The accounts show that last year the CEO, Richard Evans, received £234,050 in salary, while the combined salary of all eight directors (one more than in the previous year, despite a claim in the annual report that it had made savings by "reducing the size of our management") was £1,399,250, with the value of their pensions starting at almost £5.4 million.

Then there are the bonuses, which, for 2010/11 totalled £58,111 (to his credit, CEO Robin Evans waived his, but then, with a salary like that, he doesn't need it).

As with Network Rail, there are serious questions about why a publicly-funded body's directors should have any performance-related bonuses simply for doing what they are supposed to be doing anyway, especially when they are the subject of such sustained criticism from those who navigate its waters and are most affected by their performance, and when their activities are not completely transparent and accountable.

Astonishingly again, although funded by Defra, no Defra official was on BW's Remuneration Committee, which decided these bonuses and was comprised entirely of board members.

Victimising its tenants

Instead of introducing cuts where those would be simplest and most effective, by streamlining its top-heavy management, the BW management seems to be at war with vulnerable boat dwellers.

According to the National Bargee Travellers Association, BW carries out routine and systematic harassment, threats of homelessness and actual evictions directed against the adults and children who live on boats on its canals and rivers.

"This harassment is sanctioned by the directors of BW but has no sound basis in law. If the landlord of a house treated their tenants in the same way they would be convicted of a criminal offence," they say.

This is as a result of the rule that a houseboat must not stay in the same place longer than 14 days; nor can they have postal addresses.

It means that occupiers of the boats are denied access to work, education, social security and housing benefit, especially where public transport is relied upon to get to work or school.

What's more, mooring fees have risen by twice the rate of inflation: 10%.

The situation for these people can only get worse if BW becomes a trust, and continues to enjoy its present draconian power, while becoming relieved from the normal exposure of a public body to Judicial Review. That usually acts as a deterrent to wilful abuse of powers and inappropriate decision making.

An indication of where things are headed is the call by BW this week for traders to take up mooring berths in London during the summer Olympics, presumably after clearing unsightly boat dwellers off them, as businesses will doubtless provide a more lucrative income.

Boatie people are sure that they and their craft will not feature in the property prospectuses after the great give-away, but the investors licking their lips at the idea of getting their hands on some of this extremely valuable property "might look less positively on the plundering if it were more publicly known that BW, or CRT, is a landlord to perhaps 25,000 citizens" says one of them, anonymously, in an email to me.

Failure of management

The author of this email pins the blame on the management team, which includes chairman Tony Hales, Evans and Simon Salem, all of whom were appointed by Defra, in its wisdom.

This team, in a recent poll by 'Narrow Boat World', a web forum used by boat dwellers, lost a vote of confidence by 3,742 against and only 83 in favour, revealing exactly how popular they are amongst the people for whom they are directly responsible.

This is the same team that will run CRT, despite much lobbying during the consultation period to force a re-selection.

Here's one more example of what will come: eight years ago British Waterways created British Waterways Marinas Ltd, (BWML) to buy up marinas "as an investment to provide income for maintenance of the waterways".

It has spent millions of pounds of money that could have gone towards the maintenance of the waterways in buying up 20 marinas to date, yet it has given nothing back to the public purse.

Boaters are so angry that they have issued a Boaters' Manifesto aimed at getting the management of CRT to listen to them.

Their concern "centres on the enormously expensive pay, pension and perks packages of the most senior directors and their willingness to grab bonus payments when staff are being penalised by pay rise well under the rate of inflation".

All they seek are basic amenities. Modestly, the manifesto calls for the CRT "to endeavour to help those who live on their boats by the provision of more residential moorings where needed and perhaps usable postal addresses (BFPO can do it for the forces), recycling facilities, more potable water and sewage disposal points".

Give boat-dwellers legal protection

BW's dislike for the residential boater comes from their mistaken perception that the presence of boats lowers the value of waterside property.

It's incredible to think that, if you live on a boat, its legal definition is still as a chattel, not a home.

For the Rosie and Jims of this world, life is far from rosy: they have no legal protection for their homes and most moorings have no security of tenure.

At the last count, there were over 100 court cases pending concerning appeals over wrongful eviction.

This law should surely be changed, and could be changed easily, by a simple amendment to the Housing Act.

This idea was mooted in 2004 during a public enquiry held by what was then the ODPM (Office of Deputy Prime Minister) about the 2004 Housing Act's legal protections being extended, having just included travellers and people who live in all varieties of static or mobile spaces.

John Keyes, who was a witness at the Parliamentary Waterways Group Public Enquiry scrutinizing BW in 2007, says: "Unfortunately it never came to pass, because British Waterways told the ODPM that if this did happen, it would respond by eliminating 6,000 moorings.

"The ODPM took the threat seriously, and their findings were never published.″ (If anyone can send me a copy, I'd be most grateful.)

The National Bargee Travellers Association (NBTA) therefore believes that BW should not be transferred to charity status unless and until specific measures are put in place protecting boat dwellers from harassment, unlawful eviction and homelessness.

Amongst other things, they are calling for CRT explicitly to be classified as a housing authority, and for legal recognition of the homes of boat dwellers on a par with that enjoyed by house dwellers. 

Effective scrutiny

Given all of the above, I am at a loss to understand why this new body needs £1bn of public money, or is even being converted to charitable status.

Part of this funding comes from giving away yet more property currently owned by taxpayers, worth £460 million, no doubt for the new Trust to at least partially sell off.

Benyon calls thist a "good deal for the taxpayer". In what world is he living?

He has compared the CRT to the National Trust, yet the latter is an entirely private organisation which takes care of the nation's heritage sites without the need for government funding.

Conveniently, Defra's ministers have decided to make the CRT only partially subject to the Freedom of Information Act, despite the fact that in the supplementary consultation Defra ran on the proposals last year, a very clear majority of respondents wanted the CRT to be fully compliant with the FOI Act.

Only CRT's "statutory obligations" are able to be queried by FOI requests, leaving most of its activities (such as the sell-off of assets) in the realm of secrecy.

Perhaps Defra's decision had something to do with the fact that British Waterways has been charged several times by the Information Commissioners' office with breaches of the Freedom of Information Act.

It was FOI requests that finally revealed that its board awarded the directors bonuses for last year despite it being recorded in the minutes of no less than three meetings of the remuneration committee that they would not do so.

The transfer of BW to charity status is proposed in Schedule 5 of the Public Bodies Bill. BW has secured an amendment (99A) to Schedule 5 that will allow a charity to exercise statutory enforcement powers including the power to seize and destroy boats that are people's homes, without payment of compensation.

Enforcement powers of this nature will therefore be exercised by a body that will no longer be subject to proper public scrutiny.

The order for BW's powers to be transferred to the charity will be subject to parliamentary scrutiny via a super-affirmative resolution procedure.

Scotland clearly sees the madness of this proposal; the Scottish Government is keeping British Waterways in Scotland and the Scottish canals in public ownership.

Why not England and Wales? Perhaps Parliament can still act at this point to bring some sense and publicity to this process, which has so far escaped the awareness of the mainstream media.