British Waterways mulls move from state control into the “third sector”

British Waterways, the government agency in charge of regenerating Britain's canal system, is set to ask the government to allow it to become a voluntary organisation akin to the National Trust in a bid to avoid the forthcoming public sector spending squeeze, according to the Guardian.

The agency, which is funded by Department for the Environment, Food and Rural Affairs (DeFRA), is facing further cuts in its £74m annual grant which it claims has already fallen 47% in real terms since 2003.

Relinquishing state control would free the organisation to borrow money for long-term investment and accept public donations while continuing to receive government grants to cover the cost of its statutory functions. It would also enable the organisation to prevent the government from selling its property portfolio, which has an estimated value of £500m and generates income of £45m per year.

"Of course there are risks, but I believe it is a no-lose call, and something has to be done," said Tony Hales, chairman of British Waterways told the Guardian. "The waterways are not about to collapse overnight. But over 10, 20 years, if we don't accelerate investment, the network will deteriorate."

The proposals follow an 18-month consultation of users of the inland waterways. The government's response to the proposals is not yet known.