Lottery deal and borrowing boost coffers
As the Canal & River Trust seeks to build up its income for the future (see above), it has begun borrowing money to boost its commercial investment portfolio (and the rental income it receives from this), while the support it receives from the People’s Postcode Lottery has also risen.
CRT’s chief executive Richard Parry told Canal Boat that some £150m of ‘private borrowing’ over a 25 to 35-year timescale had been secured via a ‘bond issue’ at rates of around 3 percent. He explained this is “not money to spend”, but to put into long term investments (such as property) which will bring in nearer 6 percent, and that the net extra income to the Trust (once existing short-term borrowings are repaid) would be around £2-3m per year. The Trust stressed that it “doesn’t have to do this” as a result of any shortfall, but that “it makes good investment sense” to do this, “in common with other borrowers such as housing associations”, in a way that was not available to its predecessor British Waterways.
Meanwhile the People’s Postcode Lottery’s backing has also boosted CRT’s income. Since becoming a PPL ‘direct beneficiary’, the Trust receives income from two draws per year run entirely for its benefit, resulting in a total contribution of £1.7m per year. This year’s is being largely spent on work at Marple.