What is the 50 year commitment that could cost Calderdale tax payers £27m?

Calderdale Inside Out investigation reveals huge cost of inflation-linked Canal and River Trust maintenance deal struck over 25 years ago

An agreement supporting a Millenium Commission grant for the Rochdale Canal could cost Calderdale tax-payers £27million. Analysis of data in CIO’s data journalism project “Council Money” shows Calderdale tax payers paid £1,901,061.28 in the 25/26 financial year covering four years of invoices. For context last year’s budget deficit was £7.919m, so the Canal and River Trust payment represents 25% of that number.

The 50-year annual maintenance agreement began on 1 January 2002 with an index-linked contribution of £214,500, meaning the total due for 2026 will be around £530,000. 

The payment is Calderdale’s contribution towards maintaining the Rochdale Canal. The long-term maintenance funding agreement was a condition of the Millennium Commission’s National Lottery restoration grant handed to the then Waterways Trust to restore the historic canal. The body was acquired by the Canal and River Trust in 2011. 

Concerns raised in 2023

Calderdale Council halted payments in 2023 after concerns were raised about the lack of maintenance reporting demanded by the 2002 agreement and the indexation causing the annual payments to spiral. A council spokesperson said the maintenance report was important so “value for money could be evidenced”.

They added: “The conclusion of the challenges raised were that a quarterly report on activity was reinstated but there was no basis upon which we could give notice on the agreement.”

The review brought a change in reporting. According to the council, quarterly reports on activity were “reinstated”.

By 2052 (assuming an average inflation rate of 3%) the total bill will reach £27 million.

A multi-million pound canal deal for a multi-million pound charity

The payments originate from restoration of the Rochdale canal between Sowerby Bridge and Rochdale at a cost of £23.8 million. Major funders included an £11.9 million Millenium Commission lottery grant with English Partnerships providing £10.8 million. The remaining £1.1 million was topped up by Rochdale and Oldham councils. But a condition of the funding was that Calderdale, Rochdale, Oldham, and Manchester would contribute towards ongoing maintenance. A 2011 Calderdale Council scrutiny report observed that each council’s contribution was in proportion to the length of the canal within their respective authorities. 

When that deal was struck council finances, although under pressure, had the comfort of a Blair/Brown government maintaining 60% central government grant funding. And this amount was steadily rising under New Labour meaning local authorities felt a little more secure in their future funding, and were discinclined to stockpile, and more amenable to investing in community assets. Today central government supplies between 30-50% of local authority funding  - the amount varies based (mostly) on how education provision is made. Over the past twenty years the burden of local service provision has shifted from a central funding model to one mostly funded by council tax.

Despite the changing context of council finances, and given that last year the Canal and River Trust’s income jumped from £232m to £255m – a 10% uplift – council insiders tell us that no recent attempt has been made to re-negotiate the terms of Calderdale Council’s maintenance deal.

Long term funding pressure

The inflation linked agreement presents a headache for the Reform administration as it grapples with a projected 2030 deficit of £18m. 

But it’s not the only substantial annual payment the council has to make.

Calderdale Inside Out has uncovered a series of payments relating to long term commitments from debt interest to grant payment distribution.

In 25/26 under a long term grant-making agreement local charity Community Foundation For Calderdale was handed £2,159,874  as part of a deal to provide Voluntary Sector Commissioning Programme from 2024–29. The Piece Hall was promised £1,130,135 under a five year deal with annual payments agreed at £226,027. North Halifax Partnership’s fee for running various council services was last year £4,451,592. And debt interest payable across various council loan facilities last year came in at £7,024,000. 

This list is not exhaustive, but an indicator of the pressure Calderdale Council faces as a result of long-term financial commitments, some of which stretch back over 20 years.

The Canal and River Trust has been approached for comment.