Whilst recognising that a second increase in fees this year is regrettable, we're facing significant increases in a range of its costs – notably the prices of energy, fuel, materials and other construction costs which are rising by more than headline consumer inflation rates, leading to a projected shortfall in our finances as costs outstrip budget projections and are forecast to exceed our income.
Additionally, the Government grant payment – which goes towards the cost of maintaining the waterways – is frozen this year (and hence declining in real terms) and until 2027. Unless measures are taken urgently by us to address its budget gap this year, its priority works could be significantly affected.
What increases are being made?
The rise follows the earlier increase in fees, also 4%, from 1 April. Consequently, boaters renewing their licences from 1 October will face a combined 8% increase. This will still be some way below current inflation of 9.4% and predicted to rise further. When the earlier 4% increase in boat licence fees was agreed in October 2021, UK inflation (CPI) was 3.1%, with some short-term increase predicted but nothing close to current sustained rates of inflation.
In order to reduce spending, we're scaling back on non-essential works and focussing on those which are required legally or which support navigation. Whilst this winter will necessarily see a number of planned works deferred, we will still deliver one of our largest programmes of repairs and maintenance to date. We're also making cost saving cuts more generally across the business and scaling back any discretionary activities; however the asset repair works are the predominant use of our funds, above the day-to-day cost of keeping the network open. In parallel, we're seeking to maximise revenue from our other income streams.
A very difficult decision
Richard Parry, our chief executive, said: “This has been a very difficult decision for the Trust. We recognise that our boating customers will be feeling the effect of inflation across their personal finances and a mid-year price increase will not be welcomed. But the highest levels of inflation in 40 years cannot be ignored and we are compelled to take steps to reduce the budget shortfall we now face, with our Government grant frozen since 2021, and with the combined 2022 licence fee increases remaining lower than the current inflation rate. We continue to prioritise our work to maintain and repair the historic canals and river navigations in our care, doing what we can to reduce spending in other areas and to generate income from other sources where possible.
“Boat licences account for around an eighth (12%) of the charity's annual income and help ensure that the vast amount of work necessary to keep the waterways available to boaters can be carried out. We will do all we can to support boaters who may be struggling with the cost of living crisis and urge them to contact our boat licensing team so we can agree how we can help them.”
Support for boaters
Boat licence fees rose by 4% in April 2022 and will rise by a further 4% from 1 October 2022 in response to the extraordinary increase in inflation rates. We will keep the situation under active review whilst the economic conditions remain volatile and will agree its prices from April 2023 in November, continuing to seek to balance the impact on boaters with the pressure that our finances are experiencing.
We will continue to support boaters who may be struggling to pay their licence fees on a case-by-case basis. This may include arranging flexible payment plans and signposting to relevant services, for example the Waterways Chaplaincy, local authorities and Citizens Advice. For more information visit our vulnerable boaters page.
