Funding the Canal Restoration
The initial studies by WS Atkins outlined the design and projected cost of the complete canal line analysed into sections. These studies suggest a total current cost for restoration of the canal line at around £40m. Costs were calculated carefully after considering structures such as lift bridges, lock repairs including new gates and digging and lining the canal along the designated route. Much of the original clay will be preserved, but assumptions have been made that the canal will need to be built to “modern” standards to minimise future maintenance. As the canal has been filled in along its length it contains an estimated 7m tonnes of spoil, which where tested along the line has proved to be inert and therefore potentially saleable. Contaminated spoil as found in the Sandiacre lock landfill site will represent a potential increase in Atkins costs.
Sources of funding of the total will be obtained from a number of potential areas including:
- Gifts of land worth up to a total of £3m
- Sale of Spoil of potentially £7m dependent on quality
- Grants secured from Heritage Funds such as the Heritage Lottery Fund
- Grants from Community based funds often influenced by local authorities and designed to encourage employment or quality of life improvements
- Land fill Tax Credits
- Private sector funding for commercial projects including S106/CIL
- Commercial loan finance
The approach to funding at Draycott is to secure funding from a range of sources. Here the canal itself will be funded primarily by grant funding, supported by public donations. The Canal Cottages building can, however, can be financed by development loans as the asset being developed retains a commercial value and provides both tangible security and possible income generation to service the loan. The two projects running together may also generate other opportunities so that the final refurbishment of the cottages shows the local heritage, and may therefore be funded by heritage based grants.
In Spondon, a developer has proposed plans to build more than a hundred houses on a large plot adjacent to the canal. By building a section of canal, the developer can reduce the required cost of building a balancing tank to deal with rainwater flooding; using the canal land as part of the “leisure” provision and sell properties close to the canal for a premium, thereby generating more profit and providing a “free” section of canal.
The availability of funding is a key driver to choosing which projects to pursue. We need to operate in a planned but opportunistic manner. Having a strategy thought through for each section allows the Trust to respond to any opportunity that arises.
One thing that is certain is that the steady progress of each section put back into water underpins the support for the next section. Demonstration of the benefits in one section encourages the next and the financing challenge becomes easier.