West Somerset Railway General Discussion

The minutes read as follows .....

"A question was asked about the outcome of the CHRF3 funding application. Steve Williams confirmed that the bid had been unsuccessful but only because the Railway was now deemed to be in no need of immediate financial support. Members commented that this should be taken as a positive and that the Railway was recovering. It was felt that the Railway could now survive the winter period."

 

The most recent round of CRF money was restricted to, from memory, “organisations that might otherwise be at risk of financial collapse within twelve weeks” or some such wording. Firstly, it is clearly a good thing that the WSR didn’t qualify, but even applying would have been a big call for any organisation that chose to do so.

With heritage railways that have costly, but long-lived, assets, there is wide gap between "money urgently needed" and "imminent danger of collapse", because you can always defer costly maintenance. Not a long-term strategy, but certainly useful short-term tactics. I think the 3rd round CRF money was really aimed at cultural organisations that would find it difficult to cut costs rapidly in that way, for example, an orchestra or theatre group reliant on non-existent bookings but which would have an ongoing wage (and maybe building costs) to service while receiving no revenue income.

Tom

 

I am puzzled. Does this mean that the SVR, CVR and RHDR were in imminent danger of collapse? (or is this a different CRF R3?)

 

Or did they do something we didn't ?

 

I thought that was the case, but maybe the wording was slightly different.

Currently, the scheme says:

Who can apply: Cultural organisations that are properly constituted with a governing document and are able to demonstrate, via cashflow forecast, they are at risk of ceasing to trade viably within 12 weeks of the point of application.
https://www.artscouncil.org.uk/CRFgrants
​

It might be I’m mistaken and that stipulation has been tightened recently, and it was more open last year.

Tom

 

I read that as organisations that are risk free cannot apply. SVR etc. appear to have successfully navigated their way through that condition i.e. they carry an element of risk.

 

It looks like there are three possible scenarios with the WSR:
Either the railway has, between applying for the grant and the application being assessed, been in receipt of a large sum of money, in which case well done to all concerned,
Or the railway was never in any real financial danger, in which case someone was being economical with the truth,
Or the application failed to put across the actual parlous state of the railway's finances, in which case boo to whoever put the application together.

 

Picking up the threads of conversations from elsewhere and other railways, I note that:
"a completely new plan would be developed in early 2022 with a more commercial orientation and focus on financial viability. A new business model was in development and the new Plan for the next three years would take into account the realities of operating within a pandemic influenced environment [..] the new model needed to be much sharper and commercially orientated. Running trains with empty seats was no longer an option. COVID arrangements had changed things for the future."

As @Sidmouth and others have said elsewhere, this is something that's likely to become widespread across heritage railways.

Also:
"The National Lottery Heritage Fund had advertised a new scheme which was very similar to the previous CHRF1 scheme. The proposals were being considered in time for a new bid by 22 January 2022."

 

Well, there hasn't been an announcement so I suspect that 1 isn't what happened. It is clear that The line was in a parlour state financially before the current management arrived which rule out 2 so my punt is 3

 

If the criteria are failure within 12 weeks, that is a pretty major threshold to declare.

 

Very true and it would almost certainly put you on a cash with order basis with most suppliers, and if not that certainly shorten your agreed credit period. It is sort of like running the white flag half way up the pole.
It would of course need a supplier to be savvy enough in the first place to research if you had applied, let alone been successful.

 

The PDG minutes contain all sorts of interesting snippets such as.... "It was added that, overall, the WSR had performed reasonably well during 2021. Public comments of financial ‘doom’ had not happened."

From where did those public comments of financial doom originate ? One need only look as far as June 2021's official One Million Pound appeal page for words such as "urgent", "emergency", "survival", "vital" and "SOS". To have pulled back from the brink and eliminate any risk of closure is an incredible turnaround. Well done to those who pulled it off.

WSR launches new 1 million Emergency SOS survival fund. (west-somerset-railway.co.uk)

 

Do I see some resemblance between pronouncements from the WSR's management and certain politicians? Tell them what they want to hear, and never mind if it contradicts the one you told yesterday to someone else.

 

Pleased to see WSR.Org back up and running and headlining with a very upbeat statement from the Railway.

 

"officials had budgeted for a loss for last season of well over a quarter-of-a-million pounds which was reduced to £55,000. A record-breaking month of Santa Specials and new Winterlights trains brought in around £271,000 and £204,000 was clear profit."

I'm surprised by a £204,000 profit on a 75% margin for Christmas services but, taking it as read and using what was published before (attached), it implies a loss in excess of £100k through late summer and autumn. Final figures will be an interesting comparison

 

It certainly poses some interesting questions about how costs are allocated.


Sent from my iPhone using Tapatalk

 

My thoughts too.

It does seem that a very simplistic or superficial view is taken where the railway's finances are concerned.

To me, "clear profit" implies all necessary costs have been taken into account.

Does this include whatever contribution is needed towards ongoing capital expenditure such as track, stock and loco renewals and repairs, or is this element conveniently ignored in an effort to paint a positive picture?


It does seem to me that the financial picture is something of a moveable feast, depending on the needs of the message of the day.

 

I'm not going to criticise an organisation that's in dire need of good news for using a direct cost approach to reporting the outturn of an event. After all, at one level - and probably a level that will matter to a lot of the people who made December happen - it generated £200k more than it cost to put on. £200k cash that will help the railway deal with the various works it needs.

A clearer picture - and actually what matters - will emerge from the annual accounts, in which we'll be able to see how the company as a whole performed through 2021.

However, in the context of the yo-yoing of WSR plc finances over the past few years, it's unsurprising that there's a fair bit of scepticism about this figure. Perhaps a wee bit more consistency of messaging would be helpful.

 

The PDG minutes seem to suggest that the good news scuppered the bid for funding. The £200k (minus any operating costs that were ignored) is good news but may not have been reported in the best way to support the CHRF3 application.

The team that delivered the CHRF1 success should have been used on rounds 2 and 3. Oh, wait a minute.............