SVR General Discussion

I’ll let the old man know.

 

To answer the first half of your post, the owning groups are a mixture as diverse as the locos themselves. Off the top of my head and talking about steam locos, Family controlled company: 34027, Welsh Guardsman, 1450 (if it returns). Charities: 813, 1501, 82045, 7325, 48773, HE 686, MW 2047. Charitable community benefit societies: 7802, 7812, 5164, 4150, 2857. The Stanier Mogul Fund is unincorporated but highly successful and actively recruits new members (as generally do the charities and CBSs). The other non-incorporated groups have little presence to attract new members and I suspect are typically a diminishing group of the original members who preserved the loco. One such group recently threw in the towel and transferred 5164 to the EMF, I suspect they will not be the last to look for a similar arrangement.

Many of the now charities and CBSs began in the same manner as the remaining non-incorporated groups. It is notable that the more successful bodies such as the EMF and SMF are now on loco agreements and carrying out active overhauls, whereas those who haven't adapted are the ones stuck at the back of the queue.

 

More power to your elbow Olly. Just a reminder that collecting tins don’t allow gift aid, and a supply of gift aid envelopes might be handy.

I’ve just seen Robin’s as I typed this but here goes anyway. SVR and charities wibble follows, it gets complicated!

‘The SVR’’s current appeal is the Charitable Trust’s one for phase 2 of Bridgnorth Loco Yard.

The CT also allows one online to direct one’s donation to categories: rolling stock, infrastructure, education, apprenticeships etc., but you can also donate for a reserved project (7819, for example, in The Engine House, but one could equally pick something novel like the DMU).

There’s around 12 other charities on the SVR from which one could choose which I guess brings one back round to the strengths v weaknesses discussions
https://www.svrwiki.com/Charities_associated_with_the_SVR

In there are current appeals for three GWR coaches, 813’s new casting, D1013 bogie overhaul, Warwickshire’s new boiler and 7325 and 5164’s overhaul, for example.

 

There was a separate thread somewhere for 'what is the perfect organisation for a heritage railway', and I'm sure I have heard the SVR management say that if they could do it all over again, it would probably be very different. However you can't change history.

Preservation began in 1965 and the line opened in 1970 as a membership organisation with a 5 mile railway. It coincided with the availability of the next section of the line to Bewdley, which the membership aspired to gain but didn't have the impetus to raise the funds. Nabarro's solution was to attract new money through share purchases which resulted in the existence of a separate PLC with shareholders and a membership organisation (many people including myself are part of both and do not see the two roles as a conflict). It is also worth mentioning that the reason that company policy was not to buy locos was because it would have conflicted with the cost of acquiring the railway itself, hence the complaints from the membership at the time that 4930 and 45110 were bought.

The Charitable Trust came into existence out of the original Rolling Stock Trust as neither of the two bodies could take on the wider charitable role for legal reasons.

So yes, three boards is too many, but how do you propose to change it? The PLC owns the rights to operate the railway so you can't wind that up and in the process disenfranchise thousands of shareholders who have made the railway what it is today. You also can't disenfranchise around 10,000 members. The Charitable Trust is rightly seen a very successful fund raising organisation, so you can't do away with that. So unless there is a sensible proposal for how you reduce the number of organisations, then there have to be three boards.

Having attended the AGMs of the SVR(H) and SVR(G), the directors all have specific roles. If you make the boards smaller, you have to combine those roles. Which roles do you think could be combined, and since the directors are unpaid, how do you think that would save the railway money? I would add that AFAIK all the Boards meet monthly and there is cross-representation of directors so all the organisations are aware of developments.

 

I don’t know enough to make suggestions about what it should look like or how it gets there. I simply observe that the current structure is unwieldy and unlikely to be contributing positively to meeting the challenge the railway faces.

The fact the directors are unpaid is irrelevant. Do they need to be directors todo those roles? Could those roles be better performed by being volunteer managers. Are the roles actually required? These are the questions that need consideration.

it is essential to be nimble. Many HRs have become arthritic with age. Survival may rely on being willing to cure the stiffness in the joints. Is the SVR really willing to do that?

 

How does an unpaid director differ from a volunteer manager?

Just saying a board is "too big" without justifying it is unhelpful.

 

Perhaps the least difficult (note I avoided saying 'easiest'!) would be to merge the charity and the membership organisation? There's no particular reason the membership society can't also have the charitable functions.

Roles to be combined mostly admin stuff I'd have thought, I presume each board has a chairman, FD, and secretary at least? If some if their time is freed up they might be able to do some other useful stuff for the railway, potentially cutting down on paid time required.

 

The clue is in the name - one is a manager and one a director. I’d make no specific comment about the SVR (I’m not close enough to know the details) but often the roles get blurred, such that directors end up managing (and thereby have insufficient time for direction).

Tom

 

It is difficult to see a reason why SVR(G) and the SVRCT are not amalgamated not least to give the benefit of charitable status across both. I can't see how that would disenfranchise the membership.
Do the SVR(H) Directors really have specific roles? (for important functions such as infrastructure, motive power, marketing etc rather than routine admin)? - I see no evidence that is in place and effective and is perhaps one of the issues. It rather looks from the outside as though the GM/MD is/was overloaded as a result.

 

Being a charity restricts the flexibility in giving financial assistance as grants (although the SVRH calls them donations in its AR, which I think is not correct) have to be structured in compliance with the applicable rules. I think you can probably work around this but once you start sucking at the tax avoidance teat, you make life more difficult.

 

That's "tax avoidance" in the same way that claiming mileage is tax avoidance.

 

"Elsewhere" this does not appear to present a major issue, providing the aims of the charity are drafted appropriately.

 

Specifically on this point, an understanding of the Gift Aid Small Donations Scheme may help eke out casual cash donations a bit further.

 

+1. It would make the Charitable Trust a membership organisation, with gift aid on the membership income. It would give the trust a ~17% shareholding in the Holdings PLC.

A more subsequent radical aim would be for the merged CT to own the assets and have a significant control of the PLC. That would involve the CT gradually purchasing heritage assets from the PLC while building its shareholding in it through donated shares. It might then be possible for fare box income to go to the CT (gift aid), with the PLC paid for operating the trains. It could also look to work with the independent charities and owners.

But short of a philanthropic lottery-winning white knight, the SVR's priorities at the moment are rightly IMV more short-term prosperity and a profitable trading model.

 

I agree and another danger I have seen played out too often is that Directors act as managers and as a result their position becomes blurred so far as the rest of the organisation is concerned. The proper management channels then become undermined and circumvented. This affects some railways more than others, but there should never be a question as to who is in overall charge on a day to day basis, and it should not be non exec directors.

 

I did justify the statement. There are too many people to have fast, nimble and change oriented board decisions. As to whether this is having an effect on the railway, I would point to the current situation and ask whether it might be less serious if there was more urgency and attention to the need to evolve, with all that goes with that.

 

Whilst there's a great deal of sense in this post I'm not convinced that its wise to put a railway's faith in one model to the exclusion of others. Perhaps the ideal is a mix of ownership and hire. Owning some locos improves the ability to plan overhauls as part of a long term capital plan that takes account of operational service requirements. Realisation of that plan can then be substantially railway's own hands. Where locomotives are hired their overhaul and availability will depend on the less predictable commitment and resources of the owner.

An increasing characteristic is that some owners and owning groups may get tired. They've had the excitement and satisfaction of rescuing their locomotive(s) and restoring them once, possibly twice, and can't work up the enthusiasm to do it all again. They may be tempted to sell and not even a well written hire agreement may guarantee that the locomotive(s) continue to be available on hire in those circumstances. Not all owning groups are incorporated so there may be the complication of Inheritance Tax on deceased owner's or part owners' share in valuable assets which may affect the future disposition of locomotive (s) the railway was relying on.

The one model which I believe should be avoided is the "use and overhaul later" one. It seemed too good to be true and almost certainly was.
The owners didn't have to worry about funding the eventual overhaul cost and the railway got immediate "free" use with the problem of how to fund the overhaul being the proverbial can kicked down the road. Eventually the overhaul bill needs to be paid but, as has been pointed out, accumulated reserves may have been used for other worthy causes that have arisen so there's no money available. How much of a threat that may be depends on the wording of the hire/use agreements. If the obligation is to overhaul as and when the money becomes available then there's no enforceable debt falling dues for payment ( but of course the overhaul may be long delayed or never happen) but if there's a contractual commitment to overhaul within a certain time that could get messy. If any railway has a number of such agreements it could have massive unfunded debts raising issues about its solvency.

The associated problem with such agreements is that the railway may find itself with a capital intensive overhaul obligation at the end of the hire period with no assurance that the locomotive will not be sold once the overhaul is complete.

To pick up on later posts unsuitable corporate structure seems to be at the heart of the problems that some heritage railways are facing. For instance where the operating company runs the railway itself rather than on behalf of the charity ( which is there to provide fundraising support) it will not be possible to claim Gift Aid on fares. Similarly such a charity can only use its funds on things that are within thoses registered charitable purposes for which it exists. It's entirely feasible that an operating company could go bust in situations where the associated charity has funds but can't use them to bail the company out. It's common for corporate structures to have evolved in response to circumstances rather than by design. What worked when the revenue was coming in, costs were reasonable and operating surpluses could be generated, can become a real problem in times of financial stress. The challenge can be even greater where key assets like locomotives are owned by affiliated groups whose members may have aspirations that don't match those of the railway's management.

Lastly what can easily be overlooked in the debate about hire/usage/ steaming fees and their relationship to the cost of eventual overhaul is that the railway may be providing considerable value by allowing locomotives or stock to be on its premises. If it wasn't there what would it cost the owners to keep it elsewhere is a reasonable way of looking at that value which seems sometimes to be taken for granted.

 

Agreed, although 2 caveats. First, you need to be careful about gift aid on membership fees and how that works with what benefits you offer.

Secondly on the timing, I do agree, but often, when the going is good there is "no need to change as it's working fine" and when the going is bad it is "a good idea in theory, but we have more pressing things to worry about".

 

I think 1472's very eloquent explanation of the arrangements on the SVR make more sense. You say 'the railway has to focus on maintaining and sustaining the whole system' and this is I think the crux of why your model is less suitable. Facts are that the loco's we use are designed to be a part of a vast industry which has now of course disappeared. The technology we are using is outdated and in most cases has been 'life expired' many times over.

A 16 mile branch line (itself only available in the first place because it was economically unsustainable as part of the national network) is never going to be in a position to generate the income required to maintain 20+ potentially active loco's it currently has available on any sort of rota. A system would select a core number of loco's to run and overhaul in a planned repeating sequence. Like the Torbay & Dartmouth. As a 'system' the SVR needs perhaps 6 or 7 steam loco's at most with support from maybe the same number of diesels.

Fact is though the SVR exists and is run primarily by enthusiasm and happily, because preservation is such a broad church our individual and collective enthusiasms allow particular projects to jump a queue that in a 'system' they would never be far from the end of.

No doubt we are in challenging times at the moment but glass half full the SVR and the wider movement will get through this period and one sunny day - maybe several years hence - we will once more be able to say even Gordon is ALIVE'!

 

As the song goes: "And then you go and spoil it all by saying something like..." :-D

(Note the emoji :-D )