West Somerset Railway General Discussion

Restricted funds are part and parcel of any charity's armoury, and give a very high protection that funds would be used only for the purposes for which they were donated; however, long experience on this thread has shown that their use seems to be profoundly mistrusted within some quarters in Somerset, to the effect that many seem to believe that only by virtue of an independent group can a guarantee be given that funds raised will be used for the purpose given. Hence what seems (from 75-odd miles away - inside the magic 200 mile radius) to be a general assumption that any new project needs an independent company in order to advance. Most other places, such projects could progress quite happily under the overall charitable umbrella with funds raised being protected by virtue of a restricted fund and paid out as grants to cover work undertaken, subject to appropriate governance.

It's a valid question to wonder why there seems to be such distrust. My two penn'orth is that the bipolar nature of the WSRA - which has considerable outgoings in its trading, non-charitable, subsidiaries - leads to a perception that funds given for charitable purposes might end up subsidising the non-charitable running costs. That may well be completely unfounded, but it is a difficult perception to shake once held. Which is another reason for thinking that WSR (Restorations) at least should be part of the WSR plc; primarily involved in restoring vehicles for use on the railway (i.e. additional workshop capacity) but with the possibility of doing of doing commercial work if it was genuinely a paying proposition. In that model, the WSRA could still act as loco owner and primary source of fundraising, and would then disburse the amounts raised within the restricted 4110 fund as grants payable to the WSR (plc) to carry out restoration work on 4110.

Tom

 

Wouldn't that be nice!

 

From experience elsewhere, there is another issue in play. Many people do not understand accounting, the different means of ring-fencing moneys, their implications, or even whether it is necessary to do more than report against expenditure areas. This leads to the sort of thinking you describe, and sub-optimal structures as a result.

 

WHEN did these discussions take place is the key. Was it soon after the appeal was made, in which case I think 4110 ltd should have notified potential donors. Or was it later, when it became or had become obvious there was enthusiasm to dig into pockets?
Either 4110 ltd have been a bit naughty or they have been treated badly.

 

I don't know if this posted earlier answers that, at least in part:

It was asked earlier if the WSRA needed its members permission to buy the loco - assuming this isn't a specific requirement of its Articles/Constitution, the answer is 'No' but the Board would have to meet and agree to such a move, something @aldfort could not unilaterally do at the meeting he describes attending. Even the fastest moving Charity would require proper notice for a valid decision to be taken.

Completely agree with @Jamessquared and @35B that sadly too many people don't understand Charity Law and accounting - including, probably, at least some Charity Trustees!

Steven

 

Bean Counter has quoted "The WSRA have maintained a dialogue with the group ever since. I have even pledged money".

Would MS have pledged money to a group who had no hope of success? This suggests to me that 4110 ltd at least started as the preferred bidders. Why the change?

 

Let's not forget that there is a difference between a pledge and a payment.

I think some reading between the lines is required, but agree with @Bean-counter that the most likely scenario is that until the WSRA trustees had agreed to pursue 4110, they were not in the running but that he hoped they might be. Had the WSRA decided to stay out, then 4110 Ltd would have been the only option for keeping 4110 on the WSR.

Hopefully (yes, I know, this is the WSR!), the differences in what has been said are to do with the timing of meetings and decisions, and that WSR supporters wishing to keep 4110 on the line will transfer their pledges.

 

For those of you on FB the '4110 restoration' page has some interesting posts, in particular the post by Ian Coleby on 29th June and subsequent 'replies' within that posting

 

Email from WSRA just received:


Dear WSRA member

You may have heard that the WSR Plc is in dire financial circumstances and has an urgent need for cash. It has therefore decided to sell Locomotive 4110, which is not only well suited to the line but was on Taunton Shed for a while. You probably remember that this loco is already in our Locomotive Restoration Fund.
The Plc has already received a substantial offer from a purchaser who would take the loco away. However they are prepared to sell the loco to the Association for £100,000. Both the Plc and the Association are determined not to repeat the mistakes of the past. WSR Plc chairman Jonathan Jones-Pratt has asked me to include this message from him:

"It appears that I need to make clear that if 4110 is to have a future as a West Somerset Railway locomotive, that can only be in the ownership of the West Somerset Railway Association. The Railway needs to establish a core stable of locomotives owned either by the WSR Plc or WSRA on which resources are to be focused in future. Locomotives in the core cannot be owned by special interest companies outside the control of the WSR Plc or WSRA.

The advantages of ownership by the WSRA were set out in the joint statement made by the WSRA and WSR Plc on 11 January 2019. We are very grateful to the efforts of those who have raised the pledges which mean that there is the opportunity for 4110 to remain on the Railway. It has been made clear to the potential directors of 4110 Ltd that the locomotive will not be made available to them and it is disappointing to see that they have been suggesting that funds should be sent to them. Supporters who wish to save the locomotive for the West Somerset Railway should now send their pledged donation to the WSRA where it will be held securely until the locomotive can be purchased from the WSR Plc by the WSRA.

I am confident that the necessary sum can be raised to avoid the locomotive being sold off the Railway. Please act now."

As you can see we are working closely with the WSR Plc on this vital project, which is of course the primary purpose of the Association. We have therefore launched an urgent Appeal to raise £100,000. We hope that all those who were originally prepared to support the 4110 group will channel their funds to the Association, so that the loco can remain on the WSR.

You can read the joint statement by the Chairman of the Plc and me HERE. You can also download a Donation and Gift Aid Form. All money received will be restricted to the purchase of the loco, unless more than the purchase price is raised when it will go to the Locomotive Restoration Fund.

Please help us get the Association and the WSR Plc back on track!

Yours sincerely







I think that's the first time I have seen widely stated in public about the "dire financial circumstances and urgent need for cash" of the PLC. Strong words and you have to wonder how bad things are..

 

8

To me it is axiomatic that the three parties need locking in a room with a qualified chairman until they come to a mutually beneficial agreement. One railway!!!

 

This whole episode has certainly shown that the public communication of the 'one railway' could use some attention. Important information has just not made it out as quickly, and as widely, as it needed to. In an organization which is so dependent upon volunteers and supporters, this has to be a key part of the whole process at every step, not an afterthought at the end. Communicating while the pie is only half-baked may look on the surface like a non-optimal way to proceed, but if you don't, and wait for all the i's to be dotted, you get.... this!

I realize you all (i.e. 'one railway' management) are trying, and there are some major issues on your plate which are taking most of the focus, but hopefully there will be a modified approach in the future. Perhaps a single person who is i) totally in the loop on all matters, ii) has as their job keeping the community up to speed on all that's going on, and iii) does not have any other job, so they won't get distracted. If you don't have someone who can do this ... add them!

Noel

 

Fairly unequivocal. The PLC is not going to sell the loco to 4110 Ltd, even if the latter raises the money. Perhaps this should have been made clearer to the big wide world a bit sooner by either party. So it’s either give your money to the WSRA and secure the future of the loco, or see it leave the railway. I know what I am going to do, hope others will now follow suit.

 

From the WSR Plc Chairman's statement:- "...The advantages of ownership by the WSRA were set out in the joint statement made by the WSRA and WSR Plc on 11 January 2019. ..."
Note the date : - The 11th January 2019 - That's yesterday. This is so late it's practically useless (just look at the above speculation) and probably insulting to many. If the Plc didn't intend to sell the loco to an independent owning body on the railway then why didn't they say so at the beginning? Why didn't they come out publicly and say that they'd only sell to the WSRA on site or to an outside bidder when they announced the sale?
If this is the best the current Plc management can do then I'd suggest they have a very long way to go to start demonstrating that their word can be trusted and their actions relied upon. And the WSRA? "Now send us the money..." (after someone else has done all the work? Blinking cheek!) and only eventually '...Oh, and here is the form you need to fill in for restricted fund donations...' (Can the bean counters out there tell us if gift aid on restricted fund donations is automatically restricted as well or do we rely on trust that the charity will place those funds there?)
Perhaps the WSRA should consider hiring 4110 Ltd as consultants to put some life back into its fundraising activities
The official communication on this matter has been handled so badly (As usual) I'm beginning to wonder if the 2 (or is it 3?) month shutdown includes management?

 

I understand that there is a statement of recommended accounting practice (2015) that states Gift Aid on restricted funds should also be applied for the restricted purpose unless the donor specifies otherwise.

 

Thanks Matt. I suppose the worrying thing there, if there is a lack of trust anywhere, is that it is a "...statement of recommended accounting practice..."

 

Recommended as in “the accounts are going to be hard to get signed off if not applied.”


Sent from my iPad using Tapatalk

 

Some of the statements, only just released are almost beyond belief.
The WSRA letter states that the PLC are in dire financial circumstances. It goes on to state that 'The Plc has already received a substantial offer from a purchaser who would take the loco away. However they are prepared to sell the loco to the Association for £100,000.'
If the dire financial circumstances comment is correct why would a business take a much lower figure, apparently, for the locomotive? It makes little business sense I feel. The sale at the lower figure is based on sentiment. That is an issue facing many heritage lines, but it was usually a business mantra that sentiment had no place in sound business affairs - especially when backs are to the wall!
However there does seem to be more to follow in the future I believe - so watch this space.

 

It is not so much that the WSRA might need their Members permission to buy the locomotive, but more importantly that they might need their Members permision to release £80/£100k of Association funds to purchase another inoperable locomotive.

 

That, presumably, is why they are hoping the money pledged to 4110 Group will be diverted to them. I wouldn't place any bets right now.

 

So if WSRA can’t raise the money, they would prefer to sell it to an owner who would definitely remove it from the railway? Rather than sell it to 4110 Ltd who would almost certainly keep it at the WSR, with only a slim chance it would leave one day?