West Somerset Railway General Discussion

Now roll foreward to today and doesn't that sound like the present board of the WSR plc. ? Those currently who sit on the board, Someone else remarked, and i completely agree with him, " the present problem isn't the PLC, It's the three people who currently make up the board. "

 

However, it's worth adding that the tension does not always have to be as described; it may even be that members fear that insufficient regard is being paid to the charitable objects and excessive emphasis being given to commercial imperatives. It is because that tension exists - in whichever direction - that I think it important to craft the structures in such a way that accountability to the members is firmly embedded in the nature of the organisation. It is the lack of that safety valve (and an annual AGM controlled by the leadership is just a tied down safety valve) that encourages the sort of petitioning and vote banking that is referred to in the report. With the X6 and, dare I say it, the recent conduct of the plc, the combination of restrictive rules and (at best) lack of trust in those with power to act fairly inevitably leads to pent up pressures finding alternative routes.

The NYMR has previously been referred to on here. The arguments exist, and passions are deeply held. But my sense from afar is that the damage that they can do is contained because there are effective outlets and acceptance of divergent views.

 

Tom,

That's really interesting alternative. I agree totally with your comment that there's no perfect solution and if something works why not!

It would be interesting to understand how the tax consequences of that structure compare to the charity/ controlled subsidiary model. Corporation tax., charitable rate relief and, above all, Gift Aid can make huge differences. especially if you can recover Gift Aid on fares. Insulating the opco. from the Charity might make some of those tax benefits impossible?

It's also a case of what's practicable depending on where you start from. As the report pointed out the crown jewels of the WSR sit currently in the PLC.
It is the lessee of the trackbed, owns many of the assets and , critically, holds the vital licence to operate. Although many may not like it the reality seems to be that any restructure is substantially within the PLC's gift. So whatever future structure many might prefer, including the Bluebell model, it can only come about if the PLC is willing to make it happen.

 

Well, I thank you kind sir, that's probably the first time someone has said that about my scribblings

 

https://www.west-somerset-railway.c...JnpcqUvIQIUuZ5pNwm9Ya-35ZIH_i_1enqlka9Gr2CiaU

 

Or in other words, "Whatever".

 

1) Retract the notice to quit issued to the S&DRT and make significant efforts to heal the relationship with this valued member of the railway family.

??

 

The board, or gang of three to be more explicit , are not going to give up without a fight, its going to take some other organisation with more clout for them to change their stance, I can only see this ending one of two ways, either the S&D Trust, give in move away , and sever all ties, including removing their engine , and start anew else where, or they fight and take the PLC to the courts, in the hope they win, bankrupt the PLC, and in doing so, bring down the whole rotten structure, that is the West Somerset Railway. so enabling the railway's members to start from scratch with a whole new set up.

 

Quite so - why isn't that £300K being allocated towards the contractual obligation to fund the overhaul of 53808 at the end of its hire?

 

... but it will be an awful long time, if ever, before the WSR runs again if the plc collapses. The only hope is get control back from the 'gang of three'.

 

What a load of piffle and window dressing!

 

There are at least two brave assumptions there. The first is that the PLC would lose. The second , and far more dangerous, is that if the PLC went under enough could be salvaged.
For a line of the WSR's length a conservative but realistic estimate is that it needs around £1 million of capital investment every year on its infrastructure. The impressive turn around Profit of £300k last year should really be seen as evidence a need to fund raise at least £700k to fill the gap. That's on top of the accumulated backlog much of which pre-dates the current PLC management. Then there's the small matter of the PLC's lending bank and creditors being paid out of proceeds from the disposal of assets followed by the shareholders. Finally any new start up would not be able to do anything much on site without an operating licence which would lapse with the PLC's demise and take many months to replace.
Back of a fag packet calculation perhaps but I would'nt expect any phoenix to rise from the ashes without access to at least £2 and probably £3 million of capital. With buildings sold off and , conceivably sections of track sold for scrap who's going to stump up the cash? Of course you might just find a commercial operator willing to invest but that's not what you have in mind!
I'm afraid the let it all collapse and we'll start afresh approach is doomed to end in tears one way or another.

 

However, they don't own everything.
The WSRA own locos & carriages.
The WSSRT own the museum items & some historic carriages.
Without them there is nothing of interest at the stations, & it could only run a more limited service.
Without them there is no membership base to fundraise from, there is no gift aid, limited access to grant funding etc.


There combined shareholding is ~16%.
I'm sure if you have shares held by their members, & others who would vote for structural change, it would be well over 20%.


Does no-one find it strange that the plc has reneged on a contract with one, whilst putting a trustee from the other on the plc board?
The plc are playing them off against each other.

 

The plc are playing them off against each other.

Which is precisely why the Roman concept of 'divide and rule' must be resisted ...... look what happened to the Roman Empire when the oppressed fought back.

 

I think that the one thing virtually everyone who has contributed to this discussion has come to appreciate is that the Plc has to survive. principally because it holds the operating licence, if nothing else. If it folds there's likely to be little or no chance of reviving the railway. It then becomes a question of how much the Plc board are prepared to play chicken in their desire to cling to power! Regardless of what one may think of their approach to PR over the way they have handled issues it is hard to see how anyone else could have done things differently - with the notable exception of the S&D Trust and the sale of 4110. A former NYMR Chairman used to remark on how it was undercapitalised and so it is, but it has at least managed to make progress thanks to a series of major grants. The WSR is undoubtedly in the same position but stymied by its structure, and its support seems to be on the wane if the petition is anything to go by - a document that purports to have that many working members signed up to it has to be taken seriously.

So, the challenge is now to persuade the current board members that while they remain they represent an obstacle to both restructuring and fundraising, but also finding replacements with the expertise and nous to turn things around. A long time ago, when the financial crisis was revealed I said that it was astonishing that there had been no recovery plan unveiled, without which all the cost cutting in the world would be futile. I return to the point I made at the time - the real problem is the fall in visitor numbers - get those 30-50,000 extra people back and the financial crisis will evaporate. The new board needs to both manage the funding crisis and work on increasing trade and it will take a special and energetic mix of talent to do that.

 

Well, Greenline Coach Tours are advertising a trip on 19 September 2020 'Steaming to Minehead on the West Somerset Railway'. I do hope WSR plc have notified all their tourism contacts that they are closed for business until at least the spring of 2021....or do Greenline know something we don't ?

 

Bus rail replacement service between BL and Minehead ?

 

You'd need an accountant to really know about the relative tax advantages, since there is also the issue that rail journeys are zero rated for VAT, whereas my understanding is that VAT is chargeable if instead you are an attraction. So potentially what you gain on gift aid on tickets you lose on VAT.

(The other point is that, speaking entirely personally, although I realise that many attractions reclaim Gift Aid on entry fees subject to certain rules, it has never sat very comfortably with me, my own view being that Gift Aid ought to be reserved for something that is a genuine donation - "pay 10% extra on your admission and we can reclaim the Gift Aid, plus we'll give you a token to spend in the cafe for the value of the extra 10%" feeling to me like it is a bit too close to the wind. But I am not an accountant).

The other advantage of our structure is that while the Charity - which contributes roughly £1m per annum to the railway - is limited by its charitable status in what it can fund, the Society can support the railway's costs directly, which it does by the mechanism of an annual loan that is periodically converted to shares. That figure is typically about £100k per year, funded from the membership subscriptions.

There is no right or wrong answer, but the absolutely critical point to me is that members must have primacy in setting the strategic direction of the railway. The governance structure is then there to deliver as far as is practicable the member interests. The operating company is there to deliver the wishes of the members, not the other way round. The quid pro quo of course being that the members need to understand both the costs and the opportunity costs of certain desired outcomes, something which takes a degree of candour in communications.

Tom