West Somerset Railway General Discussion

Donations, legacies etc.

 

Typically, we talk about losses on the trading company, with income being below expenditure. The gap is hopefully covered by donations and grants, often channelled through a linked charity.

Most preserved railways are set up in ways that make the charity the dominant partner, with the company working for the charity. The WSR differs in that the company is a standalone organisation, and there are a number of supporting organisations around which have limited influence (and no control) over the actions of the charity.

This makes for less efficient fundraising and inhibits grant funding because it introduces a risk that the railway company may not honour the promises made by the charities seeking the grants, and that the charity will be powerless to respond. Without getting into details (already discussed at length previously), this is why the changes to how the Hinckley Point C grants were used is significant at WSR, and further constrains the ability to obtain grants.

 

really depends on the numbers behind the loss. A HR might have engaged in a repairs and renewals programme which would benefit long term but would hit the bottom line in that particular year. So a loss with lots of maintenance and repair items being paid for is a better position than a loss based on straight forward trading income v trading expenditure.

Of course cash is king so railways who make big loses can still be going concerns with large cash balances. Depends how “organised” things are - there might be a grand 5 year plan based on cash and losses/investment or things might muddle along with the hope that it will be ok - that’s something the bare numbers can’t tell anyone….

 

Transporting a seat from A to B is a fixed cost regardless of whether it is occupied or not, The key factor is your gross margin across the whole operation.

 

Agreed. But if you are assessing two very different fare models, you also need to understand how the two compare. If charging a higher price, but conceding free travel for a year, you need to understand whether that price per journey rises or falls.

Profitability measures then tell you about the overall profitability of the organisation. The connection to fares may be quite limited.

 

I have had chance now to look at the DRC website.

Seems you pay an extra £1 (although that is not exactly clear) and they end up getting £2.75 from the government. Not sure what happens if you visit as a child on your own, although maybe in 2024 under 15 are not allowed out on their own any more.

https://didcotrailwaycentre.org.uk/article.php/11/opening-times-prices

 

If that child is a taxpayer, then they're fully entitled to Gift Aid - and my problem with that page (like many Gift Aid admissions) is that it is insufficiently clear that Gift Aid only applies to people who pay UK Income Tax and/or Capital Gains Tax.

There's a whole separate question around Gift Aid declarations and what people understand about them that needs to be kept in mind.

 

I would claim to understand much of this but I had always thought it was based on just paying income tax, but CGT seems logical as well. How many 15 years old earn more than the amount where you start paying I.T. and would they even have to pay CGT.

Do HMRC even check this stuff?, as I am sure there must be pensioners who gift aid but actually do not pay tax.

 

I didn't suggest it was likely...

They do check, and have surprisingly good capabilities for matching details. As an administrator, I've had to respond to people who've received letters from HMRC.

 

The error is presuming that all journeys are equal.

For example, tomorrow looks like a nice day. I may decide to cut the grass or if I have paid extra for a ticket in April and can have a run to Minehead for "free", I may do that instead. If I had to pay a fare tomorrow then the grass gets cut and no revenue goes to the WSR. If instead I'm on the train, then I will buy a snack, get a few goodies in the Minehead shop and have lunch in the cafe. The incremental cost to the WSR for my travel is zero and the margin on my spend is all upside.

The decision point is how many paid journeys per year does your normal customer make ? If the answer is 1 then the model works. If the answer is 2 then it will probably break even or thereabouts. If the answer is 3 then it probably loses money.

How many fares does your average customer pay for each year ?

 

Which is why my view is and remains that the assessment needs to be the total fare income (including Gift Aid where applicable) divided by the total number of journeys. It's an imperfect measure, but it's one that can help assess whether the use of NYMR style pricing is net additive (or not) to the top line. The numbers are large enough that focusing on individuals is likely to distract from an understanding of the overall trends.

There's a lot said about the NYMR and the diesel enthusiast who has done over 100 trips - he is obviously a winner. But if his win (which has zero marginal cost to fulfil) is offset by a de facto price rise to those who only travel once, the railway is up on the deal. From my own observations and what's been said here, I suspect the WSR exhibits similar patterns to NYMR, with a pronounced tidal flow to the end of the line (morning out, afternoon back) complemented by a range of ad hoc travel patterns, counter-tidal and short line.

I then agree that additive spend is worthwhile - but it is a consequential gain, and should not be part of the main equation (I strongly assume a correlation between traveller numbers and takings at the various outlets en route).

 

And is probably not married either

 

Or possibly is and the wife wants him out from under her feet. Alternatively, he is going out to avoid having to do all sorts of things he might have to do if he stayed at home. It takes all sorts to make the world.

 

Back in 2019 both myself and my wife had season tickets for Swanage, and being a saddo I "kept score"
I had the equivalent of £427 my wife did one round trip at £15. At the time the pass was £49 (so another saddo spreadsheet tells me) so they made out of her and lost with me. Guess the same may happen with locals or those with second homes here.

 

You probably won't be unique but I bet not many will do that many trips. A significant number will do multiple journeys, though. My daughter and family stayed in Corfe a couple of years ago and used the railway to get to Swanage on several occasions whilst there during their stay.

 

It’s very clear on the ticket booking page https://didcotrailwaycentre.org.uk/event.php?xProd=840&xRunningID=896

 

That doesn’t make it clear at all. Gift aid is only claimable if you give a 12 month ticket OR charge a higher admission price (10%) than a non- gift aided one to include a donation. Which is it? The booking page makes no such reference, which it must do. If Didcot are not doing that they are on quicksand.

Edit: It is much clearer now I've looked at it on my PC and not the phone. I hadn't spotted the tick box for gift aid. Apologies.

 

The text makes it clear that the gifter must be a UK tax payer which was 35B’s concern.

Ticking or unticking the Gift Aid box changes the price so it is clear what visitor will be charged and the Admission prices page on DRC’s site lists Gift Aid and standard prices https://didcotrailwaycentre.org.uk/article.php/11/opening-times-prices .

 

Gift Aid is an important part of the picture, but not the most important part.

Far more significant is likely to be the ability of a charitable railway to receive grant aid from grant-making charities, of which there are quite a number focussed on industrial heritage, and millions in charitable funds waiting to be unlocked.

The WSR was just beginning to tap into this resource until the coming of the present WSR plc regime. The WSRA (with Andy Norman leading) had obtained a whisker under £100,000 from the Hinkley Fund for community projects, and £20,000 from another industrial heritage charity as seed money for the ‘Dunster Goods’ project.

Both were scuppered by the WSR plc who reneged on an agreement to host school visits at a marginally profitable rate on otherwise lightly used services and then put the tin hat on the relationship by a disastrous appearance of the WSR plc Chairman in front of the grant Trustees, after which a fellow Trustee told me that he would never approve another grant from the WSR with ‘that man’ involved. (I was a Trustee at the time and had recused myself from the process became of the conflict of interest.). Half the grant had to be handed back.

Dedpite the WSR plc having been involved in the design of the ‘Dunster Goods’ project, forward motion could never be achieved and so the £20,000 could never be drawn down.

Future grant applications are built on previous successes, and the current regime burned those green shoots off with a blow torch.

I am entirely unsurprised see that the WSR plc ‘External Fundraising Director’ has no successes to tell us about. His is a thankless task until the WSR family sorts itself out.

 

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