North Yorkshire Moors Railway General Discussion

My question is, how do the two charitable organisations coexist?
Sawdust.

 

This remains a fascinating debate. I do like the idea for structure proposed by @Lineisclear. I think that the only issue would be that such a change could only cement change, not catalyse change.

@35B made an interesting point about authority that seems very much the nub of the problem. So discredited are the SMT and boards in the eyes of the rest of the organisation that they could not command the authority to lead any change they lack the communication skills and the permission to act.

If the SMT and boards recognise that there is an issue, then I think they have to find external support to help with what follows. Whether or not some/all of that team have to eventually leave or not depends on too many factors and isn’t relevant right now. What is important is recognising that they need support, finding that support and then getting behind a culture change project that would eventually lead to a structural change in governance arrangements (perhaps) to embed and protect that change.

The Moors can’t (and won’t) continue like this. The sooner that this is recognised and neutral outside help sought, the better the chance of rescue.

 

The gala starts tomorrow with the first trains off Grosmont at 08.30 (563) and Pickering at 09.00 (92134). If my fingers and thumbs add up correctly, there are nine steam locos out. 8, 29, 563, 2253, 2392, 4079, 44806, 60007 and 92134. That just leaves 926 as spare. When was the last year a BR standard didn't feature?

 

It may be the operational hub, which does not mean it is place most pax want to go.
My wife's view is not relevant to the point about business enterprises which in 2026, are there mainly I suspect because of the heritage lines existence.

 

I would suspect pre 80135 last reentering traffic with 80136,75029,76079,92214,92134 covering the following years…

 

A very perceptive question. They don’t have to as the Trust could be merged into the charitable CBS. The disadvantage with that is that the moment a CCBS cannot register with the Charity Commission.That can affect grants from donors who only donate to registered charities. It’s also the case that the Financial Conduct Authority as the regulator of CBS’s will not approve rules that allow shareholders to receive benefits such as discounted travel. That was a problem for the SVR which it has solved by creating a separate membership club. An alternative could be to let the Trust continue as a fundraising charity with its members able to benefit from travel concessions while separately becoming a shareholder in the CCBS would mean having a vote in the entity that operates the railway. There are variations that can be adopted but the basic principle is to encourage investment in an entity with charitable purposes ( and the benefits of charitable status) that can be run in the interests of its shareholders.

 

NYMR though likes to apply for grant funding and shout about how much it claims to generate for the local economy ..think the bridges and wheels ( wheels still don’t rotate a decade later ) was one such beneficiary from memory .

 

There are a couple of points in there that surprise me, because they are directly contradictory to what we are being told at the Bluebell (where we are moving towards a CCBS structure) and I am confident that our directors and trustees have done their due diligence about what is and isn't possible with a CCBS.

The first point is "It’s also the case that the Financial Conduct Authority as the regulator of CBS’s will not approve rules that allow shareholders to receive benefits such as discounted travel." In our case, we have been assured that the current membership benefits (primarily 50% discount on travel) will continue on terms that are at least as good.

The significant issue around benefits for us is that the CCBS does not allow tiers of benefits. You can offer whatever benefits you like, but all members must get the same. That is an issue for us because up until now we have had annual members (who get a 50% discount) and life members (who get unlimited free first class travel). So we have to remove the ability to come a life member, (and find another mechanism to preserve that benefit for existing BRPS life members while not offering it to prospective new members). But going forward, members of the CCBS will continue to receive the existing travel benefit, while the number of life members will dwindle over time.

The other point is that "a CCBS cannot register with the Charity Commission.That can affect grants from donors who only donate to registered charities." I have never heard that before. It is true that a CCBS is technically not a charity (in the narrow sense that it is regulated by the Financial Conduct Authority, not the Charity Commission - I believe that is because becoming a member is seen to be akin to any other shareholding in a company, i.e. a form of investment). However, the structure specifically exists in a way that HMRC treat it as if it were a charity for taxation purposes. Given that, I can't imagine any grant-giving body making a distinction between a charity and a CCBS when it comes to giving grants. Certainly in our discussions, I have never heard anyone raise that canard. One of the advantages being put forward of being CCBS (for us) is the it opens up opportunities to obtain grants since the charity will be the asset owner - in the past, some grant-giving bodies have not been able to donate to our charity to improve the railway's assets because the charity is not the owner of those assets, especially not the infrastructure. That restriction disappears for us by becoming a CCBS, though I appreciate it may be less of an issue (and therefore less of a benefit from converting to a CCBS) in the current NYMR structure.

The really significant benefit of being a CCBS is that the company has to be explicitly managed to deliver the community benefit that is laid out in its articles, which is somewhat different from either a PLC structure (which has to be run for the benefit of its shareholders) or a charity (which has to be run for the benefit of the public). So a CCBS does open up the possibility of getting much closer to an organisation that is run specifically to deliver as a benefit the things its own members are specifically interested in, which is preserving and operating a railway - you just need to make sure that in your foundational articles, the community benefit you describe is closely aligned to what the members wish to achieve. In that sense I agree with @Lineisclear that in the modern world, a CCBS is probably as close as you can get to the old days of member-led railway organisations, existing primarily to be run in accordance with member wishes.

Tom

 

Just on the point of status, some grant giving bodies are getting quite attentive to legal structure. This is especially true for CIOs, where their use by service providers for their own practice is massively blurring the boundary between charitable purposes and personal gain.

To my certain knowledge, at least one local authority is considering a blanket ban on grants to CIOs for this reason.

More broadly, the proliferation of such structures is now also a source of confusion.

 

I'm glad we agree on the merits of a CCBS Tom. As you say a CCBS has charitable status but is not currently capable of being a registered charity. I agree that logic is that grant awarding bodies should apply commons sense i.e. what really matters is the charitable purposes, but if they have rules that they will only give to registered charities, as some do, then you may have some persuading to do.
I was no longer involved with the SVR conversion process when the hurdle of getting FCA approval of its CCBS rules had to be overcome but I understand that it took a very hard line. Any benefit to shareholders other than the payment of interest on their shares (which is not mandatory) was a bar to approval. I understand FCA logic is that members of a CCBS join to achieve its community purposes not to receive any material benefit. It seems that getting approval is far more likely if the rules are in a pretty standard form which the FCA is used to. It will be interesting to see how the Bluebell fare when that stage is reached. If, as you suggest, it's tiers of benefits that are the problem, rather than any benefits, that will set a very helpful precedent.
Your point about the charity being the asset owner is also critical when it comes to the possible recovery of Gift Aid on fares. That is one of HMRC's conditions.

 

Of course, there is a big elephant in the corner of the room! IIRC you have previously mentioned CCBS as a possibility much earlier in the thread, but have downplayed such ideas as being too costly to put into practice - so what is your estimate of the cost of turning the NYMR into a CCBS, and how would that sum be raised and would the benefit of using that cash outweigh the cost of raising and using it? Please do do try toavoid the use of sugar-coating and flannel!

 

Clearly this is a more complicated issue than it first appears but Tom's expertise and knowledge convince me it is a possible solution. Certainly the Bluebell has achieved huge success in the preservation world and any organisation which can overcome obstacles on the scale of Imberhorne deserves to be listened to.

The basic idea presented by Lineisclear is sound, but because of the complications outlined by others it will take a very long time to complete and I'm sure we can't wait that long to make at least some progress. Every delay in starting to repair the existing damage costs both in terms of lost opportunity and ever increasing debt during a period of minimal income and still crippling wage bill.

Raising income from supporters has to be a good idea whatever methodology is used. If the model is to be one of share ownership I can see that working well, but only if conditions are there to encourage funds being forthcoming.

Most reading this thread will be more than familiar with the line, the locomotives and all the infrastructure. Most will also be familiar with recent problems and failures. Most will ask themselves is this a railway that I would consider purchasing shares in? Sadly under present circumstances many, including myself, would say no for the same reasons I've outlined in earlier posts. I personally won't cough up if the money goes on management salaries, ongoing bank interest or bizarre vanity events. The bottom line for the railway is avoiding financial collapse. My bottom line is why throw good money down a bottomless pit.

On the positive side, and Linisclear's proposal has many clear merits, I would be persuaded to change my mind and donate if I was sure that a corner had been turned which I think could be done if we bite the bullet now.

We have to extract ourselves from a very expensive hole and it will need a huge sum of money. It is difficult to quantify in the absence of the latest year's accounts. We are told they are complete and signed off but not published or yet presented at the continually delayed AGM. There can be little doubt they will be horrendous.

The major liability will be Santander debt. Can any knowledgable member give a realistic figure as to what this currently totals? I've heard estimates of upto £3 million, maybe more. The Bridge 42 project is short of £400,000, other essential bridge repairs along the line probably meean at least doubling that requirement. We have this Winter to finance from a minute income. There is a clear backlog of maintenance on locos and rolling stock, £90,000 estimated to repair the Class 25. Working capital even more.

If there is to be a share offer made it must be for a minimum of £4 to 5 million. Finding that sort of money from supporters or even a wider public offer could be done, but not without changing and discarding those who have failed for so long.

I know I sound like a broken record where the needle is permanantly stuck but if new money is to be attracted then donors, shareholders, call them what you will need to be sure it's money well spent.

 

Could the NYMR become a CCBS where the "community" concerned is not only the railway itself but also the local community?

 

While I think that the concerns of the local community are valid, I'm not sure that making the link explicit is wise. I've had personal experience of businesses owned by their customers, and the results have been messy. It also harks back to the early days of the railways, which left us with undercapitalised lines that served their communities poorly, and were unable to respond to changes in demand.

 

So, If we set up a CCBS me and my mates in the S&T could all become shareholders, paying say £20 each and perhaps Lineisclear might become a shareholder paying say £ 20,000,000. We would all have one vote each and would get some interest on our investment. I could get my investment back if I wanted, subject to the rules, which we agree to set up. No one will be much bothered about me withdrawing my investment, but if Lineisclear takes out his £ 20,000,000 that might be problematic, so the rules about withdrawals are crucial. We want people to invest, but don't want larger investors holding us all to ransom by threatening to withdraw their stake. Anyway, it's an interesting idea - and if I'm not understanding it correctly please let me know!

 

The stark contrast is that the BLuebell and SVR are transforming their governance in order to embed the culture they want to have. The NYMR is not as yet shifting the culture. It’s possible to turn the corner, but it must be turned first. It’s isn’t in fact essential to change the governance structure (no matter how positive a step that might be). It is essential to change culture. Whilst there remains a perception that the SMT and board aren’t listening any governance change is likely to be ineffective and possibly will make the situation worse not better because there is no trust between people.