North Yorkshire Moors Railway General Discussion

In my experience both Trust and Company accounts are completely useless as a way of assessing the health or otherwise of a Heritage Railway. Only the management accounts provide a “real” view. These organisations rely utterly upon cashflow management. Literally nothing else really matters.

On the subject of donations of various kinds. I think the best way to deal with them is to have a budget based on experience of what can be raised, and then a budget that takes that and the income you can earn and tries not to project spending all of it. After that it comes back to cashflow management.

 

As posted last week I am one such individual and had arranged to bequeath a significant sum. Certainly I belong to JNC's "good money after bad" definition together with the belief that unless there is a change of approach any bequest would be used to pay bank interest and/or administrative salaries.

If I knew that the money would be put towards a heritage project of lasting benefit then that would be different but in addition to general concerns the whole tone of those denying the need for policy changes as being "too difficult" are also a major factor in my change of mind. This not only applies to legacies but donations too. I'm surprised no-one has highlighted that a 33% decline in fundraising, a significant hole in the accounts, has co-incided with the rise in criticisms of recent management decisions.

Both a change of direction and a change of tone by those Trustees currently and recently in office would be welcomed. Restricting AGM question opportunities will only reinforce further antipathy.

 

Sophisticated tools rely on good data. For sampling, that will rely on a sufficiently broad data set to understand hwat an average might mean, and also to consider the demographic trends underlying.

I suspect that such a model would, at most, be useful at a sector level.

 

I think expecting loco overhauls to be paid out of running costs is extremely optimistic. For example, you could spend £100k on an overhaul and depreciate it over 10 years, so £10k per year. If you are really cute, you put £10k per year away for the next overhaul - and then find the next one costs £250k and you are still £150k short - just because that sort of thing happens! So budgeting for a single loco is really hard. And infrastructure similarly - your predecessors could spend £5000 on a bridge, depreciate it at £50 per year over 100 years and then you have to explain why the accrued money no longer pays the £250,000 repair a century later ...

Probably the best you can do is where you have a department (a C&W that needs to keep 30 carriages running, or a loco workshop that needs to keep 6 locos going) can probably work out an annual budget of sorts. The more assets you have the easier it is at least to budget - if, for example, you need to keep 30 carriages running and they need a 7.5 yearly door and lock, 15 year refresh and 30 year total overhaul each, then you can roughly predict how many of each you need to do each year: 2, 1 and 1 of each type each year. In other words, accurate budgeting requires throughput of projects of known magnitude, and locos really fall into that camp.

On legacies: it is a foolish organisation that banks on them in advance! You simply don't know what is coming.

There is also a slightly arcane point which is hopefully explained in the relevant accounts, which is that the general accountancy principle is that you need to represent legacies in your accounts when they become known about, but there is often a delay before the actual money is paid across and available - sometimes that can take more than a year. That means a charity that receives a large legacy and shows it in their accounts may not have that money to spend: hopefully that is explained before everyone starts mentally spending the cash!

Tom

 

NELPG and the LNERCA both promote heritage projects, both welcome legacies and would make good use of your bequest - have minimal administration costs! Just sayin'!

 

If realistic figures are put into the equation, the results are realistic. An industrial 0-6-0 is going to command £500/day and should be looking for 100 days/year. That’s £50k/year or £500k for the mythical 10 year ticket. A medium size ex BR loco needs to be looking at £1300/day and a similar number of streaming’s. That’s £1.3m. There will be some maintenance during that period to come out of that sum but those are realistic figures. Of course, some locos will not get 100 streaming’s but that’s the sort of target to be aimed for.
If a railway has its own locos, they need to be costed similarly and allowed for in the budgets. A line like the NYMR needing four locos/day needs to be budgeting about £5.2k/day or about £2m/year. We did a similar exercise on coaches a while back but I can’t remember which thread we did it on. I think we came to a conclusion that, for a fleet of 30 coaches, we were looking at about £1m/year to cover routine maintenance and major overhauls. Tom may be able to find as he was involved.
And that’s before you consider infrastructure and track.