North Yorkshire Moors Railway General Discussion

Thanks for the positive suggestion. Such communication must also be clear and honest. As Steve is so fond of saying Bulls*** baffles brains. It doesn’t have to the CEO or either Chair but I agree communication should be better. That also requires willingness by all involved to listen and be prepared to change possibly deeply held beliefs.

 

Firstly, just let me say that as with several others here, while I frequently disagree with what you say, I absolutely support your right to hold the views you have, and welcome the engagement here: a one-sided debate is not a debate at all.

I'm sure you would also agree that the railway is in a difficult financial position, and therefore needs to increase income, or cut costs, or both. Where I am not sure is what your prescription is for that: I've got the sense from you of lots of things that can't be done, but not much of what can be done.

On the cost-cutting side: you seem to have ruled out significant staff cuts, on the grounds that redundancy is expensive. I agree with the latter point, and also that redundancy should be avoided if at all possible, not just on cost grounds, but for moral / morale reasons. But that doesn't mean headcount can't go down through natural attrition: it requires a laser-like focus to avoid new recruitment when someone leaves, always asking the question "could a volunteer do that? or "could an existing member of staff have their job boundaries shifted?"

Frequently when the subject of volunteers comes up, particularly when doing individual critical roles, your stock response has been "volunteers can't do that". I'll give you the benefit of the doubt that you are talking less about capability, and more from an overly-legalistic reading of the point that volunteers can't be forced to do any particular kind of work or at given times, and therefore can't be relied on to do time-critical stuff: while there may be a legal nugget of truth in that, I'd encourage you to simply look around the rest of the sector - and the wider volunteer community - where thousands of people are doing critical jobs, and ask yourself "how do they manage to get volunteers for roles we fill with paid staff?"

The other elements of cost cutting you have put forward is around reducing service and reduced use of steam. On that latter point, it comes from weak economics in my view, an over-emphasis on just the fuel costs within the overall cost base. Fuel is only part of the traction cost, and traction is only part of the operating cost. On the latter point, while clearly it doesn't make sense to cart volumes of empty space around, you can't cut your way to profitability in a business that has high fixed costs and low variable costs. If you cut the service, all you end up doing is spreading the fixed cost over a smaller base, which just adds to the cost pressures - and therefore disincentive to travel - on those remaining passengers.

So much for reducing costs, what about increasing revenue? This is where I have drawn an almost complete blank in your writings. As far as I can see, the one solid idea is "appeal to grant-giving bodies". But you can't build a business case around that: grants should be the icing on the cake, not the cake itself. I think from your writings the Arts Council England grant was of the order of £1m - which is great, but over how long? How many years are you going between each £1m grant, because that is the duration you have to amortise the cost. In other words, gaining a £1m grant is great for the article in that month's Heritage Railway magazine; but leaves you nothing in other years. And even then, a grant isn't free money: you have to deliver something for it, so the impact on the railways profitability may be much less than the grant suggests. Great if it achieves an objective you already had - restores a building, or modernises your IT, for example - but the headline figure rarely makes as big an impact on the funding deficit as might seem. If you are not careful, a £7m p.a. organisation losing £500k per year can get a £1m grant and become an £8m p.a. organisation still losing £500k per year!

Beyond that, I'm at a loss as to what your revenue generation ideas are. You seem to have no desire to increase membership numbers, seeing them as a financial drain, even though in hard cash terms, members provide a small but welcome boost to finances. You seem to have more or less written off passenger growth, putting forward many (valid) reasons why current cost pressures might dissuade passengers, but without the further thought about how you could challenge that.

So the TL,DR: you have to cut costs, or grow revenue. Everyone agrees on that. But what I hear from you inevitably boils down to reasons why costs can't be cut, and reasons why revenue can't be grown, and a "Hail Mary" move that the answer will come from increased grants. So the valid question is: what does your financial future look like? How do you propose to balance the books?

Tom

 

Precisely that. All need to be willing to listen and change beliefs if required. All I would add is that it will require a sustained and sincere effort from the board and management and that the first move should come from the board and management and preferably before the morale becomes worse. Waiting until the frustration turns into anger would be a mistake.

 

From what I have been reading on here, with no personal knowledge, the railway will sink unless someone takes drastic action. As the management seem only to be rearranging the deck chairs so that less people can sit on them, a threat of a volunteer strike is the only other apparent possibility.

Whether or not that social media policy is a good one in general, and whether or not it is appropriate for this particular railway at this particular time, those in charge need to engage somewhere.

 

Engagement is a two way street. Someone has to make a first move. Let's see what next week brings.
Sawdust.

 

Absolutely! Everyone needs to stop calling for some people to be silenced; and everyone needs to be civil to everyone - even people who they think are horribly wrong/confused! (Just calmy/politely explain to them how/where they are 'confused'.)

You make many good points, all of which I agree with - but let me focus in on this one.

Looking around the sector, I think the NYMR has to do both - but always 'focus' extremely intently on controlling costs. The current leading people at the NYMR have not, historically, been as intent on that as they should have been (or, slightly worse, been too cost-conscious in the wrong areas). Alas, current law means fixing a big part of that financial hole - on the expense side - will be a slow process. The line is now in a hole (in financial terms) which it can't quickly/easily escape from.


Which brings me to my second main point - one you didn't mention: financial help from supporters (in legacies, etc). The logic that follows there is very simple.

It is, I think, accepted by most everyone, that the NYMR needs substantial financial support (donated, not loaned) from the outside; without it, the line cannot long go on. (Hereinafter, 'point 1'.) How long 'long' will be, I don't know enough to say; a few years, is the impression I get.

Many (most?) of the people who could provide such donated substantial financial support from the outside are unwilling to do so, because they have lost confidence in the current management. (Hereinafter, 'point 2'.) (To confirm that perception, several of them have spoken publicly to this point).

It would seem to me that if the current management want the line to survive (which I accept that they do), point 2 indicates what they need to do, per point 1.

It has been previously said (in effect) that if people did not accept that they needed to contribute to the line, under its current management (like them or not), the line would fail. I would suggest that this gets hold of the wrong end of the stick; it is, instead, the current management who need to make a decision, under point 2.

That would not guarantee the long-term success of the line, of course; a number of steps (which I won't detail) would have to follow. But without the first step, none of the others could follow. I seem to recall a quotation, which I cannot at the moment recall, about how when sacrifices are called for, everyone must sacrifice. Just so.

Also, having sacrificed themselves, they would then be in a more favourable/believable position to request that people who are, legally difficult-to-change, part of the line's current unsustainable cost structure, follow their example. (In effect, to start digging out of the hole the line is in, on costs.) Yes, if many of those people do as requested, the line will have to move quickly to replace those who are essential, with volunteers. But, financial holes don't vanish easily.


Mind, I do not expect the current management of the line to see the logic laid out here, and follow it. Then again, had they been perceptive, they wouldn't have painted the line into its current inescapable corner, by trying to adopt an unworkable business model for the 'business' aspect of the line (which involved hiring/retaining - the problem pre-dates them - a lot of un-fireable staff, etc).

We shall see, though, what is truly the most important thing to them: a) retaining their control of the line; or b) the continued existence of the line. Because points 1 and 2, if correct, say that those two goals are incompatible.

Noel

 

I feel that I have been misrepresented by @Lineisclear over the course of this argument. It is true that I do feel that there are some high high salaries in the SMT that could usefully be reduced, particularly certain ones at the top of the tree who are paid as consultants and could be terminated quickly, with their roles taken up by other members of staff, and it is quite probable that natural wastage could be usefully employed if there wasn't such a headlong rush to replace anyone who leaves. This really applies to administrative staff- all the engineering staff are desperately needed.

As others have said, communication is vital but I would phrase the need slightly differently: what the NYMR really needs is a people-friendly leader, someone who can unite the aid staff and volunteers to work together to fix the problems. There are people who can lead in individual areas, but what is needed is someone who can orchestrate them. Sad to say, the present CEO does not seem to be that person, and she seems to have only one weapon in her armoury, which is seemingly one of longer term destruction - cut maintenance budgets, cut anything that looks like it might involve more effort than picking up a phone, run down services and price the business out of existence. She has had her chance and has failed to make anything better, on the whole. It is now time to say "Thanks, but it's not working" and move on.

 

Tom,
I agree fully with your assessment. I think the underlying problem for the sector is that a model that is based on the public paying enough to make heritage railways viable is becoming increasingly unrealistic. My personal conclusion is that costs can’t be cut enough to restore its viability, at least not without making the railway a lot smaller. That leaves new sources of income which need to generate a huge amount over the next few years. Far from not valuing members I think they are potentially the salvation of the NYMR and some others. When you join an organisation engaged in most other leisure activities you expect to pay fees that ensure the organisation is viable. After all that is how the NYMR started before it could sell tickets to the public. If the capacity of the public to cough up is no longer sufficient I think the burden has to fall more on the shoulders of those who want to see their railways continue. Conversion of the operating entity to CCBS potentially offers its investors ( including the wider community) the opportunity to vote on the way the railway operates instead of the very limited voting influence in a traditional charity. The question is whether such closer involvement and greater influence can justify higher membership fees? I think it may come to a choice between that and full or partial closure as I can’t see the very substantial sums required coming from anywhere else.

 

People are not going to donate (myself included) without seeing both a change in attitude and more importantly a plan to reduce the cost of administration, along with debt reduction and increased spending on the infrastructure.

Sawdust.

 

Absolutely. There's no point raising more money if it is all just going to end up p****d down the same bottomless pit. We have all - except @Lineisclear! - saying that the cost base has to be reduced, particularly in the administrative arena. It reeks of the Thatcherite era of having so many people working out the cost of everything that any potential savings to be had are dwarfed by the admin cost of finding them!

 

Then smaller it must be.

Sawdust.

 

I have long been saying that one of the NYMR's greatest weaknesses is the lack of communication to its supporters, whether it be volunteers, members or donators. And by communication, I don't mean spin, leave that to the politicians. We used to have a good magazine in Moors Line until it was hijacked by the powers that be and turned into a spin document. That caused an outrage amongst its membership but all the complaints fell on deaf ears and we still have the much rubbished Moors Line published every quarter. It is still getting complaints today as simply being management spin and I hear that there was a request to return to the old magazine in the latest volunteer forum, a request which fell on deaf ears despite the current magazines shortcomings being listed.
Communications with stakeholders need to be factual and give the information which is wanted, whether it is good or bad. That way, speculation is much less likely. All those except the privileged few (and I mean few) know nothing about the success or otherwise of the 8 day Thomas event. All that has been revealed is that 'it covered its costs'. That doesn't tell us whether it was 5p, £5, £500 or what and did the railway make more or less than it would otherwise have done. Perception is that, overall, it lost more revenue from lack of ordinary services than things would have done but we can only speculate because nobody has ben told. General traffic figures are a well guarded secret with a question asked about them by a volunteer at an open forum being dismissed as irrelevent by the CEO.
We don't want spin; we just want the factual truth and plenty of it. The present SMT seem incapable of doing that.

 

I have similar things about funding model myself. It is certainly the case that of if I were a golfist I would expect to pay to participate, whereas as a volunteer driver I don’t have that expectation and it is fair to ask if that remains sustainable today.

As a thought experiment I have wondered what the pricing would look like. Would the charge for footplate crew be higher or lower than for platform staff? You could argue it should be higher because everyone wants to be an engine driver, but you could argue the opposite given the commitment required. Probably best for it to be a flat fee for “volunteer membership “ but that’s a brave pricing model. Asking volunteers to pay more for the privilege of giving up their time.

I am not saying it isn’t possible to charge members more, nor to possibly charge volunteers more, but it does seem to me to be a very problematic transition to make. It is likely that the number of people willing to pay to volunteer would be smaller than the current number of volunteers.

If for example golf club scale fees were charged to be a member, and that you had to be a member to volunteer (which is not the case everywhere) then those fees would likely be £750 to £1000 per year. Add in the travel and accommodation fees already paid by volunteers and that’s going to be unaffordable for a good few, unacceptable to others.

I think that scale of fees is also unlikely to be successful with non volunteer members. What could the railway offer as value in exchange?

So to plug the current revenue gap you need around £1M. That means finding 1000 members willing to pay £1000 for their membership, but if you lose 100 (10%) of your volunteers then you’re probably going to need 20 more staff. Who will cost more than half that, so you would need more like 1500 members paying that, or you have to charge even more, which means in all probability more people walking away and the cycle starting again.

I’d want to carry out extensive research because I think it would be very easy to design a scheme which made the situation worse not better.

I still think that addressing communication and engagement is likely to be more fruitful. And that any fundamental change to cost of membership will need first a very strong sense in the rank and file, that whatever fee is proposed ( whether it be £100 or £1000) will represent value for money.

 

With due respect, your analogy is flawed. Other than what you pay a golf club generates no income from you playing golf. By volunteering to drive a locomotive, operating a signal box or guarding a train, you are saving that railway either cost of a paid member of staff to do that job, or the loss of revenue from having to cancel that train or trains.

Sawdust.

 

Just on the last paragraph: if the current management don't strive for the continued existence of the line they will have nothing to be in control of. Why they can't or won't change direction is a bit of a mystery.

 

The difficulty of getting members to pay more though is you don't know much about the elasticity of demand.

Let's take a Bluebell example (just because I'm broadly aware of the maths). We have about 9,500 members, but 2,500 are life members, so about 7,000 annual members paying £30 each which gives an income of £210,000.

You could put the membership up to £40 which would generate a useful (though hardly transformative) additional £70k per year. Except you don't know how many people would be put off by the additional price. If you turn 7,000 members paying £30 into 5,000 paying £40, you are worse off.

The other option would be to increase those numbers. But what would entice new members to join? The absolute peak of Bluebell membership was I think just over 11,000 (so about 1,500 more than today) in the immediate aftermath of opening to East Grinstead. That rather suggests to me that while we should of course do everything possible to attract new members, there probably aren't thousands upon thousands of untapped prospective members out there - and if there are, why aren't we attracting them already? If we went back to those 2013/14 sorts of levels, it is still only about £45,000 extra in gross income.

The bottom line is that you'd have to be very very careful trying to get members to pay more, because you risk losing more in reduced numbers than you gain in increased fees. And even done carefully, it feel like something that is going to generate tens of thousands of pounds: useful, but not transformative for an organisation that estimates its funding gap at, say, £1m p.a.

I hadn't really thought about the "pay to play" approach outlined by @21B: the only thing I'd say would be that while some long-established volunteers may feel they are getting a good deal, the risk is you put up a huge barrier to new volunteers, and essentially end up killing the goose that lays the golden egg. In a sector which has a constant refrain of "we are struggling to recruit volunteers", charging them for the privilege is not going to make that situation improve. I suspect in addition that many volunteers are generous with appeals as well, and you may find £500 extra income from charging the volunteer is balanced by £500 less to your next appeal.

Tom

 

I agree. That’s rather the point, but the thought exercise was about what would be needed. And the unlikely prospect that 1000 people could be persuaded to part with £1000 each per year. Now would 500 people part with £2000 or 200 with £500? I don’t know. No one does, and that’s what makes it unknowable without considerable research and even then I think it would be a voyage into the unknown.

And all that is before we consider the fairness or otherwise, I value the fact that heritage railways are inclusive and open and do not require wealth to participate.

 

As a further thought, if railways exist primarily for the benefit of the community then it follows that the volunteer is saving the line money. If the railway is primarily there for the enjoyment of the members including volunteers, then maybe the answer is different and the signalman, driver or whatever should be paying more for their pastime. It’s a question of perspective.

@Lineisclear suggested that financial sustainability would involve membership fees increasing. My reaction is very similar to Tom’s but from slightly different angle, but with a similar conclusion…. That it seems unlikely that you can increase income sufficiently that way, without adversely impacting some other cash stream, to actually improve the situation.

 

To be brutally honest, I don’t think all heritage railways will be sustained. Those that are most likely to do so will have these characteristics imho:

1. highly engaged membership and a strong positive relationship with the management structure
2. Infrastructure that is by construction lower maintenance - built on chalk, relatively few bridges, etc
3. Exceptional cashflow management
4. Good catchment area
5. Willingness to evolve and experiment with new experiences for visitors
6. Cost control and a focus primarily on serving the available traffic (whatever that is) with minimal equipment
7. A strong brand and a good value proposition….e.g Bluebell or Festiniog etc etc