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West Somerset Railway General Discussion

Discussion in 'Heritage Railways & Centres in the UK' started by gwr4090, Nov 15, 2007.

  1. echap

    echap Member

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    It seems to me that there is a real risk of losing out on future HLF funding to the WSSRT and yet most posters on here do not even seem bothered at that potential loss. Considering how much work goes into HLF bids, it seems crazy to me that all that hard work risks being thrown away, just to satisfy the "10" and their plan - which may or may not work.
     
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  2. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    I'd be very bothered by the loss of HLF funding, and I'm sure everyone else would be too. But I have been convinced that merging makes the prospect of grant funding more likely, not less. I appreciate some haven't been convinced by that, but at least we have now reached a disagreement on an actual issue that can be discussed rationally without recourse to releasing email trails and messy things like that. A shame it's only come out a few days after AGM papers with all the rants contained within were sent through letterboxes and email inboxes though!
     
  3. Paulthehitch

    Paulthehitch Member

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    Have you actually tried?
     
  4. Steve

    Steve Resident of Nat Pres Friend

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    Well, I've read and re-read echap's post and I can't work out what it is that you are asking if he has tried.
     
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  5. Paulthehitch

    Paulthehitch Member

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    To get an HLF grant for a carriage restoration.
     
  6. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    @ikcdab has addressed this, sounds like they made preliminary enquiries and were told they needed a track record with a smaller grant first, which the WSSRT have now applied for, got and spent. Makes sense to me. I only take issue with the suggestion that this track record would go up in a puff of smoke if a merger took place.
     
  7. Steve

    Steve Resident of Nat Pres Friend

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    Ah.
     
  8. martin1656

    martin1656 Resident of Nat Pres Friend

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    Wouldn't the HLF take it into account though if their was a merger, and the new charity, was to apply ?
     
  9. Jamessquared

    Jamessquared Nat Pres stalwart

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    I've been arguing for some time (mostly falling on deaf ears ...) that the membership body should not be a charity; and the charity should not be a membership body.

    In my preferred model, the operating company is majority or (preferably) wholly owned by the membership body. The charity is arms-length, but can award grants as it sees fit.

    The advantage of that model is that freed from being a charity, the membership body has more scope both for direct revenue support of its operating subsidiary; and to direct the strategy to be followed by the operating subsidiary. It avoids the issue sometimes postulated whereby if there is a divergence between the member wishes and the charitable aims, the charity trustees have to act in the interest of the charity even if that is against the wishes of their members, which seems to have been put forward as a big stumbling block.

    In my model, the members would pay subscriptions to the membership body and would set the long-term vision for the railway, which the company would be charged with delivering. Members would typically get some benefits (such as travel concessions); there would be an agreement with the operating company to provide those in exchange for an annual payment (i.e. subsidy) whose value would be not unadjacent to the annual revenue from subscriptions. The membership body would have no other duties, staff, premises etc, and so more or less all the subscription income would be directly available as a subsidy to the company, and could be spent in any way the company saw fit. (There would thus be an incentive to maximise the number of members so as to maximise the possible value of that subsidy).

    The charity would then be free to fund-raise to pursue its charitable aims, which would be focused on delivering enhancements to the railway. The charity trustees though would only be answerable to the charity commission, having no members to satisfy.

    Assets (including if it came to it the freehold of the land) would be owned by the charity.

    The membership body would, by virtue of its outright ownership of the operating company, appoint the directors to the operating company, and I would expect them to have some representation amongst the charity trustees.

    Tom
     
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  10. Lineisclear

    Lineisclear Member

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    There's very strange legal concept being promulgated here........that a merger doesn't involve one or both of the merged incorporated charities ceasing to exist in any meaningful sense. People talk about the new or merged charity as if its possible to simply to mix two corporate entities into one.
    There are only three options.
    (1) the assets and liabilities of the WSSRT are taken over by the WSRA. (2) vice versa or (3) the assets and liabilities of both existing charities are transferred to a new one. The corporate shell(s) of what is left behind could become dormant but in practice merger involves closure of either or both charities. As contracts and agreements would not automatically transfer merger is actually quite a complex matter.
     
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  11. 5914

    5914 Member

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    I agree entirely with your logic - and think it is probably one of the best ways to have a member owned railway, and benefit from having a supporting charity.
    However, my understanding is that this is not the approach being adopted by either of the parties to the WSR debate; both see it as being charitably owned - one group supporting a member led charity, and the other possibly not (having not made a statement either way).

    On the other completely separate point of whether HLF would see the track record gained by WSSRT in managing small projects transfer to another charity - my understanding having been involved in applications and managing resulting projects is that HLF would probably view it positively if charities with similar aims were consolidating (as would the Charity Commission), and I have experience where such consolidation has led to an enhancement of the bidding potential rather than loss of track record. (This would depend on the new charity being a true amalgamation which has continuity with its predecessor, rather than a new charity that merely has its assets)
     
    Last edited: Oct 27, 2020
  12. Paulthehitch

    Paulthehitch Member

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    Still too "Pygmalion" complicated!
     
  13. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    Again, I fear you focus unduly on the legal perspective. :) I'm sure you're right that contracts and agreements would not automatically transfer under a merger. That was what Ian contested was a reason not to merge. But both of you seem to be labouring under the impression that the candidates are proposing to "hit the merge button" for want of a better term, the day they get elected. That's clearly not the case. Like I said, at least some of the candidates have formidable experience dealing with these sorts of things, and whilst a merger is a complicated process, I feel confident that they will be "all over it" such that these issues are dealt with before the merger happens. New contracts and agreements can be signed before, concurrent or immediately after the merger (I leave it to the legal experts to detemrine the exact proper order) but crucially, agreement in principle to do all these things can be attained well beforehand. I would assume that would be a major part of the WSR restructuring process.

    With respect to bodies ceasing to exist, we were primarily talking about that with respect to reputations with grant funding bodies. Of course after the merger there will be no legally distinct WSSRT. But it seems to me that in the eyes of grant funders, there is considerable difference between a previous applicant going up in a puff of smoke, and spending the money wisely on their projects, while deciding that these would be better achieved as part of a larger structure, in terms of credibility to apply for larger grants. That was the distinction I was trying to draw.

    I would also remind you that it was your own report that suggested that "The existing Charities ... (at their choice) [could be] subsumed into the main Charity" So it must be a reasonable and possible course to take.
     
    Last edited: Oct 27, 2020
  14. Lineisclear

    Lineisclear Member

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    Tom , you've argued consistently and eloquently for the Bluebell model. I can see considerable merit in it not least that it works well. There are two possible downsides on which I'd welcome your view. Firstly Gift Aid on fares. I know this is contentious but other railways with controlling charities have persuaded HMRC. it's legitimate . The sums involves are potentially game changing. Secondly I don't think your model would allow the charity to cover the operating losses of a company it didn't control. If there's one thing that Covid 19 has brought into sharp focus it's that such flexibility may be highly desirable.
     
  15. ikcdab

    ikcdab Well-Known Member

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    Quite. And my point is that none of the ten are guaranteed places on the new board so cannot promise what its policies might be.
    It is indeed complex which is why the ten's approach is simplistic and naive
    Ian C
     
  16. Paulthehitch

    Paulthehitch Member

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    Just so and without I.M.H.O. an excessiveli complicated structure
     
  17. Jamessquared

    Jamessquared Nat Pres stalwart

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    On Gift Aid on fares: we don't collect that (and I've expressed the view before that it seems troubling in my mind, though I accept other places do manage). As travel, though, our fares are zero-rated for VAT - I had been under the view that you can have one or the other, but not both, which maybe makes the financial picture less clear cut? Interested if the NYMR experience is different on that. (It is also probably worth saying that in normal years, a considerable part of our operating revenue comes from dining services, and I am sure you couldn't reclaim Gift Aid on that in any case).

    On Covid: our emergency appeal was led by the Trust, with Gift Aid where appropriate, which I think answers that point. There was definitely some discussion early on as to whether that was permissible, which is why our appeal took a little while to start, but as I understand it, the guidance obtained was that covid was so existentially threatening that considerable leeway was allowed in what could and couldn't be supported by the charity.

    The significant advantage to me seems to be in allowing a membership-led railway free from the constraints that are put forward about the requirement for charity trustees to work in the interests of the charity even if that is against the stated views of the membership.

    Tom
     
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  18. Bayard

    Bayard Part of the furniture

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    @FrankC , I would be interested to know why it was decided to revive the WSSRT from its moribund state to do this and not have the WSRA take them on board.
     
  19. ross

    ross Well-Known Member

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    Tom, I'm probably just being a bit dense here, but where and how would operating volunteers fit into your model, and things like HR procedures be correctly applied?

    Overall it strikes me that what you have described might be met by one of the existing WSR groups dropping its charitable status, and becoming the membership group only, and the other existing group continuing as the charity, and having all existing assets vested in it.
    It would just need the PLC to accept governance from the membership
     
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  20. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    To move to that model it would require the WSRA to de-charity itself, and WSSRT encompass more things, and the PLC to have the majority of its shares owned by the WSRA. I think that would be even more politically divisive than the current trajectory!

    I'd imagine that all volunteers would be members of the railway society, and you'd say that the society supply volunteers to the Plc, and HR policies would be under the Plc. That's how it works on the GWSR anyway, although in our case the charity and members' organisation are the same body. A
     
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