WSRA Trustee Election Hustings

Thank you Frank for the reply on behalf of the 4 WSRAMAG candidates.

 

" ... there are potential advantages to the PLC giving access to the WSRA at a discount relative to what it might charge a third-party operator, if the net result is that the PLC makes a lower profit (which would be subject to tax) and thereby the Charity makes a bigger surplus to be re-invested in the railway...............Surely what is important is ...... how the railway as a whole ........ can use the individual strengths and resources of each body to maximise the income of the railway as a whole......."

Quite. Maybe I am just being simplistic or naïve, but....I fail to see why the PLC needs to charge the WSRA for the QB 'access' at all. Surely the QB is part of the 'one railway family' and working as a means of generating money to support the railway. Accepted that, if the WSRA pays money to the PLC in the form of 'access fees' rather than as increased profit from the QB, the result is still that the money ends up supporting the railway, but......along the way both organisations have to spend time and money administering and accounting for those fees, so surely the net result is less money available than might otherwise have been? [I'm reminded of this infernal 'internal market' nonsense within the NHS as an example. ] Or is there some tax-reduction benefit to this process of which I am unaware?

At this rate, I shall have to charge my wife for mowing the lawn to cover the cost of her charges for cooking my dinner

 

You forgot to add the "love and kisses"

I think it is high time WSRA members on this forum deserve to hear from the WSRAMAC candidates (or at least one of them) rather than "a spokesman".

Steve

 

Can we all concentrate on the issues and needs to effect change next week at the AGM, rather than returning to the personalization interchanges by all that led to moderator intervention on the other thread. We are beginning to see a form of consensus on these. To bicker over attributes at this stage only benefits current incumbents and perpetuates the present problems.

 

Its wonderful to see that you are still the bigot you always were. Hopefully from your reply the voters will realise that a vote for edge is a vote for more back biting etc.

 

The reasons for charging are complex but the tax regulations may help to understand at least one aspect.

The following analysis is based on the assumption that both the PLC and WSRA are separate bodies with their own set of accounts and tax liabilities to the HMRC. If the PLC charges for the hire it counts as income which, subject to appropriate deductions for expenses, is taxable by the HMRC therefore the lesser the figure between income - expenditure (i.e. profit) the less becomes the tax charged by HMRC. In the same way the operation of the QB by the WSRA means that the charge levied by the PLC counts as an expense which can be charged against the income from passengers and again the difference between income - expenditure (i.e. profit) becomes taxable by the HMRC hence the need to minimise that profit figure.

As I understand the situation the QB is operated by the WSRA as a means of generating income that will be donated to the PLC and therefore - in the normal world of co-operation - each party would seek to minimise its profit figure to give minimum funds to HMRC and maximum funds to the PLC. However I get the impression that this is NOT the case as the WSRA appears to retain the funding for its own use whilst the PLC seeks to make charges that recoup some of the "lost" income - such is the cost of mistrust between the 2 parties at the present moment.

This reiterates my point made in my previous post that the trustees need to be financially competent (among other things) and be both more aware of how their actions affect the body for whom they are "employed" as well as understand the consequences of their actions on bodies with whom they are associated either commercially or socially.

 

And wonderful to see you still have a sense of humour.

Steve

 

I may be wrong as it has been a couple of years since I worked in the office at Minehead. The 'charge' to the WSRA for the Quantock Belle is simply the haulage fee (i.e. coal, water and fair wear and tear to the loco) this is also discounted for the WSRA so they pay a subsidised rate for their train and receive all the monies for the passengers travel even though it is over the WSR line. They also, of course, take the full ticket price that includes the food. Basically that means the WSR plc makes a donation (the discount) towards each QB and the WSRA makes all the profits. That seems quite reasonable to me as the plc has to account for its actions as a public company.

 

Because they are two separate organisations, one of which is liable for corporation tax. The revenue are very hot on transfer pricing and its use to transfer profits esp if there is a suspicion of tax avoidance.

 

Very true, the days of the keen amateur should have been left behind years ago. These are commercial organisations and as such needed suitably knowledgable staff.

There is however the catch 22 that sometime those that seek to be trustees are often the very people who should not be considered as by putting themselves forward they are showing themselves to be ignorant of the scale of the task.

Those who understand the risks and responsibilities will not stand for the very reason they understand those risks and responsibilities.

 

Just for information the Plc's charges (as per the official website) for charter/special workings, and presumably before negotiation, are:

Internal Charters - consists of one steam locomotive and up to six carriages (the set of coached may include a buffet car but it will be not manned – see catering prices for this facility) and are charged at the following rates dependent on mileage:
20 Mile Trip (i.e. Minehead to Bishops Lydeard) £1500.00
40 Mile Return trip (full length of line) £2000.00
80 Miles – or two return trips £3000.00
If an extra locomotive is required or a specific locomotive is requested this will be an additional charge dependent on the hire rate of the additional or specific vehicle.
Any additional coaches requested above the six provided will incur an additional cost of £400.00 per vehicle.

External Charters – any outside operators wishing to bring a train from the National Network to the Railway for Commercial purposes over the full length of the Railway and return (40 miles) will be charged £1750.00 including, if required, a West Somerset Railway Travelling Ticket inspector to sell WSR tickets to passengers at half the standard fare. Additional charges will be incurred for the following:
Coal or Diesel charged at cost plus current VAT rate (Water and oils for Steam engines are gratis)
Use of Minehead Turntable: £200.00
Additional locomotives to be attached to the train on the West Somerset Railway will be charged at that vehicles hire rate plus coal or diesel.

I appreciate the QB access/haulage requirements are bespoke and subject to negotiation, but the above info might help inform the debate here about QB fees.

Steve

 

I said I would reply on Monday, but I have managed to finish the piece of paperwork I was focussed on early, and so have a few more minutes than I expected. I recognised when I read it that this was a short question but potentially (if it is to be valuable) a long answer.

With respect to Frank, it is an easy answer to say 'all things are up for review', which does not in fact answer Ken's question. Trustees following their duty will always have things 'up for review'. Quite happy to sign up to that. Quite apart from being able to have a spokesman put that forward as a principle, I can demonstrate that, in my time as WSRA Chairman we significant reviewed and updated more than one area of endeavour. That is never easy

To actually answer Ken's question:

(1) Journal. From my time as WSRA Chairman, and from the comments I received, I know that the general membership greatly value the Journal. That is probably less so for working members close to the line day-to-day, who will have been aware of the things reported in the Journal as they have happened. I have a full set of the Journals back to No.1 and dip into them every so often as the Railway's 'journal of record' to answer 'historical' points or to remember where we came from. If the membership resolution in passed, membership will cost £20. Given even the cost of postage, a quarterly Journal of the quality that we produce does appear to reflect good value for money, from where I sit.

Of course, as a life member, I paid my dues long ago and it now reflects exceptional value for money. In my case IIRC I paid £120 for life membership spread over 3 years. That reflected about a third of a week's earnings for me in those days and so was a significant sum to me then, and in the difficult financial times of the early 80's was no doubt useful to the WSRA. WSRA Life membership has been a feature of my loyalty to the Railway over the years, especially when I lived further away, and it is a source of disappointment to me that we do not still offer it. Members may remember that I opposed the removal of life membership a couple of years ago.

I understand that we are moving increasingly into an electronic world, and who can say if a paper Journal will survive and for how long. I strongly suspect that the WSRA Members DO regard it as good value.

(2) WSRA Manager. It is fashionable to attack Susan Kaufman. To that extent, this is something of a 'loaded' question. Is she good value? Once again, lets have some facts rather than platitudes. She worked for the Trustees for about 9 or 10 months of the period that I was Chairman. She work hard and loyally, and kept to the direction and agenda that the Trustees set. At that time we had no Treasurer (despite strenuous efforts to recruit one) and the financial admin had problems when I (and she) came on the scene. There were, for example, no monthly management accounts. With the assistance of the external accountants, she got that under control. The external accountant told me that, had she not been there, we would have been likely to have incurred accountancy charges equivalent to most of her salary. So in my time as Chairman, yes, definitely good value. I am aware that my successor as Chairman, David Holmes, had the same view.

What her value has been more recently, I am less in touch with, but I have no reason to think that she has been doing other that following the line, and working on the matters requested of her set by the Chairman and the 'kitchen cabinet' of present Trustees who seem to be calling the shots. What else, as an employee would you expect to her to do?

That having been said, I will not have inappropriate behaviour by anyone working for the WSRA. In my time as WSRA Chairman a senior WSRA staff member behaved inappropriately to a member of the public. They did something they regarded as a joke, but the member of the public did not see it that way, perhaps understandably. Against quite a lot of criticism for even doing so, a disciplinary process was run, and the staff member received a written warning. Nor am I afraid of changing staff structures, however long standing, if they are not of continuing value.

My working life often deals with organisations going through a period of self-reflection, thought, and change. We should not underestimate the work involved, and the need that there will be for the support of the employed staff, especially the manager, in doing so. I read through ALL the previous WSR thread before beginning to contribute and I have to say that at least one of the WSRAMAG 4, who used to post regularly there, but has now disappeared into lofty silence, would appear to have expressed very strong views about the WSRA Manager, on very little evidence, and might be in some difficulties making decisions about her future, were employment law to be engaged.

Ken, can I please have the prize for the only answer that does answer the question with other than generallities?

kind regards

Robin White

 

Please remember the forum rules - and consider what other people with think of the railway's various spokespeople when they read this thread. As you have chosen to use Natpres as your 'internal' discussion forum, please respect the local rules and other members, whatever their views or involvement.

Thank you.

Richard

 

Transfer charges are an inevitable requirement when two trading organisations interface and sadly very often a bone of contention.

There are many possible arrangements, for instance three that spring to mind ;

In the past, when enjoying the Bluebell 'Golden Arrow' dining train one brought a ticket for the journey, (revenue to the 'Bluebell) and paid separately for dining (revenue to the catering outlet). Now the Bluebell has brought the catering 'in house' arrangements may be different I realise.

The current arrangement on the WSR whereby the WSRA pays the plc an access/haulage fee. ( stated I understand to be an 'at cost figure'.)

The two parties share the total revenue. ie plc and WSRA could agree a formula to apportion the total 'take'.

It would seem that all three scenarios are relatively simple to administer, can meet fiduciary and tax requirements and be equitable. Difficulties will occur when there is a lack of empathy and trust between the two parties.

There also appears in this discussion on NP to be the not unusual mixing of terms. (ie use of the word 'profit'.) If for instance the WSRA, after paying it's access fee to the plc and covering the cost of catering, has a surplus this is not a profit, it is a contribution towards covering the total cost of the organisation. If this contribution plus all others eg members subscriptions, contribution from other sectors of the Promotions businesses, donations etc exceed the total overheads then the WSRA has a profit. (How it then manages that profit wrt tax efficiency, fulfilling stated aims etc is another issue).

Quite separately it is true the 'revenue/excise' in the UK (as in most countries in the World) are exercised that transfer charging is not being used to mask true 'earnings'. Two of the most obvious routes are cross national borders and relevant to the WSR, twixt charities and non charities. In other words if the contribution from running the QB was being distorted to engender profit in a specific area. The plc charging the WSRA significantly less than cost might be construed as such an action.

There would superficially appear to be little wrong with the current plc/WSRA arrangement wrt charging. Obviously access to the actual costs would validate or otherwise this statement. What is clear is that in a situation where there is apparently very little trust in the plc Board by the WSRA Trustees transfer charging can easily become a source of contention. (Whether the current QB modus operandi is appropriate or not is a separate issue and should be investigated as part of establishing a WSRA Strategic Plan.)

A new group of WSRA Trustees (following recent changes to the plc Board) could help, that is reestablish past harmonious relationships twixt plc and WSRA. The best hope is for four new Trustees with a proven record of harmoniously working together and a sense of purpose and professionalism ie the WSRAMAG four, Crudge, Price, Randles and Rowe.

Michael Rowe

 

Mere semantics. Although they are called access fees they in fact barely cover the costs to the PLC of running the QB trains. Furthermore not all the QB profits are returned to the PLC.

 

We know a number of figures now:

WSRplc quote £2,000 for a round trip where they supply the full train - i.e. loco and coaches, and £1,750 for incoming charters, presumably just for loco but also arrangements for bringing of the network and path on the West Somerset.

The QB stock is supplied by the WSRA and appears to be about half the length and weight one would expect a charter to be.

The fee charged is £1,250 to £1,400 based on available information from last year.

I wouldn't presume to estimate or comment on costings used by others on here, although I have a reasonable idea what costs are likely to be. The above figures probably give a reasonable idea of where things are in relation to costs/expected propfit the WSRplc may be seeking from the 3rd party charges.

The simple fact is that, if WSRplc considers it isn't charging enough, then it should open a dialogue with the WSRA and negotiate an increase. Basically, it seems to come back to some involved with both organisations are more interested in complaining about the other rather than having discussions to settle the points of contention (and, indeed, we have no indication WSRplc management have any concerns with the level of charges). These costs issue is pretty simple, and provable numbers should be capable of being placed in front of both parties. Other areas of disagreement are potentially very complex in comparison.

Incidentally, true "transfer pricing" applies within large groups of companies, where one controls the other and there is a small company exemption. Hence, "transfer pricing" doesn't apply here but, as noted above, charges between Charities and commercial companies are also subject to potential Revenue challenge. The haulage for the QB seems to be between actually two commercial companies - the WSRplc and WSRA Promotions - but the later Gift Aids its profit to a Charity, the WSRA. Hence, care is needed that profit isn't being sheltered by WSRplc, which is a taxpayer. Dining trains can also be "interesting" in terms of VAT!

Out of interest, how many covers does the QB set offer?

Steven

 

You rightly highlight the difference between formal Board Meeting and public forums! (or is it fora?)

However, I am afraid my experience is that you can present hard numbers to a Board and still have individual Directors basically accuse you of fiddling the outcome you wanted, even though you didn't prepare them and the Director in question was part of a detailed review of the basis of preparation - I know, it has happened to me more than once!

Perhaps the reason such incidents can occur in our movement and shouldn't in commercial life is the passion which the enthusiast in us brings to all aspects of Railway life. Heart over-ruling head. This can be a great blessing but can, as the present situation shows, also be a major curse. Put another way, business shouldn't be "political" - a paper will be presented to a commercial board without it being seen as coming from a particular "faction". For a variety of reasons, railway Boards tend to be erroneously (and potentially very dangerously) viewed as more like local or national Government, where there are camps, pseudo "political parties" even, and everything risks being viewed as part of an "agenda". This is often the basis of a breakdown of trust and does make Railway Board meeting a place where reliability of "facts" and assumption of "good faith" cannot be taken as being present from all involved. I know commercial business can suffer from this, but usually based on years of shared experience that "old Bert always promises the earth and never delivers" etc. but it is far more of a risk in an organisation where peoples' interest and passion is the reason they are involved.

Given a clear (and probably understandable) lack of trust between different parties evidenced on here, I hope you are right about the Board working together in the future, and the way the Railway continues to run suggest you may be, but I do still feel there is the risk and I suppose my message to all candidates is that you may need to consider how you assure your electorate that you will ensure things improve whilst still being able to reassure them that you will work in a manner that ensure they do change and improve rather than there just being lots of circular arguments based on mutual distrust.

Steven

 

I would think the financial contribution made to WSRA by the QB is smaller than popular belief, if one considers the overhaul/heavy maintainence costs met in return from the general WSRA funds.

 

Thank you Steven for your insights. I deliberately used 'transfer charges', rather than 'transfer pricing' as we are talking inter companies rather than intra group.

Managing a group of International process engineering companies 'transfer pricing' was a daily bug bear I remember. The perceived injustice of the cross charges and transfer pricing a reason to beat ones way to the MD's door.

The difficulties on the WSR are mainly cultural ie inter personal.

Repeat, please vote for Crudge, Price, Randles and Rowe. Four new Trustees can bring about change.

 

Perhaps now we can put the matter of QB haulage to bed. To my knowledge the WSR plc have never complained about the haulage charge for the QB and have just reviewed the charge every year in line with all normal business practices. However the Trustees and others (WSRA) have complained over and over again and also 2 exiting Trustees constantly claim that the money that the WSRA pays to the plc to run the QB is a financial benefit that the WSRA gives to the plc.

Hopefully it is now clearly stated that claiming the payment charge is WSRA support for the WSR plc is a nonsense., Another massive red herring bites the dust.