❖ ‘Road map to peace’ for WSR
NYMR Trust chairman recommends new structure, as S&D Trust discussions continue.
Areport produced on behalf of the Heritage Railway Association has recommended a new structure for the West Somerset Railway.
Written by North York Moors Historical Railway Trust chairman John Bailey, the report was compiled as part of discussions between the West Somerset Railway plc and the Somerset & Dorset Railway Trust, following the plc’s notice to the latter to leave its Washford site by February next year (SR503).
The section of the report dealing with the S&D Trust is currently redacted, pending the outcome of further negotiations between the Trust and plc over the Washford site and the future of the trust’s SDJR ‘7F’ 2-8-0 No. 53808.
As this issue was going to press, both parties reported positive progress, with S&D Trust chairman Ian Young adding: “We’ve decided on some action points and that’s what we’re working through at the moment.”
Mr Bailey’s report goes on to “chart a potential road map to peace” for the WSR, stating: “Despite its history of factional infighting and near financial disaster, the essential ‘One Railway’ culture and unity of purpose has still to emerge.
“The most recent cause of division has been the decision of the plc operating company to serve notice to quit on the Somerset & Dorset Trust… It goes to the heart of the relationship between the operating plc and the charities that both depend on and support the railway. They rely on occupation of sites leased from the plc. It is unlikely that there is any outcome that does not affect materially the fortunes of all of them.”
Unlike most preserved railways, the WSR was set up in the 1970s with the plc operating the line and owning many of the assets, while the WSR Association existed as merely an unincorporated supporting body for volunteers – because the original intention had been for a commercial railway operating commuter trains into Taunton, as well as tourist steam workings.
However, in 1994, the association was incorporated as a charity, and later embarked upon its own commercial activities, including the restoration workshops at Williton, recently transferred to the plc – see story, right.
Mr Bailey recommended a new structure along the lines of many other railways: a new charity to take on the lease of the line from Somerset County Council and ownership of heritage assets – able to benefit from Gift Aid on donations, charitable rate relief, exclusion from corporation tax and VAT – alongside the formation of a new operating company as a subsidiary of the charity.
He also highlighted the problems that the current structure causes for fundraising, with separate appeals by the plc, association and the second charity, the West Somerset Steam Railway Trust. He wrote: “Who am I donating to and for what? You all seem to be competing with each other for my money! As long as such confusion reigns, fundraising performance will be sub-optimal.”
However, he voiced his support for the current plc, saying: “Whether or not people like or approve of the current management of the plc, they are the only viable game in town.
“Were it not for the current board of the plc, the railway would in all probability already have ceased to exist. They took on an insolvent business and turned it round so
at least it has a fighting chance of surviving the lockdown. Instead of personal attacks, they deserve recognition for what has been achieved and, above all, support in future. I’m sorry if this causes distress to some. I’m not in this to be nice. I tell it as I see it.
“In the event of the demise of the plc, the obvious course for the bank (which owes a fiduciary duty to its own shareholders) would be to rip up the track for scrap, and turn the trackbed into a, no doubt, very attractive cycle path which could provide a substitute and more environmentally friendly tourist attraction. My advice to those who wish to see the back of the current plc management must be: back them or buy a bike!”
Asked by Steam Railway to clarify this statement, he revealed: “I understood originally that the council lease was of trackbed and buildings. It seems that it included the track.
“It poses some interesting questions for an operational railway where the leased asset will need replacing at least once during the lease term and may need to be reconfigured.
“My advice to ‘Back the plc or buy a bike!’ takes account of WSR plc control of the crown jewels in the form of the railway’s operating licence. If the current operating company collapsed, then establishing an alternative licenced operator would take some considerable time. Any new operator would need to be adequately capitalised to afford the constant requirement for infrastructure maintenance and replacement. That would be on top of whatever was required to acquire the operating assets.
“Consequently, freehold ownership of the railway may afford scant protection. The various WSR supporting charities are restricted from taking over by their limited charitable objects, unless they secure Charity Commission approval to extend them. They would still have to raise the capital required and satisfy the Office of Rail and Road as to their management ability to run a safe railway.
“Meanwhile, maintaining the infrastructure of a deteriorating non-operational railway would become a potential drain on the freehold owners’ finances. It’s not just keeping the track up to scratch but the constant essential investment in bridges, culverts, embankments etc, without which a point of no return could soon be reached.
“Whether track is lifted and scrapped to pay creditors, or to reduce the freehold owner’s liabilities and help fund a Camel Trail lookalike, may be academic. It remains my personal view that failure to back and support the WSR plc would make a bike a sensible investment.”
In response, the plc stated that it “warmly welcomes the report’s recommendations and intends to commence a consultation process with its own shareholders. In addition, it will commence discussions with the other charities via the forum of the recently re-formed Partnership Development Group (PDG).
“Clearly, before anything can happen, a key part of any transition process would be to secure agreement from plc shareholders to vote in favour of exchanging transferable shares for membership of a charity with appropriate voting rights and which would normally involve membership fees.
“It is also clear that any such reorganisation will throw up significant internal challenges. The most obvious of these is the future role of the existing charities, although Bailey states there is no reason why the charities that currently fundraise for their own limited objects should not continue to do so.”
The WSRA stated: “We welcome this pathway, and wish to work together with the other members of the railway family to work towards success. We firmly believe that the only role for the WSRA is to fold itself into the proposed new charitable structure. In that event, all WSRA assets would be transferred to the new charity, and the WSRA would effectively cease to exist. To do anything else would preserve the current difficulties already articulated and would be sub-optimal.”
The WSSRT stated: “The view of our trustees is that we can best meet our objects and support the railway by remaining as a small independent support charity focused on our current objects around education and heritage (schools’ engagement and museums) and around historic carriage restoration.”