As planned, the WSR plc Board has been giving further detailed consideration to draft proposals to establish a new charity-led organisation to run the WSR in future. These proposals were developed following the initial report by John Bailey in May 2020.
An earlier informal seminar was followed up on Tuesday 30th March by a further full plc Board discussion ratifying the earlier decisions. The Board were supported in these discussions by the WSR plc President, David Morgan.
Besides being a former Chairman of the West Somerset Railway plc, David has very considerable experience advising heritage railways on their structures as part of his work as a former Chairman of the Heritage Railway Association (HRA). A lawyer by profession, David has also worked professionally on company structures over the years.
Whilst acknowledging the considerable work that has so far been put into this proposal, the plc Board have concluded that it is not appropriate to continue with this far-reaching proposal at the present time. This is for a number of reasons:
- The entire railway community is currently heavily committed to re-starting our operations in May. This involves extensive work by many individuals across the railway: this is not going to be a normal start-up operation and requires considerable extra work beyond that normally undertaken for the seasonal re-openings of the past. It is the view of the Board that attempting to take forward work now to establish a brand-new organisation is not something that would be sensible at this time, especially in light of the challenges facing both the WSR plc and the wider WSR railway family over the next 12 months.
- Although much sound progress has been made with our earlier financial recovery plans from 2017-2019, the railway has not yet fully recovered from the financial operational challenges of these years before the Covid pandemic. This is going to require significant further re-targeting of our activities. Attempting to re-position the WSR plc now as a subsidiary organisation of a brand-new charity, complete with all the attendant financial risk around assets, accountability and financial responsibilities, is NOT something that the WSR plc Board feels it can support.
- The plc Board is also not convinced that the proposals being put forward to implement the suggested Bailey reforms will necessarily deliver the anticipated full range of benefits required to justify the scale and scope of organisational change at this time. It feels that the current restructuring proposals are just one of a series of possible options to be considered, and which need to be much more carefully explored.
- In the outline questionnaire that was circulated to all 8,311 WSR plc shareholders seeking their views on the Bailey reforms. Only 391 shareholders responded representing just 8,311 (4.7%). It is evident from such a level of response, therefore, that there is scant shareholder support for these suggestions. The board felt that it was important to have the views of shareholders on this matter, and in the interests of the PLC and its shareholders, it considered that the response rate was too low to justify taking further action on the proposals at the present time.
- The indicative costs of implementation of the current Bailey reform proposals are felt to be considerable and likely to run to at least six figures. In the current financial climate, the Board does not feel that this would be a sensible use of the plc’s limited resources. If loan-funding for this cost were to be sought externally, the Board feels that there would need to be a far more persuasive case.
- One of the key requirements facing us will be the need to convince the Office of Rail and Road (ORR) as regulator, and other key stakeholders, that these proposals will not only fully deliver significant additional benefits over a long period of time, but also that they will not impede the corporate responsibilities of the PLC for the safe and effective operation of the WSR and the stewardship of its assets. The Board considers that such a case has not been made convincingly.
- The Board readily recognises that one motivation for the Bailey proposals was the belief that this would offer us a better opportunity for external fund-raising. The Board have considered and researched the experiences of other heritage railways, and other similar organisations, and has concluded that the present structures in place do not preclude effective fund-raising. There will need to be renewed fund raising efforts in the next few months, of course, and the Board looks forward to working with all of its partners to achieve significant results.
David Morgan (PLC President) comments: “The WSR plc Board considered these matters very carefully when we met and, given the present circumstances, I consider that this was the right decision to make.
“It is crucial for the successful development of the railway that the Board, together with all the WSR partners, now devote their full energy to ensuring the successful commercial re-development of the railway itself post Covid lockdown.
“At this point, a reorganisation would only serve to divert energy away from our main purpose of getting the railway running again, and, if there is to be a reorganisation, a great deal more work – and expenditure - would be necessary to establish the benefits of any proposed change.”
WSR plc Chairman Jonathan Jones-Pratt comments:
“The plc Board have spent some time considering the Bailey proposals and we are very grateful to all those who have brought them forward. We are also very grateful for the sage counsel from our very experienced President, David Morgan.
“The plc Board took into account the low level of response from shareholders, and so we agreed unanimously that this was not the time to take the investigations further.
“We realise and recognise that some of those who have worked on this initial feasibility investigation will be disappointed by our decision, but we believe that this is the time that all the members of the railway family really need to work together and focus on getting our wonderful railway back in action first and foremost.
“It is going to be challenging for us to succeed in a difficult marketplace over the next year or so, and this is where the Board, staff and volunteers need to put their effort.
“This is exactly what I and the plc Board will be doing and – subject, as ever, to government guidelines – we look forward to seeing our trains running again soon.
“There will be a difficult journey ahead for us, but I am certain that when we pull together, we will succeed. We have come through challenging times in the past and we can again! I look forward to seeing you on the railway in the next few months.”