This has been another very busy year for our Railway.
The headline is that thanks to a lot of hard work by many people we are still very much in business. And that couldn’t have been guaranteed.
We are in business despite unprecedented external challenges.
Covid was simple compared to what is happening now. During Covid we knew where we stood – we couldn’t run trains and there was Government and other support available. Now there is no certainty, and we are on our own.
I’m going to give you an overview from my perspective. And I’m not going to sugar the pill.
The economic situation is grim, and it will almost certainly get worse. This has had, and will continue to have, adverse effects on both our income and our expenditure.
In short, we will have to spend a lot more money to run our trains and keep up with maintenance and overhauls. At the same time our customers will have less disposable income to spend with us.
We are not alone in this in the heritage world, and we ignore the implications at our peril.
To take but one example on the income side, our August visitor figures this year were 24% down on the pre-Covid base year of 2019, and we will have to base the 2023 budget on a passenger figure well below what we are used to.
And we are finding it much more expensive to buy what we need to keep running. The cost of everything, from coal to cooking oil to insurance, seems to be rising exponentially.
Not only do things cost more; they are also more difficult to obtain when we need them. In common with other UK businesses, we are suffering from problems in the supply chain.
We have other challenges too. Our assets, moving and fixed, are increasingly life-expired. There is a backlog of overhaul and maintenance stretching over many years. No-one’s fault; it’s how it is. But the current economic situation makes it even more difficult to tackle.
The weather has been extraordinary, to the extent that during August this year we were unable to run steam trains, necessitating the hiring-in of a mainline diesel locomotive. This may be a portent of things to come.
I could go on.
So, you will rightly ask, what are we doing?
First, we have a new General Manager. Shaun Dewey was a loyal servant of the Railway, and he retired earlier in the year. We owe him our thanks for his seven years with us.
In his place we have welcomed Robin Coombes. He has been spending his early weeks establishing a profile, settling in, and deepening his understanding of the changes we need to make and how to go about them. He is certainly going to have his work cut out in leading our response to the challenges that confront us.
What is that response going to look like?
We’ve seen some of it already this year, and we will have to go further and deeper. There will be fewer operating days and fewer and shorter trains. We simply cannot afford to carry fresh air around the Kent and Sussex countryside. In common with all heritage railways, we must increase our load factors.
Paring back the timetable means that we will need fewer operational engines and coaches. Again, a saving in costs, and perhaps in facilities too.
We will need to develop targeted products to bring people in and get them to spend more money.
We will need to get cleverer at marketing and awareness-raising. But we must remember that all the marketing in the world will be of no use if the market isn’t there, or if we can’t do what our paying customers want.
We will need to do more in partnership with others. This has already started, but we can go further. Why, for example, can’t we share ideas and facilities with other heritage railways, locally and further afield?
We will need to focus our big-ticket expenditure on what is necessary to run a reduced service and to keep our infrastructure safe.
We will need a steady stream of new volunteers. Under Sarah Tagart’s leadership we have probably the best volunteer recruiting structure in the country – she has won a national award for it.
We will emphasise the fact that as well as being a business we are a charity that needs to raise funds to preserve its historic assets. And we must raise still more money in addition to what we get in the farebox.
We must continue to recognise that sustainability is more than just having enough money. We must continue to work on the social and community benefits the Railway can bring.
We need to build on the work already started to get better at the ways in which we cherish our environment.
We will need to get used to the fact that the heritage railways that survive will have turned themselves into visitor attractions selling experiences that people want to buy. The days of simply running heritage trains from A to B are numbered.
And throughout 2023 we shall need to be agile, responding to circumstances – and not doing, and spending money on, things because that’s what we have done in the past.
Can we do it? I believe that we can. We made a good start in 2022 – not perfect but we learned lessons along the way. We also demonstrated what we can do if we all pull together.
One example I have in mind – it seems a long time ago now – was the ground-breaking display of Poplar at the Docklands Light Railway depot of the same name.
Not everything will go right, in the same way that not everything went right in 2022.
There are two important considerations.
First, we must be together, One Railway. This is not a time for personal agendas, or for seeking to promote one project over another. All bets are off.
In an ideal world we would be able to do everything that everyone, with the best of intentions, wanted. But the heritage railway world isn’t ideal, and we and everyone else have taken huge hits in the past couple of years. Sadly, we have to be hard-headed, realistic and business-like.
And secondly, our human capital. On the one hand it is exceptional and is what keeps us going. But on the other hand, it is limited. The reality is that to lay on an event, or develop any kind of new initiative, we need people who are prepared to step up to the plate in the common interest, and, crucially, to share in the responsibility.
Many of course already do this, and we could not manage without them. But we must prevent individuals from burning out and jeopardising their wellbeing. The risk is a real one. We always need more volunteers, not only in the obvious front-line roles but in the backroom too.
Don’t criticise, help.
Finally, the trustees. The trustees have been busy, individually and as a Board. Together with the new General Manager we have been reviewing our risks and how to manage them, as well as looking at what hasn’t gone as well as it might have done and how to ensure we don’t make the same mistakes again.
As I’ve said, there are a number of things that haven’t gone as smoothly or as quickly as we would have wished. We know this, and you as members will know too.
But all too often the root cause has been the sheer lack of bandwidth across the Railway. There are times where we know what we need to do, but just can’t find the capacity to do it.
Collectively, at all levels, we are close to, or at, the limit of what can be managed effectively. Perhaps it is time we all recognised the fact.
So, there you have my honest and realistic view of where we currently stand.
Will we be successful for the rest of 2022, in 2023, and going forward? Yes, but only if we keep focused on increasing revenue and getting value for every pound that we spend, if we are prepared to take difficult and perhaps unpopular decisions, and if Our Railway continues to develop as an organisation.
Thank you.
Simon Marsh
Chairman
