The Severn Valley Railway have warned that a viable future for the railway is at risk without an urgent injection of cash and are appealing to supporters for help.
The railway has launched a £1.5 million Survival Fund appeal to enable it to overcome the current financial crisis and to implement longer-term plans for its future.
Writing to more than 25,000 shareholders, members and donors, the SVR has explained the profound impact on the railway of changes in the financial climate over the past three years, including the pandemic, the war in Ukraine, post-Brexit supply chain issues and the cost-of-living crisis.
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“We’re facing the double whammy of escalating costs and lower revenue,” said Chris Walton, who recently took on the role of interim chairman of SVR (Holdings) Plc, the railway’s operating company. “Costs across the railway have spiralled, including utilities, coal, diesel, steel, copper, catering supplies and interest rates. For example, in the past 12 months alone, our electricity bill has more than doubled, and this year it will not be far short of £500,000. All of these factors are outside our control.
“Put this against the fact that passenger numbers were down last year by about a third, compared to pre-Covid. That equated to around £1.5 million in lost revenue, which has left us badly weakened.
The SVR has already put many cost-saving measures in place, including recruitment freezes for non-essential roles as well as voluntary and compulsory redundancies. For the first months of this season, it is running services on fewer days per week than last year in order to cut back on operating costs. This will be reviewed in May.
Interim managing director Jonathan ‘Gus’ Dunster said: “Our programme of events and services this year is as vibrant as ever. It is crucially important to us to continue to attract visitors, as this will play a huge part in getting us through the challenges we face. We’re confident we can deliver on and surpass visitor expectations.
“However, operating a heritage railway is a cyclical business. For several months at the beginning of each year, there’s very little income, because we’re not open to the public. Pre-Covid, we got ourselves through this lean time by having a cash reserve in the bank. But that option has been taken away by the combined financial challenges of the past three years.
“Unless we address this situation urgently, we won’t be able to lift the railway out of the financial difficulties it’s now facing. The Survival Fund will help us through the coming, very difficult year, in order to start 2024 with a sufficient ‘reserve’. Then we’ll stand a real chance of getting the railway properly back on its feet, so it can thrive and be fit for the future.”
The Survival Fund appeal has been launched jointly by the three companies that form the Severn Valley Railway – SVR (Holdings) Plc, the SVR Company Ltd and the SVR Charitable Trust.
The letter sent to supporters also explains how the boards of all three companies are committed to finding a better way to manage their collective assets, finances and resources in the future. They want to achieve a structure with charitable status at its heart, in order to unlock new income streams, such as Gift Aid on tickets and grant funding, along with other financial benefits such as zero business rates and decreased administration costs. The SVR has applied to the National Lottery Heritage Fund for a grant to enable the restructuring work to take place.
“We place huge value on the support the SVR has received over the years,” added SVR interim chairman Chris Walton. “This has helped it to grow from its humble beginnings in the 1960s into one of the UK’s leading, award-winning and much-loved heritage railways. It’s meant the preservation of our buildings, infrastructure, locomotives, rolling stock and artefacts for future generations to enjoy, and it brings pleasure to many thousands of people each year, generating tremendous economic benefit for the surrounding communities. We would not be making this appeal if it wasn’t completely necessary for the survival of the Railway, and we hope our supporters will understand the difficulties we face, and give us their backing.”
Donations to the SVR’s Survival Fund appeal can be made at svr.co.uk.