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Horse trams on the wrong track

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I didn't hear what he said.  The quote is from the linked paper article. 

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Mr Harmer is another Minister who tells us that our opinions are misconceptions but is utterly unable to give a convincing explanation of why. Apparently we just don't understand that running loss-making "services" is actually beneficial. Now, I could understand that running the trams at whatever their annual loss is, actually brings more money into the economy by attracting x number of tourists, spending x amount of money IF these facts were made available. But I suspect that there is actually no survey of visitors that identifies the main reason, or at least a significant reason for their stay is heritage transport and no data to demonstrate the "attraction" of heritage transport actually exists. As such, no data will exist to support the contention that the loss is balanced by additional visitor spend. Nevertheless, we are expected to believe that maintaining taxpayer support of these losses is worth it.  I suppose that Mr Harmer is right in one regard; why are we making a fuss about a £700 loss over 2 weeks? This is utterly insignificant in comparison to the ongoing waste across Government during these 2 weeks and the remaining 50, each year.

Edited by joebean

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21 minutes ago, Dave Hedgehog said:

Of course they had no “extra” costs as it was specified and costed into the contract. Duuh! Talk about spin!

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They must be "making a loss" during the whole promenade works though.

They're not running to make any revenue. But the horsetram staff are presumably still employed (somewhere)? The horses still need to be fed and cared for. All that is outgoing expense without any income.

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2 hours ago, Dave Hedgehog said:

Probably the reason it is costing so feckin much is that they have budgeted for laying/digging up/re-laying the road surface. Idiots the lot of them

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17 hours ago, Albert Tatlock said:

Have you ever read such bollox?

https://www.manxradio.com/news/isle-of-man-news/all-heritage-railways-make-a-loss-says-doi-minister/

More like a loss of £500k AND £700.

The only 'misconception' here was Harmer's about 50 years ago .

He is right in a way. I think the idea that everything is run at a "loss" or a "profit" is a problem. We don't talk about schools and hospitals running at a "loss".

Some things are run at "cost" because we believe that they are worthwhile. My last holiday (flight, hotel, concert tickets etc.) cost about a grand, but I did win $50 for a short story I wrote on the plane - so that's a loss of over £950, right? But I don't look at it that way because going on holiday is a positive thing for me to do.

What I need to think of is did I get value for money, could I reduce costs (cheaper hotel, visit UK rather abroad) and still enjoy myself, could I have monetised the story better or written more whilst on holiday? Would it be good for me not to have a holiday and avoid all the costs. 

So, yeah, obviously all heritage railways cost money to run, otherwise they wouldn't be heritage! That's why most are run by volunteers. But the question that need asking are really - 

Is it worthwhile having these railways?

Then you look at issues of how much it costs to run the railways and how much revenue they can generate. Then ask ...

Is it still worthwhile having these railways?

Then if the answer is NO because the government have more worthwhile projects to spend their money on see if there is someone (a volunteer group, charity) for whom the answer is YES. 

 

Edited by Declan
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Are the horsetrams worth a loss of @ £400k a year?

Do we have any data to indicate their part in the "pull" of tourists to the IoM (no pun intended :lol: )?

Without that data it's impossible to say, but that data doesn't seem to be available, collated or exist. But given the size of the annual losses not many tourists appear to be using them. In which case they are an expensive spectator attraction.

It would be very easy to say therefore, "No, they're not worth the losses". Because no evidence is forthcoming to support any sort of a case for their continuing.

Other than massive expenditure on a DOI project.

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1 hour ago, Non-Believer said:

Are the horsetrams worth a loss of @ £400k a year?

Do we have any data to indicate their part in the "pull" of tourists to the IoM (no pun intended :lol: )?

Without that data it's impossible to say, but that data doesn't seem to be available, collated or exist. But given the size of the annual losses not many tourists appear to be using them. In which case they are an expensive spectator attraction.

It just doesn't make sense to look at the horse trams in isolation - they form part of a wider heritage transport network, which in turn forms part of the whole Isle of Man as a tourist destination offering.

Wouldn't it be better to take a top down approach and look at overall government accounts. What % of our total tax income are we as a community prepared to spend on attractions which support making the Isle of Man a tourist destination. This maximum % should then be allocated across all heritage/tourism assets - 10%? 

To go into the minutiae of the profit/loss of individual "tourist" assets is missing the broader picture.

Do the entry fees for Castle Rushen cover the staffing/upkeep/maintenance of the Castle? - sure as hell not
Do the fares for the heritage railways (incl. horsetram) cover their costs - sure as hell not
Do the entry fees for the House of Mannanan cover the running costs - sure as hell not
Who picks up the tab for running the Manx Museum?

All tourist assets will have cost. So my back of a fag packet calculations based on  blue book 17/18 -  £233m was collected in Income Tax (not NI, not VAT or any other Govt income) by IOMG.

£4.4m of net spending was made on Manx Museum and National Trust (MNH)
£4.9m of net spending on Motorsport (within DfE accounts)
£0.5m of net spending on Villa/Gaiety (within DfE)
£1.3m of net spend on Tourist development/tourist events (within DfE)
£0.4m of net spend on Wildlife Park (within DEFA)
£17.1m of net spend on Transport Services (within DOI) - but this must include the buses & horse trams - it is not broken down further, but that must be most ££ due to number of bus staff.
(£10.0) buses net spend cost guess. 

total £18.6m = approx. 8% of Income Tax receipts spent on tourist economy. - is that  reasonable?

Clearly, I've not considered the relatively high capital costs in maintaining the railways, but all other tourist attractions must also incur capital expense.

 

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1 hour ago, b4mbi said:

It just doesn't make sense to look at the horse trams in isolation - they form part of a wider heritage transport network, which in turn forms part of the whole Isle of Man as a tourist destination offering.

Wouldn't it be better to take a top down approach and look at overall government accounts. What % of our total tax income are we as a community prepared to spend on attractions which support making the Isle of Man a tourist destination. This maximum % should then be allocated across all heritage/tourism assets - 10%? 

To go into the minutiae of the profit/loss of individual "tourist" assets is missing the broader picture.

Do the entry fees for Castle Rushen cover the staffing/upkeep/maintenance of the Castle? - sure as hell not
Do the fares for the heritage railways (incl. horsetram) cover their costs - sure as hell not
Do the entry fees for the House of Mannanan cover the running costs - sure as hell not
Who picks up the tab for running the Manx Museum?

All tourist assets will have cost. So my back of a fag packet calculations based on  blue book 17/18 -  £233m was collected in Income Tax (not NI, not VAT or any other Govt income) by IOMG.

£4.4m of net spending was made on Manx Museum and National Trust (MNH)
£4.9m of net spending on Motorsport (within DfE accounts)
£0.5m of net spending on Villa/Gaiety (within DfE)
£1.3m of net spend on Tourist development/tourist events (within DfE)
£0.4m of net spend on Wildlife Park (within DEFA)
£17.1m of net spend on Transport Services (within DOI) - but this must include the buses & horse trams - it is not broken down further, but that must be most ££ due to number of bus staff.
(£10.0) buses net spend cost guess. 

total £18.6m = approx. 8% of Income Tax receipts spent on tourist economy. - is that  reasonable?

Clearly, I've not considered the relatively high capital costs in maintaining the railways, but all other tourist attractions must also incur capital expense.

 

But that's what I meant. Even in your post there's assumptions, ifs and buts as regards the costs of these things. But even if we agree that not all these attractions can make money or even break even, the facts are that the horsetrams lose £400k+ pa. Which is a rising figure over the past 5 or so years. Plus their share of the now ongoing redevelopment costs of the promenade and the new stables etc.

I think it's too much and can't be justified without some sort of figures to indicate what their share of tourist  attraction actually is. And personally, I don't think it's much or they'd be much better patronised by our tourists and thus returning better revenue.

It's not reasonable to keep throwing large amounts of money at them simply because they supposedly make some unquantified, nebulous contribution to our "tourist economy", such as it is. A bit like fairy houses, surprise, surprise.

There needs to be a better, properly costed business case. God knows, we employ enough statisticians to produce figures to justify everything else. But the chances of getting anything like that out of DfE or DOI are about as likely as finding life on the Moon.

Edited by Non-Believer
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@b4mbi  There's a breakdown of income and costs by railway shown in questions from Rob Callister in an April Keys:

http://www.tynwald.org.im/business/hansard/20002020/k190416.pdf#page=31

How reliable they are is another matter.  Apparently they received £ 57,915 in income from the Horse Trams in the first year (2015-16) for no costs at all!  After that the DoI effect clicked in and over the last three years income dropped by 9% while costs rose by 78%.

The income from all-in tickets is shown separately as "Rail - Off train" which is not only confusingly titled but it the sort of thing which most companies would make an effort to split - if only the reflect comparative usage.

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The railways have made a creditable improvement in revenue in recent years. They cover far more of their costs now than, say, 10 years ago.

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17 minutes ago, woolley said:

The railways have made a creditable improvement in revenue in recent years. They cover far more of their costs now than, say, 10 years ago.

One would hope so too, given the expenditure that's been lavished on them?

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Interesting.

The net spend on "transport services" in DoI section of the audited accounts 17/18 is £17.1m

Per that tynwald written answer link @Roger Mexico gave, the net spend is just shy of £10m for bus and rail.

(Net spend for rail only to plug into my figures was more around £4.5m)

Ah. Bet the airport counts as "transport services"  who would be surprised if that was a net spend of £7m......

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