Future of the Science Museum Group

Written evidence submitted by Dr Pete Waterman [SMG 010]

This submission only relates to the National Railway Museum ("NRM")

My first direct and relevant knowledge of the incompetent approach adopted by the NRM dates back to circa 1994. The background to this, and other relevant matters, is summarized below.

LMS "SUPER D"

In 1994, I established a Trust named The Waterman Railway Heritage Trust. The purpose of the trust was to protect heritage railways assets for the future education of and enjoyment by, the public.

The NRM owned a LMS Super D locomotive and tender. They estimated that the cost of returning it to full working order was circa £125,000. I, through my trust, agreed to underwrite this cost.

The arrangement was that in consideration for meeting the cost of the work, based on the NRM’s estimate, my trust would operate the asset for a period of 10 years and during that time accumulate a fund (from renting the locomotive to preserved railways) to complete a full overhaul at the end of that period, whereupon it would be returned to the NRM.

NRM management insisted on managing the project. They ran a tender process and selected a now defunct engineering business located in Chatham, Kent to undertake the designated work. Costs soon started to spiral out of control and it was abundantly clear to me that the NRM had conspicuously failed to:

(a) Understand properly the scope of the required work; and/or

(b) Select a service provider capable of undertaking the work.

The demands for more and more money soon tried my patience and eventually I demanded that the locomotive and its tender be delivered to my railway works in Crewe.

By the time that the locomotive was finished, the total cost to my trust was in the region of £700,000. It was obvious that it could never earn that sum over a 10-year period. As such, on numerous occasions over the intervening period I have sought to engage in a dialogue with senior NRM management to resolve the situation, but have been frustrated at every turn. It is an institution characterized by people burying their heads in the sand.

LNER A3 – "FLYING SCOTSMAN"

I previously owned this locomotive in partnership with Sir William McAlpine and, therefore, have a direct personal knowledge of the challenges it presents. We sold it to Mr. Tony Marchington for £1.2m (in a transaction that also included, from memory, a few coaches). In 2004, the NRM acquired the locomotive from Mr. Marchington (in fact, I think it was actually purchased from Barclays Bank plc, which sold it as mortgagee in possession).

It is a matter of public record, as evidenced in the First Class Partnerships report (redacted version dated 7 March 2013) that a schedule of works that was initially commenced in December 2005 and estimated to cost £1m is, over 7 years later, still incomplete and expenditure has exceeded £2.7m.

The parallels between the gross mismanagement of this project and my direct experience with the Super D (as set-out above) are alarming. It is a plain and simple truth that as an institution that relies extensively on the public purse, the NRM lacks commercial acumen in the letting and management of contracts.

In 2011, as a committed and passionate supporter of heritage railways, I came to the conclusion that the NRM’s incompetence in the management of the Scotsman project was damning the whole industry. In that light, I made an offer to the NRM to complete the overhaul of the Scotsman to mainline standard, whatever it took, on the basis that I could run it for 10-years and at the end of that time, return it to the NRM "fully ticketed" and ready to run for the next 10 years. My offer was rejected out of hand.

Instead, management of the NRM continued to spend taxpayers’ money in their shambolic and increasingly desperate attempt to salvage something from this debacle.

When the NRM put the remaining work out to tender earlier this year, I declined to be involved as I knew that the process would only lead to further problems due to their inability to manage large and complex projects of this type. My railway engineering business in Crewe has undertaken numerous projects of this scale over the years; some even more complex. We would have been ideally suited to delivering the Scotsman within budget and on time, but the old adage of "once bitten, twice shy" is ignored at ones’ peril.

It is my fervent belief that the NRM should restrict itself in its engineering unit only to basic maintenance of its static exhibits. Instead, through procuring various grants and other government incentives it has sought to build a unit that in effective seeks to compete with the best that the "market" has to offer. This is a nonsense and, I believe, cannot be sustained on any logical grounds.

What the NRM should focus on is its core remit. In pursuit of that, it should beef-up its project management and procurement capabilities and fund the cost explicit and implicit in this suggestion by cost savings in its engineering unit, as advocated above. In fact, truth be known, the actual cost savings will be significantly higher as such action should bring to and end the financial drain it has suffered from poor management of this activity over the years. Quite apart from that, it will restore its reputation as a national archive and source of education and entertainment for the public in these noble and timeless assets.

SUMMARY

In saying the above, I want to place on the record that there is much that the NRM does that is worthy and worth protecting. It would be shameful if the museum was forced into closure as it offers so much at a time when we need to re-balance our economy and inspire the next generation of engineers.

June 2013