Archived decisions
Hampshire County Council
Executive Member - Recreation and Heritage Item 8
18 July 2002
Recreation and Heritage Capital Programme for the Arts; Winchester Theatre Fund
Report of the Director of Recreation and Heritage
Contact: Michael Fuller Ext: 6016
1. Summary
That the following decision is sought:
That the Winchester Theatre Fund, owner of the Winchester Theatre Royal building, be granted a capital grant of £75,000 as part of a £540,000 funding package with the Arts Council of England and Winchester City Council.
2. Reasons for the Recommendation
This grant will provide the final contribution to the fundraising campaign for the refurbishment of the Theatre Royal and to the latest package initiated by the Arts Council of England.
3. Other options considered and rejected
- making no grant
- making a grant of different value
4. Conflicts of interest declared by the decision maker, or a member or officer consulted
None
5. Dispensation granted by the Standards Committee
Not applicable.
6. Reasons for matter being dealt with, if urgent
Not applicable.
Approved by: (Signature) Date: (of decision)
Councillor J. Waddington
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Hampshire County Council
Executive Member - Recreation and Heritage Item 8
18 July 2002
Recreation and Heritage Capital Programme for Arts; Winchester Theatre Fund
Report of the Director of Recreation and Heritage
Contact: Michael Fuller Ext: 6016
1. Summary
1.1 The Winchester Theatre Fund, owner of the Winchester Theatre Royal building, has made an application to the County Council for further capital funding of £75,000 as part of a partnership approach to raise £540,000 with Winchester City Council, Southern and South East Arts, the Arts Council of England and a public fundraising campaign. This report recommends that this request is supported with a grant subject to certain conditions.
1.2 This report provides a position statement for the Winchester Theatre Fund and makes reference to a recent report into its financial position.
2. Introduction
2.1 The Winchester Theatre Fund owns the Theatre Royal building in Jewry Street, Winchester and has managed the refurbishment and rebuilding programme over the past six years. It is an association which is also a charity and this status makes the individuals on the Management Committee liable for the debts of the Fund. The Winchester Theatre Fund is a separate legal entity from Live Theatre Winchester which manages the staff and runs the programme of the theatre. Hampshire County Council revenue funds Live Theatre Winchester in partnership with Winchester City Council.
2.2 Since the commencement of the current refurbishment the Theatre Fund has raised a total of £3,875,000 from local and national sources. The largest of these is the contribution from the National Lottery through the Arts Council of England at £2,796,000 with other public sources providing grants including £154,000 from Winchester City Council and Hampshire County Council granting a total to date of £169,000. The City Council has also supported the fundraising with short-term interest free loans.
2.3 In late 2001 the Arts Council of England repeated its concern about the long term capacity of the Winchester Theatre Fund to deal with its debts. It raised the possibility of a further grant which would be a second supplementary, a very unusual move by them. It was very concerned with the cash-flow problems of the Fund and its reliance on future rental income from Live Theatre Winchester to eradicate its debts over an eight to ten year period. Hampshire County Council had already expressed its concern about this possibility as it had seen that this future income would be needed to build a capital fund to pay for future capital needs and maintenance.
2.4 Such was the concern of the Arts Council of England that they commissioned a report from Chittenden Horley, an experienced firm of chartered accountants on capital projects, which would assess the true state of the Fund's liabilities and make a realistic assessment of the true fundraising capacity in the near future to complete the fundraising campaign in 2002. The report was provided to the Arts Council in March but has been made available to other funding bodies.
3. Current Position
3.1 The Chittenden Horley report provides a clear and concise statement of the perceived problems of the Fund and its financial position. As expected, the Fund has found it much more difficult to raise funds since the theatre has opened. The major concern of the Arts Council is a hire purchase agreement with GE Capital for the theatre equipment. This requires regular payments to ensure the equipment stays in the theatre. The bill for the main contractor, Mansell, has only be afforded with a loan from the company which is being paid back in instalments.
3.2 The Chittenden Horley report took the view that the future funding of the Fund needs to be assessed over the past five years and the next ten years. In the light of the current debt and the future liabilities of the Fund for the building the Chittenden Horley Report indicates that the funding needs of the Fund are of the order of £540,000 to settle the matter in all respects. This will then establish the Fund as a stable landlord and provide Live Theatre Winchester and all its staff with a more certain future and a theatre which is fully complete. The Chittenden Horley Report provides a thorough analysis of this financial picture. The Fund has also decided to change itself into a charity established as a company limited by guarantee similar to other arts companies in Hampshire.
3.3 The funding package outlined in the Chittenden Horley Report was discussed with the officers of the funding bodies, i.e. the Arts Council of England, Hampshire County Council and Winchester City Council who were able to provide a guide on what level of support was feasible within the financial circumstance of their organisations. No commitments were provided by any party.
3.4 Subsequent to the production of the Chittenden Horley Report, the Winchester Theatre Fund has written to each of the funding bodies requesting a final financial investment to establish the Fund on a proper footing for both the immediate situation and for the next ten years. A formal request has been received by the County Council for a grant of £75,000 similar to that requested by Winchester City Council. The suggested funding package is as described below:
£
Private fundraising by the Fund 100,000
Winchester City Council 75,000
Hampshire County Council 75,000
Arts Council of England 290,000
Total requirement 540,000
4 Financial Implications
4.1 The Capital Programme for Recreation and Heritage Committee holds £24,000 for 2002/03 under the headings of Theatre Improvements and Minor Grants. £24,000 was also earmarked in the 2001/02 Capital Programme. The final element will need to be found from the Arts Department revenue budget where holding staff vacancies will contribute £27,000. Thus the total sum of £75,000 can be made available.
5 Conclusion
5.1 As members might be aware, Hampshire County Council has invested considerable funding into the Theatre Royal Winchester over the last ten years. This now amounts to a total capital spend of £169,000 with a revenue commitment for the operating company of £100,000 per year. A further investment of £75,000 by the County Council appears to represent a sound final investment if it can help to lever in further partnership funding of £465,000. The other funding bodies have said that they will only agree to their share of the funding if each of the partners agree to their full share. Any reduction from any one of them may reduce the others in proportion.
5.2 If the County Council is to decide to provide further support to the Winchester Theatre Fund in conjunction with its partner funding bodies then some conditions will need to be made to go along with the funding. Suggested conditions, which match those agreed by Winchester City Council, are listed below.
a. that the grant is approved subject to the Arts Council of England, Southern and South East Arts and Winchester City Council agreeing their contributions to the funding package.
b. that Winchester Theatre Fund has raised its share of £100,000 additional funding and this is immediately available.
c. that Winchester Theatre Fund has arranged to pay off its outstanding loans and lease agreements.
d. that Winchester Theatre Fund submits proposals to establish itself as a company limited by guarantee and to register as a charity.
6 Recommendation
6.1 That a capital grant of £75,000 be made to Winchester Theatre Fund subject to the conditions of section 5.2 above.
Section 100 D - Local Government Act 1972 - background papers
The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.
N.B. the list excludes:
1. Published works.
2. Documents that disclose exempt or confidential information as defined in the Act.
TITLE LOCATION
none as documents contain confidential information