They give vent to allegations of “spin”, “extraordinary” financial protection and budget deficits of more than £1m.
Glasgow Royal Concert Hall, the Old Fruitmarket and the City Halls require about £5.8m of repairs and upgrades.
Glasgow Cultural Enterprises (GCE), which runs the venues, is now subject to a takeover by Culture and Sport Glasgow (CSG) – a council body which runs the city’s museums, galleries, libraries and sports facilities.
Yet around the time that the story of the proposed takeover was first reported in The Herald, Peter Winckles, GCE’s head of finance, wrote a letter expressing his frustration with the way these issues were being “spun” by Glasgow City Council (GCC).
Mr Winckles wrote: “The danger in the way you have spun this story is that our staff, customers and supplies have been made nervous by your portrayal of our finances and we are having to continually reassure them we are in robust financial health … the issues that the working party need to resolve are extremely complex and, whatever the outcome, this process must not turn a successful, confident, artistically-acclaimed business into a failing business simply because there are insufficient GCC funds available to invest in a 20-year-old building.”
He rejects the description of the concert halls, in a GCC press release, as a “wholly owned subsidiary” of the council. He writes: “This is not the case. We are, like Culture and Sport Glasgow, a company limited by guarantee and a registered charity. There are no shares in the company and so we cannot be owned … whilst GCC controls the company by way of its ability to appoint and remove directors … this does not make us a subsidiary.”
He later adds: “I have consistently stated that this organisation is not a failing organisation. The only reason we are facing the situation we have at the moment is because the financial pressures on GCC brought about by the current economic climate … means that GCC cannot commit to the £15m, 15-year life-cycle maintenance programme developed in 2004.”
Papers also show shifting financial projections over the past year, and how the city council stepped in with a crucial “letter of comfort”.
In February, figures showed a predicted budget deficit of £1.3m for 2009/10.
Lynn Brown, executive director of financial services at the council, writes to Mr Winckles and says “a recovery plan is required”.
In March, a letter of comfort from the council enabled GCE to continue trading and ensured “the risk of trading insolvently was removed given the size of the deficit budget the company was forecasting for 2009/10 … this type of letter was extraordinary and not normal practice.”
Since the initial news of the proposed merger, Svend Brown has been appointed as the new artistic director for the venues. A series of working groups have been established to analyse the various iusses. These will include artistic issues which would be addressed in the suggested takeover.
Others include the material demands and the upkeep of the venues. Their future is a vital part of Glasgow’s status as a Unesco-designated City of Music.
At the time of the Herald’s story in July, Glasgow City Council said that the list of repair and refurbishments costs is not necessarily up to date.
An internal council e-mail on April 8 this year says the halls expected to report a deficit of £230,000 and predicted a “hole in the budget” of £400,000. However, a more recent document says the company will show a net profit of £65,000 and reserves of £18,000 this year.
The cash flow is also “healthy” and as of July 7, the company had £1.35m in the bank. However, an “underlying trading deficit” of £100,000 and £400,000 bill for property upkeep means that there is a forecasted deficit of £500,000 for 2009/10.
GLASGOW ROYAL CONCERT HALL: In financial crisis
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