Issue - meetings

Report of the Deputy Chief Executive (Place)

The Cabinet considered a report of the Deputy Chief Executive (Place) that sought the approval of financial support to the Culture Coventry Trust to enable it to establish a robust Medium Term Business Plan.

The UK’s cultural sector had seen a reported reduction in budgets by over £1bn since 2010. This reduction had created significant pressures within the sector, with the reported closure of over 45 museums across this period. Nationally, cultural organisations were actively increasing their commercial activities whilst reviewing and restructuring their medium term financial strategies, in order to meet these ongoing challenges. 

Culture Coventry Trust (The Trust) contacted the Council in November 2016 seeking financial assistance regarding its forecast deficit financial positions for 2016/2017 and 2017/2018 onwards. Financial pressures over the last 2-3 years – including through the period of extension and development of the Coventry Transport Museum and restoration of the Old Grammar School – meant that the Trust was required to utilise its cash reserves and therefore now needed assistance whilst it established and implemented its plans for the future.

The Trust was seeking to establish a robust Medium Term Business Plan, but in order to do that, it currently required financial support from the City Council in the form of cash flow loans and deferral of the repayment of other monies owed.

RESOLVED that the Cabinet:

1.  Approves the deferral of monies owed by the Culture Coventry Trust to the City Council in respect of the Transport Museum extension project, until April 2018.

2.  Endorses the cost reduction measures proposed by the Culture Coventry Trust, subject to on-going monitoring by City Council Officers.

3.  Approves the funding by the City Council of the one off redundancy costs of the Culture Coventry Trust’s management restructure through the provision of additional one-off grant funding.

4.  Approves in principle (subject to scrutiny by Council Officers) the provision of a loan(s) from the City Council to the Culture Coventry Trust to be repaid at a commercial rate for the following:

a.  to enable the Culture Coventry Trust to pay their next three years West Midlands Pension Fund contribution in advance;

b.  for drawdown during 2017/18 financial year to enable the Culture Coventry Trust undertake cost reduction and income generation initiatives to achieve a sustainable financial position.

5.  Subject to approval of recommendation (4) above, approves, as required, the issue of a letter of comfort to the Culture Coventry Trust confirming that the City Council will provide financial assistance during 2017/2018 to enable it to carry out its cost reduction and income generation initiatives to achieve a sustainable financial position.

6.  Delegates authority to the Deputy Chief Executive (Place) and the Council’s Section 151 Officer to undertake the financial due diligence, negotiate and finalise the detailed terms of the loan arrangement and if satisfied as to their terms (and such other matters as deemed relevant) effect the completion of the appropriate loan agreement.