Agenda item

Report of the Deputy Chief Executive (Place)

The Cabinet Member considered a report Deputy Chief Executive (Place) which provided information on the Culture Coventry Trust’s financial performance and support arrangements.

A corresponding private report detailing confidential aspects of Culture Coventry Trust’s financial performance and support arrangements was also submitted to the meeting for consideration (Minute 67 below refers).

The UK’s cultural sector had seen a reported reduction in budgets of 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 2016/17 and 2017/18 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 to remain solvent.  In April 2017, Cabinet approved a short term financial support package whilst it established a robust Medium Term Business Plan and implemented its plans for the future.

The Trust had since been through a change in management, and currently have an interim arrangement in place. The current team had reviewed and revised many aspects of the previous business plan and had recently commenced a full restructure and re-focus of the management and staffing. This had also resulted in the resubmission of external funding bids, and a much revised short to medium term financial plan. This financial plan, together with the ongoing transformation and culture change required, significantly improved the outlook for the trust and has demonstrated its status as a going concern. However, further work was required to consolidate this position, and move it forward further to enable it to demonstrate its self- sufficiency to its funders with a balanced medium term position, including the ability to redeem historic debt.

As a result, the Trust had sought one off approval in 17/18 for a grant of up to £370k to enable it to implement their management and staff restructure. Additionally, they sought approval to allow them to repay cash flow monies owed to the Council flexibly over a period of time, reflecting their in year surplus’s.

RESOLVED that the Cabinet Member for Strategic Finance and Resources:

(1)  Approves a one off advance of up to £370k by way of grant funding to Culture Coventry Trust to finance their restructure implementation costs, to be funded from the Councils earmarked reserve for ER/VR’s

(2)  Within the funding limits contained in recommendation (1) delegates authority to the Director of Finance and Corporate Services, in consultation with the Cabinet Member for Strategic Finance and Resources, to agree the final amount of the advance and also the entering into the necessary legal agreements between the Council and the Culture Coventry Trust

(3)  Approves a variation to the existing loan documents for cash flow monies owed by the Trust, to permit a flexible repayment profile and to delegate to the Director of Finance & Corporate Services the authority to finalise the terms of the repayments annually