Agenda item

Report of the Deputy Chief Executive (Place)

The Committee considered a report of the Deputy Chief Executive (Place) which provided information in relation to the finance and governance arrangements for the Culture Coventry Trust which was established in August 2013 following a Cultural Trust Review which recommended a merger of the Coventry Heritage and Arts Trust (CHAT) and the Coventry Transport Museum (CTM).

In April 2014, a £9.5m refurbishment and redevelopment programme commenced at CTM and the Old Grammar School, culminating in the full reopening to the public of the School and comprehensively re-modelled Museum in June 2015.

In February 2015, the Council established in its Medium Term Financial Strategy a further annual saving of £500k (to take effect from Apeil 2017) from Culture Coventry Trust (CCT) grant budget. Since 2016/17, the Trust has been through a very difficult financial period, which as a result has required financial and other support from the City Council and other partners, and has also resulted in a change in the structure of both the Board of Trustees and the Trusts senior management team.

The Trust has established a revised financial and business plan which is resulting in a much improved financial position and financial outlook. However, it remains in a transitional state whilst it implements the plans. Continues to repay monies owed to the City Council and re-establish its reserve balances.

The Committee noted the future governance structure of the organisation is also currently under review to ensure its future fitness for purpose.

The report detailed Council involvement with the Trust in the following areas:-

·  Officer involvement – Council officers have always maintained a “contract monitoring” role to ensure the Trust are delivering against their obligations under the grant agreement. Involvement has been continuous and more significant as both a support and a challenge since the Trust reported formally to the Council in November 2016 that they expected to return a deficit, had no reserves, and were likely to be unable to repay the cash flow debt. This close working relationship to support the Board of Trustees and management team has continued through the management regime changes at the Trust.

·  Council Annual Grant to the Trust – The Council is the main funder to the Trust and provides an annual grant of c£2m, which helps fund their annual planned spend. Recognising the Trusts financial difficulties and also taking into account that they are the custodians of the Council’s cultural assets, the Council acted formally in April 2017 to “buy time” for the Trust to address its finances by approving an unsecured loan to enable them to advance pay their pension liability and for a cash flow facility during 2017/18.

Following a change of management team, a new Business Plan was approved by the Trust Board in 2018 which followed a major review of current costs, staffing structures and ability to generate income. As a result of this medium term outlook, some shorter term benefit was also achieved which allowed the Trust to report a much lower deficit position in 2017/18 than had been feared. This also meant the amount of cash flow loan support required to be drawn down was significantly lower that had been approved by the City Council.

The Committee questioned officers on aspects of the report including:-

·  Challenges for the Trust

·  Mechanisms in place to provide assurance in relation to financial and governance arrangements

·  Key management roles at the Trust

·  City Council resource implications, including salaries

·  Polices and procedures in place to ensure accountability

The Committee requested clarity in relation to the governance timeline and further information in relation to the current governance structure.

RESOLVED that the Audit and Procurement Committee:-

1)  Notes the report, which provides assurances in relation to finance and governance arrangements.

2)  Requests information in relation to the governance timeline and the current governance structure.