City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

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City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

Postby dutchman » Wed Sep 28, 2022 3:32 pm

The City of Culture trust is facing cashflow problems in paying for its 'legacy projects'

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Coventry council is set to loan £1 million of public money to the trust behind the city of culture bid so "vital" legacy projects can still go ahead. Coventry City of Culture Trust (CCCT) has asked the authority for the money saying it is facing some short-term cashflow issues.

Coventry's time as city of culture ended in May, but the trust announced in April that it would invest over £5 million on creative and cultural programmes in the city until March 2024 . However a recent monitoring report showed the charity has a "worse than previously anticipated financial position" and has had to review its budget.

Council officers are recommending that the council lends the money so that legacy projects aren't cut short and to avoid damage to the Trust's reputation.The loan would be made on a commercial basis - meaning it would be repaid in full and with interest. But the move is "not without financial risk", Finance Manager Phil Helm said in a council report published yesterday.

The Trust has only secured 54% of its expected income for the legacy phase, with the rest coming via future grants and ticket sales. And it can't offer the council any security to offset the risk.

Cllr Richard Brown, the council's Cabinet Member for Strategic Finance and Resources, is set to make the decision next week. He said the support is "essential" for the City of Culture legacy and highlighted the investment the programme brought to Coventry.

"Coventry’s year as UK City of Culture was impacted by the COVID pandemic. It makes sense to provide a loan to help the Trust through this period," he said. "This will help the Trust complete its programme, meet its performance targets and avoid any financial penalties."

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Re: City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

Postby rebbonk » Wed Sep 28, 2022 8:18 pm

:rolling:

Send them packing! I said all along that this was nothing more than vanity by our imbecilic council and regardless of covid, or anything else, it was going to cost the taxpayer money. The only way I would support the council in this is if they extract personal guarantees from the parties concerned. - And that ain't gonna happen!

Yet again, the local tax payer is shafted by incompetence in our local offices. :fuming: :fuming: :fuming:
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Re: City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

Postby dutchman » Tue Oct 04, 2022 3:55 pm

Coventry council agrees £1m loan to support City of Culture legacy projects despite skepticism

A loan of up to £1m from Coventry council to the charity that runs the City of Culture scheme has been approved, despite misgivings from some councillors.

Cllr Richard Brown, cabinet member for strategic finance and resources, agreed to lend the money as recommended by officers at a public meeting today (4 October). The loan will help the Coventry City of Culture Trust with short-term cashflow problems that chief executive Martin Sutherland says put its legacy projects at risk.

The money will come from the council's treasury management budget, so will not be borrowed or come from reserves, Cllr Brown confirmed. But opposition councillor Tim Sawdon told the meeting the Coventry Conservatives group "were not exactly enthralled" by news of the loan.

He later told the Local Democracy Reporting Service (LDRS): "I don't think we have enough information to be able to support it. It's not that we don't want to, but I don't think we have seen enough facts and figures."

After the meeting, Mr Sutherland told the LDRS that cashflow problems are a "timing issue" as expected income from tax relief on VAT and grant money hasn't come in yet. Asked why they didn't seek help from elsewhere, he said the trust is a short-term project with only a couple of years left to run so doesn't have assets to borrow against.

If the charity had gone to a commercial lender they would have likely needed a guarantor - which would have been the council. So "risk doesn't really change."

Mr Sutherland also defended the level of information given, stating that Coventry City Council has "complete access to all our accounts, [there's a] great level of transparency.

"The extent this is shared to others is in the control of the city council."

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Re: City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

Postby rebbonk » Tue Oct 04, 2022 6:59 pm

The term I would use here is 'ar$eholes'!

The council are taking a 'flyer' with our money. If those involved think this is such a sure thing, why haven't they had the courage of their convictions and offered personal guarantees? - Rhetorical question, no answer required! :fuming: :fuming: :fuming:
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Re: City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

Postby dutchman » Fri Feb 03, 2023 4:58 am

Coventry City of Culture in discussions with administrators over 'ongoing' debt trouble

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Coventry UK City of Culture is in financial trouble and has been in discussion with administrators. It has been confirmed that 'ongoing' cash flow issues have left the trust, set up to continue the legacy of Coventry's City of Culture year, considering its future.

Only in October, Coventry City Council approved a loan of up to £1m to help the trust to help with its financial difficulties. But now, four months on, it appears that this was not enough. The trust's cash flow problems have deepened and it has been in discussions with administrators as part of 'options' being looked at over its future.

In a statement issued this morning, a spokesperson for the Coventry City of Culture Trust said: “The Coventry City of Culture Trust remains in a difficult financial position with ongoing cashflow issues. We continue to proactively work with our partners, stakeholders, funders and creditors to find solutions to these challenges and thank them for their support during this period.

"The trust is seeking accountancy, contingency, and insolvency advice as is appropriate, to consider options." While the trust's long-term projects could be at risk, the statement says that an event is continuing to go-ahead this month, as well as the 'Life and Work of Frida Kahlo' exhibition at The Reel Store, the UK’s first permanent digital arts gallery, which is hosted at the Telegraph Hotel in Upper Well Street in the city centre.

“The trust’s work continues, with our first legacy commission Cosy Creative continuing this February, as well captivating visitors in the multi-award-winning Life and Work of Frida Kahlo at The Reel Store," the statement concluded.

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Re: City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

Postby rebbonk » Fri Feb 03, 2023 2:10 pm

Anyone with half a brain could see this happening. Sadly, it appears that our excremental councillors lack that quota of grey matter. Heads should roll over this, resignations abound. - Of course, it won't happen. :fuming: :fuming: :fuming:
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Re: City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

Postby dutchman » Wed Feb 08, 2023 4:08 am

Council defends Coventry's City of Culture legacy

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Coventry's UK City of Culture legacy has been defended by the council after the group overseeing the projects said it faced financial crisis.

The trust responsible for delivering them after Coventry's tenure as City of Culture has spoken with administrators.

David Welsh, the councillor responsible for arts and culture, accepted it may not be able to deliver its legacy arts and culture programme.

But he said the "overall benefits of the year far outweigh any downside".

In 2022, the council helped the City of Culture Trust with a £1m loan and the trust's chief executive, Martin Sutherland, said at the time he was confident it would be paid back.

But councillors were briefed on Monday evening to say that the loan is now unlikely to be repaid.

Trust accounts recorded for the end of the financial year in March 2022 showed a funding shortfall of about £1.5m, with £20.6m of expenditure and £19.1m of income.

The trust's total wage bill added up to just under £3.8m, having increased by £1.2m from the previous financial year.

On Tuesday, Mr Sutherland received an OBE at Windsor Castle for his work throughout Coventry UK City of Culture, along with the trust's former creative director, Chenine Bhathena, and the former director of audience strategy, Laura McMillan, who became MBEs.

Mr Sutherland is expected to leave his role as chief executive this month and was not available for comment.

:bbc_news:
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Re: City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

Postby dutchman » Wed Feb 08, 2023 4:11 am

Analysis by Simon Gilbert, BBC CWR political reporter

After all the build-up and excitement, Coventry's time as UK City of Culture seems set to fizzle out rather than end with a bang.

The news that the Coventry City of Culture Trust is on the brink of financial collapse has sent shockwaves around the city.

In the past few days it has been all but confirmed the trust will be unlikely to deliver a promised three-year legacy programme.

Today, senior figures (including the trust's top boss) have collected honours for their work with the trust. While these awards were originally announced in June, the optics and timing are unfortunate.

Arts organisations which have spoken to BBC CWR have described their frustration, bemoaning a missed opportunity.

Some local politicians are furious, questioning the use of public money in a failed bailout of the trust. Others argue benefits to the city from the trust's work outweigh any losses no matter what happens now.

The death of the city of culture trust might not be confirmed yet, but the post mortem is already under way.

:bbc_news:
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Re: City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

Postby rebbonk » Wed Feb 08, 2023 1:34 pm

It was nothing more than a vanity project, stroking a few 'precious' egos. :fuming: :fuming: :fuming:
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Re: City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'

Postby dutchman » Thu Feb 16, 2023 3:52 pm

City of Culture Trust facing financial trouble as urgent meeting called

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Coventry councillors will ask for an urgent meeting to discuss the City of Culture Trust after news that it faces financial difficulty.

Members of Coventry City Council’s Finance Scrutiny Board backed calls for the meeting when it was raised by a councillor at a committee yesterday (15 February.)

News of the organisation's financial woes emerged in a report by BBC CWR earlier this month.

The BBC said the Trust had recently held talks with administrators and a spokesperson for the group confirmed it is in a "difficult financial position."

Cllr Ed Ruane [pictured] raised the Trust as an urgent matter of business outside the agenda for that afternoon's Finance and Corporate Services Scrutiny Board.

He asked for an emergency meeting of the board on the topic and called on the Trust's Chief Executive and finance manager to attend.

"I've already learned, and I shouldn't in honesty, I shouldn't find out through the media that the City of Culture which we proudly financed is in financial trouble," he told the meeting.

"At the moment it's a going concern. And I don't think we're going to be able to deliver the three-year legacy in terms of what it was set out to do."

Cllr Ruane said he felt "badly let down" by the Trust.

He said he wants to make sure public money the Trust has received is secure, amid fears over what could happen if it does end up in administration.

His suggestion of a meeting was met with support from other councillors on the Board.

Conservative councillor Tim Sawdon reminded attendees that the council had agreed to loan the Trust £1m in September.

"[So] it is even more important that we follow up on what Ed is suggesting and get to the bottom of this pretty quickly," he said.

Meeting chair Cllr Catherine Miks said: "I quite agree Cllr Sawdon and believe me it will be, there will be some answers."

The meeting heard that at least three members of the board must request the City Solicitor in writing to call the meeting. All members at the meeting agreed to back the request.

Once the City Solicitor has been contacted a meeting will be arranged as soon as possible, usually within 15 working days, an officer said.

But while councillors can invite outside people to attend they cannot call people to meetings, the meeting heard.

Asked about its £1m loan to the Trust, Coventry City Council confirmed to the LDRS yesterday that loan monies have not been repaid in full.

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