City of Culture to be loaned £1m in public cash by council in move that's 'not without risk'
Posted: Wed Sep 28, 2022 3:32 pm
The City of Culture trust is facing cashflow problems in paying for its 'legacy projects'
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."