Bury St Edmunds: Management merger will increase Theatre Royal’s ‘financial resilience’, report claims
09:12 30 November 2012
A MANAGEMENT merger of two Bury St Edmunds venues would provide a Regency theatre with “increased financial resilience” rather than crippling debts, according to a council report.
The introduction of a ‘Single Operation’ business plan would see the charity that runs the Theatre Royal also take on the St Edmundsbury Borough Council-owned Apex.
Critics, who have questioned the sustainability of the Apex’s £775,000 current subsidy, have previously said the plans could lead to the playhouse shouldering debts and being put at risk.
But the Two Year Review of the Apex, which is also intended to expose the strengths and weaknesses of the possible management merger, has suggested such fears are unfounded and that a formal partnership could lead to increased financial stability for the theatre and savings of £145,000 in the first year alone.
Furthermore, a letter from funder Suffolk County Council states that the Theatre Royal had been “struggling to manage over the past five years” and feared in 2011 it would cease to “continue its operation.”
The letter from Judy Terry cabinet member for Economic Development for Suffolk County Council to John Griffiths, leader of St Edmundsbury, said that following a “preference” from the Theatre Royal’s board earlier this year for a joint operating model, its funding to the venue “could be transferred.”
Last night Sara Mildmay-White, St Edmundsbury Cabinet member responsible for Culture, said she believes “there are many benefits” for shared management.
Theatre bosses, who are currently carrying out a public consultation into the future of the venue, said their commitment was to find a “sustainable business model for the Theatre Royal going forward.”
The extensive report, which will be presented to the St Edmundsbury Overview and Scrutiny Committee on December 5, includes an analysis of the “common fears” about the impact of the proposal on the theatre.
Responding to claims that the theatre breaks even while the Apex runs at a loss, the document states that both venues are in “exactly the same position” and operate with planned subsidies.
It states: “The theatre, like the Apex, requires a subsidy from public funds (£335,000) and also depends upon considerable private donations.
“The reliance of the theatre on grants, donations and fundraising is something in order of £500,000 a year.”
The report states that the Apex is fully-funded by the council and therefore has no debts to pass on to the theatre.
It also claims fears that money donated to the theatre could be spent on the Apex could be resolved by a ‘firewall’ agreement.
The idea that the council and other funders are forcing the theatre to join the Single Operation, in order to rescue the Apex is also rejected in the report.
It states: “The Council did not initiate contact with the Theatre Royal. It was invited to join this review by the Theatre, Arts Council England (ACE) and Suffolk County Council (SCC).”
The report also claims the Single Operation business plan could lead to £145,000 savings in the first year alone, depending on staffing structures and the impact of a single box office.
In addition, the review states that shared management would provide other financial advantages for the Theatre Royal, including the mitigation of “unavoidable future grant reductions” from the ACE and SCC and assisting cash flow through the council’s management fee.
For the first time, the report also states that these two main funders are “supportive” of the Single Operation “in view of the strategic benefits it offers.”
The report concludes that the link with the council could provide “increased financial resilience and stability to the Theatre Royal.”
Ms Mildmay-White, who is leading the Apex review, said a shared management system had more than just financial benefits.
She added: “This could focus on making Bury St Edmunds the regional centre of a thriving and vibrant performing arts scene. It will need goodwill and a great deal of firm commitment from those responsible for both venues if this is to succeed and meanwhile the council will continue with our plans for an exciting future for the Apex.”
Simon Daykin, chief executive at the Theatre Royal, said: “Obviously we have been involved in a process to determine what is the best option for the Theatre Royal going forward.
“Throughout this entire process our one commitment is to find a sustainable business model for the theatre going forward. So while we want to work in partnership with the council that has to be our primary and overwhelming concern.”
He added: “There are lots of options on the table and the Single Operation is one of them.”
Judith Shallow, a member of the Theatre Support Group, said, the group were considering the report and looked forward to presenting their views at the Overview and Scrutiny Committee.