Cabinet Report |
|
|
|
Report of Head of Development and Corporate Landlord Author: Andrew Busby E-mail: andrew.busby@southandvale.gov.uk Wards affected: Didcot, in particular, but potential district-wide impact. Cabinet member responsible: Cllr Pieter-Paul Barker, Cllr Maggie Filipova-Rivers Tel: Cllr Pieter-Paul Barker 01844 212438, Cllr Maggie Filipova-Rivers 07850 141623 |
|
|
Future Direction of Cornerstone Arts Centre
Recommendation(s)a) That Cabinet endorses the Cornerstone Development Action Plan (Appendix 6) to optimise operation of the in-house delivery model before any consideration is given to alternative operating models. b) That Cabinet acknowledge that the current implementation costs outlined within the action plan, expected to be incurred over the lifetime of the action plan, are subject to agreement of full Council at its meeting in February 2024. |
Purpose of report
1. To propose a future direction for the discretionary service known as, Cornerstone Arts Centre to enable ongoing development of the service to offer the most effective and efficient operation. This is to maximise community benefit and financial efficiency, and to establish the long-term sustainability of the centre.
2. To outline the proposed Arts Centre Development Action Plan, including the reasons why a plan has been developed, how the actions within the plan were identified and what the desired outcomes are. This report also outlines the impact of the actions that are proposed to be measured during the initial implementation period and in the future.
3. Longer term actions can only be indicative at this stage, as the plan will need to be kept under review and the impact of earlier changes considered.
4. Any council decision that has financial implications must be made with the knowledge of the council’s overarching financial position, as reported to full Council in February 2023 when the budget for 2023/24 was agreed. For South, the position reflected in the council’s medium-term financial plan (MTFP) as reported in February 2023 showed that it is due to receive £644,000 less in revenue funding than it plans to spend in 2023/24 (with the balance coming from reserves), with this budget gap expected to continue in future years. However, there is great uncertainty over this due to a lack of clarity from government.
5. The future funding gap is predicted to increase to over £8.5 million by 2027/28, based on current cautious officer estimates of future funding levels. Whilst it is anticipated that overall funding for the council will remain relatively unchanged in 2024/25, the lack of certainty on future local government funding from 2025/26 onwards means the level of funding, and the resulting estimated funding gap, could be significantly different from current officer estimates, in either a positive or negative way. Every financial decision, particularly those involving long-term funding commitments (i.e., those beyond 2024/25), needs to be cognisant of the potential for significant funding gaps in future years. The budget report for 2024/25 will provide an update on the council’s financial position.
The provision of Cornerstone Arts Centre provides links to our Corporate Plan Objectives
6. Improved economic and community well-being
· Cornerstone Arts Centre contributes to the wellbeing and health of our community through delivery of a variety of programmed arts activities and as a venue for community activities.
· Implementing the proposed action plan (Appendix 6) will allow Cornerstone to improve the services provided for the community, further increasing the positive impact the centre has on the wellbeing of the community.
· Cornerstone Arts Centre contributes to the economic wellbeing of Didcot and the surrounding area, as well as the potential economic benefit to the council. It is a key entertainment venue in the district, attracting people to the town centre. The centre also offers an affordable venue for community groups, businesses, and residents to use to deliver their own income-generating activities.
7. Investment that rebuilds our financial viability
· The action plan includes looking at ways to improve the financial viability of Cornerstone, including accessing potential grants and external funding, reviewing pricing and marketing strategies to maximise income. It would continue to develop the financial management processes to identify innovative ways to further boost income generation and minimise costs.
· There is a significant decarbonisation project planned for Cornerstone over the coming 12-15 months, which will see some major upgrades to the centre to help reduce its carbon footprint and energy costs. This will reduce the building’s operating costs.
· The proposed action plan also includes several capital projects and improvements for the centre, from additional external branding (see appendix 1) to undertaking pre-emptive building improvements. This will ensure the longevity of the building and its activities for the future. By investing in pre-emptive building improvements and maintenance will minimise the need for costly substantial, avoidable or urgent works in the future.
8. Homes and infrastructure that meet local needs
· As one of the key providers of entertainment/Arts infrastructure for Didcot, the surrounding area, Cornerstone holds an important role for the community. It is the only dedicated performance and arts venue in the town, offering affordable and accessible artistic programming for all.
· Its town centre location offers a focal point for the community, providing an entertainment venue and key meeting place for the community. Currently several local groups use the venue as an informal meeting space to hold activities for a range of people, including vulnerable groups. While some sections of the community are aware of this, the action plan will look to promote this more widely in the community. The venue is a designated ‘Safe Space’ for the community, offering refuge for anyone, in particular as a safe haven for vulnerable individuals where they can come for assistance.
Background
9. The council is the freehold owner of the land upon which Cornerstone Arts Centre is built. It forms part of a lease known as Orchard Centre Phase 1, to Corona Vulcan (Didcot) Ltd, the superior leaseholder, and is for a term of 150 years from March 2005. There is a lease back to the council, of the same date and term, for a number of properties on Station Road, which include Cornerstone and the adjoining cinema. Whilst this lease has a peppercorn rent, the council is responsible for services charges and for 23/24 this amounted to circa £40,000 for Cornerstone. The lease is silent on matters of use, alteration, assignment and subletting.
10. Cornerstone Arts Centre was built by the council in 2007 and opened in August 2008, offering an in-house artistic programme of shows, classes, workshops and exhibitions, a café, an auditorium, and several multi-purpose rooms/studios for hire. The Café was run by an external operator until 2016, when the café function was brought in-house. The Centre, including the café, currently employees 14 FTE staff and 15 casual staff. Currently four FTE posts are shared with Vale of White Horse District Council for their arts venue in Wantage, one split 50/50 and three split 70/30, with Cornerstone receiving the higher portion of time.
11. Between March 2020 and August 2021, Cornerstone closed to the public due to the Covid pandemic. During this period the venue was repurposed as a community food hub, preparing food parcels for vulnerable residents and supporting the Community Hub team. The arts centre staff were redeployed where possible. Cornerstone staff also provided a modest online programme during this period for the wellbeing benefit of the community.
12. In August 2021, the venue reopened to the public and began re-introducing and rebuilding programmed arts activities. The level of programmed activity is returning to pre-pandemic levels, despite a significant reduction in the programming expenditure budget since 2020. For example, in 2019/20 cornerstone booked 97 shows, while in the last 12 months 75 different shows were programmed. The cost of performers in the same periods has reduced from £275,000 to around £115,000. This significant cost saving resulted in efficiency was achieved through amendments to the programming selection and negotiation process on performance fees followed by the Arts Centre team.
14. Through 2022/23 officers commissioned a range of advisory reviews of Cornerstone by Artisan Estates Management Limited, LGA/Arts Council peer review and Bryn Jones Associates Ltd, to inform officers’ work to review a range of options for cabinet members to consider in relation to future operation of Cornerstone. Consultancy support from consultants working in the Oxfordshire arts sector was also obtained to support this work. Additional work has included a review of programming costs, capacity assumptions, catering options, stock condition review of the building and external areas.
15. The reviews and further investigations have provided a range of guidance for immediate and ongoing operational actions as well as options for future management of Cornerstone. It should be noted that these reports are each a point-in-time review, recognising that there are some inaccuracies/assumptions within them and that by their nature as, the situation described in them may no longer be accurate.
16. The Artisan report focused on the building viability and uses, the peer review focused on the cultural aspects of the service and the BJA review focused on the business operations, with some consideration towards the cultural aspects. All three reports included several recommended operational and strategic improvements in their areas of focus, with frequent overlapping areas, such as customer engagement, and maintaining a well-presented venue. See below the outline scope of these reviews.
Artisan Property Options Appraisal
(Appendix 3)
17. Artisan was commissioned by the Strategic Property team to undertake an options appraisal to explore avenues open to the council from a real estate asset management perspective. The approach of the Artisan property options appraisal undertaken in May 2022 for Cornerstone was to explore:
· the constraints that apply to the asset, to determine what is possible
· demand and supply for what is possible in the asset’s location
· strategies to optimise the asset’s potential in response to the findings.
The Local Government Association (LGA) and
Arts Council England Peer Review (Appendix 4)
18. In November 2022 the council underwent an LGA and Arts Council England Peer review of Cornerstone. The purpose of the review was to give an external perspective on the cultural, community and other potential value of Cornerstone and the potential for future development and sustainability of a council-owned resource. In particular, officers asked the peer team to focus on the following issues:
· How can Cornerstone best balance artistic, cultural and community aspirations with the need to deliver revenue to reduce the net cost to the council?
· How can Cornerstone define and measure cultural and community aspirations?
· is a curated programme of courses and workshops still the right approach?
· What scope is there to use Cornerstone as a resource for community development, social regeneration, training and education, health and wellbeing, and other council priorities within its role as an arts centre?
· How can Cornerstone become more inclusive and accessible for the evolving demographic of Didcot and surrounding areas?
19. The peer review report set out several operational recommendations, many of which are already in the process of implementing and are also captured in the action plan.
The Bryn Jones Associates (BJA) Business
Options Appraisal (Appendix 5)
20. BJA was commissioned in 2022 to review the business options available to both Cornerstone and the Beacon (as this was a joint report commissioned with Vale of White Horse District Council). The report concluded in early 2023. The scope of the BJA business options appraisal was to:
· establish the best cultural and community models for Cornerstone (and the Beacon as this was a joint report commissioned with Vale of White Horse District Council)
· recommend a preferred option that will establish Cornerstone as an artistic and cultural hub for South Oxfordshire, maximise its income generating opportunities and keep the cost to the council to a minimum to support the council’s long term financial position
· identify opportunities to benefit from external funding sources and partnerships.
21. BJA conducted an information review including finance, programming, hires, ticketing, catering and marketing; one-to-one meetings and consultations with relevant groups including members, officers and venue staff; mystery visits and area familiarisation; visits to other venues in the area; and secondary research including area demographics, arts and local business sector reports.
22. The BJA report included general recommendations for operational improvements, as well as management models. Officers are investigating and implementing the operational recommendations where appropriate and are reviewing the models in more detail. They recognise that some of the details, such as the financial assessments, are not in line with council officers’ figures and that the timing of this review required significant assumptions as the most recent data available was heavily impacted by the pandemic.
23. Also, in 2022 the council commissioned a decarbonisation survey of the site, which led to a significant decarbonisation project for Cornerstone that the Property Assets Project Team are managing. This decarbonisation work has secured a significant Public Sector Decarbonisation Scheme Grant, which must be spent by 31 March 2025 and requires the council to operate the building for a minimum of three years after practical completion. The council has committed £1.585 million Community Infrastructure Levy (CIL) spending towards this project and is expected to be delivered during 2024/25. It includes replacing the existing heating system with an air source heat pump system and installing solar panels.
24. At the end of 2022, an officer working group was set up to review the various consultant reviews, undertake additional investigations, and prepare an Arts Centre Development Action Plan for Cabinet to consider. This group includes representation from the Arts Centre Team, Finance, HR, Legal and Strategic Management Team with support from an external arts consultant from Oxford Arts Community Interest Company (CIC). The action plan incorporates the recommendations that were identified by multiple parties and/or that are expected to improve the centre’s financial or community benefit performance.
25. Shown below in Chart 1 is the annual net cost of Cornerstone to the council for recent years. It also shows the current forecast outturn for this year 2023/24 and the current forecast net costs in 2024/25. We have included the years affected by the pandemic in 2020/21 and 2021/22. During this period the centre was predominantly closed and repurposed. The figures in chart 1 also includes the very recently confirmed £24,000 rental income from a high street bank for sole use of one of the meeting rooms for an initial period of 12-months.
26.
Chart 1 – Combined annual financial performance of the
arts centre and cafe
27. Chart 1 shows the combined 2024/25 net cost forecast for Cornerstone Arts Centre and the cafe, inclusive of additional spending on marketing and delivery of the action plan. It also includes income growth/saving projections as a result of the investment. The income growth suggested (see Appendix 2) shows a cost saving target, were all actions and additional activity being delivered from the 1 April 2024. The actual savings will be tracked through the financial year as actions are delivered.
28.In addition to identifying various operational improvements the centre could implement, the BJA business review also investigated some potential alternative long-term operating/governance models for the centre. The review noted that the financial viability modelling for the operating options was based on information relevant to a specific point-in-time when the centre was still in the early stages of recovering from the Covid pandemic and reflected previous approaches to alternative funding sources, which may have subsequently changed as the sector has evolved post pandemic.
29. Officers recommend implementing the Cornerstone Development Action Plan before Cabinet consider any alternative operating models for Cornerstone. To provide current, post-pandemic market data to assist in comparing operation options.
Options and Action Plan
· the running of the centre by an external organisation, for example a Charitable Incorporated Organisation (CIO)
· an outsourced operator model.
31. It is important that the council review the implications of each of these options in full and set out clearly to Members the associated implications of each option, including any risks and future governance arrangements.
32.The proposed Arts Centre Development Action Plan incorporates actions suggested in the Artisan, LGA/Arts Council England Peer Challenge, and Bryn Jones Associates reviews, and by the officer working group. See Table 1 for a list of the objectives, reason for inclusion and desired outcomes and Appendix 6 for the objectives, actions, measures, desired outcomes, responsible teams and target dates.
34. Officers will provide relevant stakeholders (as identified in the action plan) with regular progress updates and performance monitoring reports.
35. After the 18-month implementation period, officers will bring forward a report to Cabinet to provide an update on the implementation and impact of the action plan. They will also provide an updated medium/long-term financial forecast outlining the level of financial commitment required from the council to retain the centre as an in-house service following the implementation of the action plan.
