Local authorities

Plans to turn Octagon Theatre in Yeovil into Somerset’s ‘Flagship Arts Venue’ could be in jeopardy after a Somerset Council report found rising costs are making the redevelopment “unaffordable”.

The works were slated to cost £29m when approved by the council in February, but the report says costs have “dramatically increased” due to rising interest rates.

A statement from Somerset Council explained: “The business case for the Octagon redevelopment was initially approved on the premise of borrowing £16.318m which would be repaid, plus interest, by users of the venue through tickets sales and the ticket levy. 

“Since then, interest rates have risen four-fold, from 1.5% when the business case was approved to around 5.6% last month – dramatically increasing the costs of the project, even if construction costs stay the same.”

The report suggests the current scheme could be scrapped in favour of an “entirely different” cheaper renovation costing £9m. 

However, this would mean a £10m grant from DCMS and Arts Council England, which has been slated specifically for the originally approved project, would be pulled.

The report comes as Somerset Council reviews all its capital projects, as it is predicted to overspend by £26.1m this financial year.

Octagon Theatre was shut to the public in April. While no visible work has yet begun, and a contractor is yet to be appointed, the council has already spent £1.77m on a range of preparatory works.

Somerset Council's Executive is expected to review the planned project at a meeting on Wednesday (4 October).

Meanwhile, Yeovil Town Council will hold a meeting the day prior to “ensure the future of the Octagon Theatre project”.

Hampshire Culture Trust has said the closure of multiple museums and arts venues across the county is “inevitable” if funding cuts proposed by Hampshire County Council go ahead.

The council, which is the trust’s largest funder at £2.5m annually, has proposed cutting its funding by almost 50% as part of a recent budget review.

The trust operates museums, art galleries and arts centres that attract 600,000 visitors anually and is responsible for 2.5m museum objects.

A council spokesperson told local press the council is facing an estimated budget shortfall of £132m by April 2025.

“With such major budget constraints, we are having to consider very carefully how we can close this funding gap in future and regrettably, some very tough decisions are now needed on what the authority can and cannot continue to do in future.”

Paul Sapwell, Hampshire Cultural Trust Chief Executive, said the trust has huge sympathy for the council’s position but urged for consideration of whether the reduction is proportionate.

“We want to talk about the size of the reduction, the timescales of which they want to make that reduction, what those consequences would look like, and whether there are opportunities to mitigate that reduction through greater partnership to mutual benefit,” Sapwell added.

“Future venue closures across the county will be inevitable if a cut of this scale is agreed. We believe a better solution can be found and that the trust can have a positive future, although tough decisions will need to be made.

“We believe a solution exists and we want to work with the County Council to find it.”

A proposal by Peterborough City Council to set up a non-profit company to run Peterborough Museum, Flag Fen and its libraries until 2029 endangers the future of the city’s cultural sites, a civic group has warned.

The leisure services were previously run by charity Vivacity, which ended its contract in 2020, citing financial difficulties.

The responsibility for running the services passed the Peterborough Limited, the council’s subsidiary firm, last year.

The Conservative-led council said the plan would save £2m at a time of budget deficits and affirmed its commitment to securing the future of leisure, culture, heritage and library services.

“Since the demise of the Vivacity and the rising cost of utilities, we don’t have sufficient funds to maintain the service as it is,” said Rob Hill, one of the council officers who worked on the latest plans.

“Moving the services into the subsidiary will allow us the opportunity to bring costs down, secure best value and ultimately avoid having to close any of these services down in the future.”

But opposition councillors and members of Peterborough Civic Society have criticised the plans, citing fears that they might lead to funding cuts.

“The museum could potentially lose out on funding... We think the new proposed governance model might not meet the national museum standards”, said Toby Wood, Chairman of the civic society.

“We have written to the leader of the council asking to pause this plan but we are not being listened to,” he added. “There’s anger and concern the city could be left without any culture venues.”

Conservative council leader Wayne Fitzgerald defended the plans at a cabinet meeting this week, claiming the council takes the provision of leisure, culture, heritage and libraries seriously.

Steve Allen, deputy leader at the council, said that the company would be set up and is expected to be ready to take over care of the venues by the end of the year,

“We are not selling the family jewels,” he said. “We are fully committed to securing a strong cultural and leisure heritage offer.”

The UK Housing Secretary, Michael Gove, is expected today (Tuesday 19 August) to appoint commissioners to manage Birmingham City Council (BCC) after the local authority effectively declared itself bankrupt, according to a report in The Times.

It is anticipated the commissioners will oversee the daily management of the council and make recommendations about what assets it can sell to generate funds. Council leaders are due to convene on 25 September to present a financial recovery plan laying out in detail what they will sell.

In 2015, the city sold off the National Exhibition Centre (NEC) to a private equity firm for £307m to help settle a £1.1bn bill stemming from a historic equal pay ruling. That firm sold the NEC three years later for £800m.

In addition, BCC has revealed it is facing a bill of up to £760m in further discrimination claims, along with £100m in costs for a failed IT project. 

There is now speculation that cultural institutions across the city, including Birmingham Museum & Art Gallery (BMAG), the 17th century Jacobean mansion Aston Hall and the Library of Birmingham, will be sold at a cut price to meet the current deficit. 

Even if they don't end up on the chopping block, there is still concern for the arts organisations that BCC supports, including the Birmingham Museums Trust’s (BMT) nine museum sites and contemporary art gallery Ikon. BCC investment equates to approximately 45% of BMT’s total annual funding.

Last month, Birmingham announced it was facing a budget shortfall of £87.4m for 2023-24, rising to £164.8m for 2024-25. It issued a section 114 notice in which it committed to spend money only to protect vulnerable people and maintain statutory services.

It is the seventh UK council to issue a section 114 notice since 2020, including Croydon and Thurrock, with at least 26 English local authorities thought to be at risk within the next two years. 

An arts venue in Derby is trying to raise funds for urgent repairs.

The Quad cinema and gallery, which recently received an emergency loan of £150,000 from the city council to help it with rising energy costs, said it needs to raise £30,000.

An online appeal launched in July has so far attracted just under £2,500.

The venue said the loan from Derby City Council was "really helpful" but that the site, which opened in 2008, is "suffering from wear and tear".

Quad's management team explained: "We really need to update specific equipment to improve accessibility for all our customers and also to remain as environmentally sustainable and efficient as possible.

"This fundraising is critical for us to raise money to replace equipment in Quad which is outdated or nearing replacement, in order to keep our facilities up to standard."