Mystery surrounds the festival’s closure, which comes just months after the organisation was recruiting for a new director and in spite of repeated projections of a budget surplus.
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The City of London festival is to close after 53 years in operation, due to what the City of London Corporation has called a “sudden and significant” deterioration in its financial circumstances.
In a statement on its website, the festival – run by The City Arts Trust – said it had become increasingly difficult to attract the necessary level of funding in the competitive funding environment.
Following a “lengthy” consultation with the Corporation, which is the festival’s largest single donor, the festival board took the “very difficult” decision to close the festival.
The Corporation provides a core annual grant of £350k to the festival. It said it felt unable to continue its support in the light of the festival’s financial circumstances, and after discovering that “it would not be possible to stage future City of London Festivals” without additional funding.
A statement said: “The City of London Corporation has a duty to use its resources efficiently and effectively which, in turn, protects its investments for future generations.”
Competitive funding environment
The City of London Corporation’s arts and culture budget was worth £27m in 2013, and due to the small population resident in the borough, has by far the highest spend per capita on culture in England (£3,554.79).
£413k has been pledged to support the four-day festival commemorating the 350th anniversary of the Great Fire of London, due to take place in September, and regular funding has been committed to the Spitalfields Music Festival. The forthcoming move of the Museum of London to a new site in West Smithfield, and the London Symphony Orchestra’s new concert hall, will also receive funding from the Corporation.
Staff changes
News of the festival’s closure follows the departure in September 2015 of festival Director Paul Gudgin after two years in post. The festival advertised for a new Director in October, intending to fill the £60-70k role in December, but declined to comment on whether a suitable candidate was found and employed before its closure last week.
That same month the Corporation asked festival board member Vivienne Littlechild – who was also chair of the Corporation’s Culture, Heritage and Libraries Committee - to leave the City Arts Trust Board to “ensure that a clear model of accountability was in place”, both “artistically and financially”. The Committee’s deputy chairman, Graham Packham, was asked not to take up a position on the board in her place.
Odd timing
The festival has enjoyed considerable critical success and has been described as “strategically and reputationally desirable” by the Corporation for diversifying the city’s artistic offer and retaining sponsorship and partnerships in the context of public sector funding cuts.
But its accounts reveal that 2015 was the fourth consecutive year in which it had returned a deficit. The organisation was recovering from a shortfall that peaked at £169k in 2014 and wiped out the festival’s reserves, and its liabilities were recorded as £300k at the end of 2014.
The figures for the 2015 festival were much improved, with the deficit falling to £12k. The festival was predicting a £38k budget surplus for 2016, making the Corporation’s decision to pull its grant all the more surprising. It had hitherto been flexible with the festival’s funding, paying its core grant early in 2015 and permitting annual £30k loan repayments for a £150k pop-up venue for the festival in 2014 to be deferred by a year. The closure of the festival means that this loan is now unlikely to be repaid.
Among the other victims of the closure will be the Barbican Centre – itself supported by the Corporation to the tune of £17m a year – which ran the festival’s box office.
The festival announced its closure on 11th April 2016.
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