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More money woes predicted for troubled Leeds theatre company

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LEEDS city council has launched a new internal investigation into its flagship theatre company in the wake of ongoing questions about its finances and long term future.

The YEP revealed last month that the authority has signed off a £653,000 bailout of the Grand Theatre, and the umbrella company which runs two other cultural institutions, the City Varieties and Hyde Park Picture House, to allow it to plug a huge deficit.

But new figures for the current financial year reveal the company continues to struggle, and further taxpayer help might well be needed unless the management structures are radically overhauled.

New figures have revealed the historic theatre is actually in profit, and is being hampered by huge losses at its two partner organisations.

Coun Lucinda Yeadon, the council’s culture and leisure portfolio holder, told cabinet colleagues that while the Grand Theatre was expecting to post a profit of £90,000 in 2014/15, Hype Park Picture House is operating at a projected loss of £47,000 and City Varieties at a huge loss of £275,000. The Theatre’s educational arm is also operating at a £73,000 projected loss.

This means that after a £200,000 council grant for 2014/15, the company will still be struggling with a deficit of £300,000 or more.

A report presented to the council’s cabinet advises the authority to “step back and review the Grand Theatre’s operation, look at possible governance options and make recommendations as to how this ongoing financial trend will be reversed”.

A meeting was told that the council’s internal watchdog, its scrutiny board, will be asked to investigate the options.

Opposition group deputy leader Coun John Procter, stressed that a huge part of the problem was that the council’s annual grant to the company had been substantially reduced since 1996, when it was £500,000 and would have covered much of the current deficits. “We burdened them with the City Varieties”, he added, referring to the historic decision to bring the institutions together.

The company, the Leeds Grand Theatre and Opera House Trust Ltd - which is council-owned but managed at arms-length - started the last financial year with a massive £843,000 trading deficit, with £190,000 plugged by its council grant and another £653,000 from the recent council-funded bailout.

An ongoing investigation into alleged fraud and misappropriated funds of up to £100,000 has further complicated matters.

At the cabinet meeting, Coun Yeadon acknowledged that in hindsight, recent debate should have focused on the overall company rather than the Grand Theatre itself.

“The current financial climate that we are in makes it imperative that we can find a way forward,” she said.

Councillor Keith Wakefield, leader of the council agreed that the debate had focused on the Grand and that was “an unfair reflection of the complexities” of the situation.

He urged the council’s scrutiny watchdog to “come up with a better management vehicle” to protect a “fantastic asset”.

 

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