Decision details

In view of the Company's position, an update report is being prepared for consideration as an item of urgent business. The report will include options for the way forward.

(Cabinet Member with Special Responsibility Councillor Hanson)

Cabinet received a report from the Chief Executive to provide an update on the Storey Creative Industries Centre (SCIC) Ltd’s current financial position and to determine the way forward regarding the Council’s involvement in the Centre.  An exempt version of the report that included commercially sensitive information had been produced to support Cabinet’s decision-making.

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

OPTIONS FOR THE WAY FORWARD

The way forward therefore depended on whether the Council wished to provide a creative industries centre or whether it wished to pursue an alternative future for the building.

In terms of the Council’s Corporate Plan, there was nothing specific regarding the continuation of a creative industries centre although having a successful operation could contribute to:

-        maximising the district’s cultural offer

-        increasing participation in arts, culture and entertainment events.

The Council has committed to working with the Duchy to consider options for the long term use of Lancaster Castle.  The Storey building occupies a prominent position and in future there may be other potential avenues to be explored regarding its use.

The Council still had service level agreements in place with Litfest and the Storey Gallery but these placed no obligations on the Council in connection with the Storey building itself.

Options for consideration were as follows:

Option1

                      Withdraw support for the Storey being used as a creative industries centre, and request a report back on all future options for the building.

Option 2

                      Continue to support the Storey being used as a creative industries centre but under the Council’s direct management and control, authorising the Chief Executive to take actions as necessary, prior to reporting back to Cabinet.

On the basis that the Council still wished to provide a base for creative industries and accepted the risks attached, Option 2 was the preferred officer option.

Councillor Blamire proposed, seconded by Councillor Hanson:-

“(1)      That Cabinet notes that SCIC Ltd is in default of the loan agreement with the City Council and further notes the actions taken in view of that default.”

“(2)      That Cabinet notes the statement put forward by the SCIC Board.”

“(3)      That Option 2 be approved as the preferred way forward for the Storey building.”

“(4)      That any actions necessary to progress the preferred way forward, within the financial framework as set out, be delegated to the Chief Executive and the Chief Executive be requested to report back on actions taken and the details of proposed future arrangements for consideration by Cabinet.”

“(5)      That the Chairman of Overview and Scrutiny Committee be consulted with regard to waiving call-in.”

Councillors then voted:-

Resolved unanimously:

(1)        That Cabinet notes that SCIC Ltd is in default of the loan agreement with the City Council and further notes the actions taken in view of that default.

(2)        That Cabinet notes the statement put forward by the SCIC Board.

(3)        That Option 2 be approved as the preferred way forward for the Storey building.

(4)        That any actions necessary to progress the preferred way forward, within the financial framework as set out, be delegated to the Chief Executive and the Chief Executive be requested to report back on actions taken and the details of proposed future arrangements for consideration by Cabinet.

 (5)       That the Chairman of Overview and Scrutiny Committee be consulted with regard to waiving call-in.

Officers responsible for effecting the decision:

Chief Executive

Head of Financial Services (Resources)

Reasons for making the decision:

The current set up for managing the Storey had clearly failed, exposing the Council to financial and other risks, and requiring significant staff time to help manage the current position.  The company had accepted that it was in financial crisis and could not continue to operate as before; it now sought support in some form from the City Council, as landlord.