De La Warr loss shock

The Pavilion Trust says its bankers predict it will break even by 2010.

Now the whole question of Pavilion funding is to be examined by Rother councillors.

The scrutiny body charged with examining the financial future of the building on behalf of Council Tax payers will be invited to set up a working group.

This group would recommend a new Pavilion funding agreement and review the council's contributions.

Currently Rother gives a 500,000 grant to the Pavilion Trust through a five-year agreement until April 1, 2008.

Arts Council England provides 433,000 a year.

The new agreement will give Rother an opportunity to 'review its expectations of the role of the De La Warr Pavilion' and decide a level of financial support.

The working group will ensure the economic and social benefits for residents and businesses in Rother are realised from any grant.

Rother director of services Tony Leonard will tell members: "The business model (the approach taken toward exhibitions, performances, educational activities, pricing, retail, catering etc) that has been developed by the trust has not yet resulted in a break-even position.

"Indeed, in 2005/06 their audited accounts showed an operating loss of 288,518 partly caused by problems associated with substantial increases in utility costs.

"Changes to the operation have been made during 2007/08 but there is still concern that by 2008/09 this loss will not have been fully recovered.

"It should be noted that having re-opened in 2005 as a newly-formed trust, the business case needs to be considered in terms of a new business for which break-even is usually anticipated within three to five years.

"We (as in Arts Council England and Rother District Council) have been advised by the De La Warr Pavilion Charitable Trust that this is the view of their bankers so long as the current level of subsidy to the De La Warr Pavilion Charitable Trust remains.

"The De La Warr Pavilion is considered successful in terms of what Rother District Council set out to achieve, that being to put at arms length the management of the building, to reduce the costs to Council Tax payers, to attract significant external funding for both capital and revenue and to put the De La Warr Pavilion at the forefront of regeneration in this area."

He concludes: "The interests of this council and local residents cannot be reflected in the management and operation of the pavilion if an appropriate working group does not fully review the management agreement and associated funding commitment."

Building work recently resumed in the backstage area after nearly a year's inactivity.

r Observer Comment page 6.