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HLF planned to axe £9.5m railway museum funding a month before announcement

Jonathan Knott, 14.02.2018
Lead partner had the impression that project was “set fair”
The Heritage Lottery Fund (HLF) planned to withdraw £9.5m of funding for a railway museum project in Leicester a month before the lead partner was told on 13 December, according to documents obtained by Museums Journal under a freedom of information request.

An operations report for a HLF board meeting on 14 November said: “To note that in December we will be proposing that the major batch project – Main Line – Bridging the Nation, Leicester – does not progress as there are fundamental changes to the approved processes and the risks are significant.”

Michael Gough, the managing director of the Loughborough-based Great Central Railway (GCR), the lead partner on the project, estimates that if the project partners had been informed of HLF's withdrawal of support on 14 November, they could have saved more than £20,000 in contractor and staff costs.

After 14 November, the HLF continued to discuss details relating to the project with the GCR. On 16 November, the organisation’s deputy director of operations sent an email to the GCR’s director and general manager “clarifying risks and unknowns from a HLF perspective and answering the question about contractor’s costs”, according to information provided by the HLF.

The email was sent in response to an email from Gough, which he says was on the 9 November (the HLF’s information said the email was sent on 8 November).

Gough said that his team’s impression at this point was that the project could still go ahead.

“At that stage, everything was still set fair as far as we were concerned for a decision to be taken at a board meeting in December,” he said. “Arguably I would have thought that if the recommendation was not to proceed, then they’d have had the decency to come and tell us that in November and not December. Not only was there a lot of anticipation at this end, but costs were being incurred as well.”

Over the month, a contractor for the project was on hold and charging pause costs, some of which were being paid for by the GCR and Leicester City Council, a partner on the project.

Jonathan Platt, the head of HLF East Midlands, said: “From June to December 2017, HLF officers were in frequent contact with the Great Central Railway to discuss the significant risks to the Main Line project and how these could be addressed.

“Unfortunately, major concerns remained about the timescales, costs and management of the project, and a decision to withdraw HLF funding was recommended by officers. However, any final decision to withdraw funding must be agreed by the HLF board and as soon as this took place in December, it was communicated to the Great Central Railway.”

The project would have created a new museum to house locomotives and other objects from national and local collections alongside the Leicester North terminal of the GCR, a predominantly steam-operated heritage railway.

The plans, which were originally led by the GCR in partnership with the National Railway Museum (NRM) and Leicester City Council, received a first round pass from the HLF in 2015.

Following delays to the project, the HLF was presented with a revised version of the plans in October last year under which Leicester City Council would have become the lead partner, with a view to setting up an independent trust to manage the project. Leicestershire County Council would have contributed £1.5m and in-kind support.

But at a meeting of the HLF board on 12 December, an operations report said that “despite the commitment of the local authorities to the project, there remain a number of unknowns which represent a real risk to HLF” and recommended withdrawing support.

The report pointed to the future operational costs and management arrangements of the trust as a particular area of concern, and said that increased project costs and further delays would be likely.

It also said that the GCR had experienced “significant governance problems both at board and CEO level”. These contributed to a delay in the project’s second round application, which was due in June, although the report said that this and other issues were now “largely resolved”.

At the time of the decision, Gough, who joined the organisation in July, said that he was “genuinely astonished” and Leicester’s city mayor Peter Soulsby said: “I can only imagine that the HLF is over-committed elsewhere and needs to claw this money back for other projects.”

Soulsby told Museums Journal that he had the impression that the HLF had been “desperate to find an excuse to turn us down”. He said he believed that the revisions to the project had been “nothing particularly unusual”.

In response to these comments, an HLF spokeswoman said that funding was withdrawn for no other reason than the significant risks the project posed to public funding.

In December, the HLF announced changes to its grant making following a tailored review of its operations. The organisation expects to distribute around £190m in 2018-19, a 37% reduction from the current financial year. At the time of the announcement, the HLF said the changes would “help us rebase ourselves to ensure that income, commitments and resources are aligned”.