ACE puts Firstsite under special measures

Gary Noakes, 16.02.2015
Colchester gallery’s business models and governance to be reviewed
Colchester’s Firstsite gallery plans to take on more staff, revamp its programme and instigate a board-level shake-up after being placed under special funding arrangements by Arts Council England (ACE).

ACE put two organisations – Firstsite and English National Opera (ENO) – into special funding arrangements on 12 February. Neither will be admitted to its National Portfolio of organisations for 2015-18.

An ACE statement said: “All companies offered National Portfolio status must demonstrate their business plans and their governance are robust enough to ensure the organisations are sustainable over a three-year funding term. In the case of these two companies the arts council has continuing concerns, which it wants to see addressed.

“The special funding arrangements with ENO and Firstsite, which will run for two years and one year respectively, will allow the arts council to work closely with each company as they review their business models and governance and to set rigorous milestones to monitor their progress. Entry to the portfolio at a later date will be possible, but will depend on the extent of progress made.”

Firstsite’s director Matthew Rowe declined to detail the gallery’s deficit but said he regretted not engaging a forensic financial controller when he joined in January 2013.

“I did an organisational review, but the scale of the financial challenge was not apparent,” he said.

He said that he planned to remain in his role and added that it was going to take more than a year to turn the gallery around.

Action on Firstsite comes only four years after the £28m building opened and means Firstsite is only guaranteed arts council funding for the next financial year. This includes £814,517 of National Portfolio Organisation revenue funding plus transition funding, still to be confirmed.

In the current financial year, ACE is providing more than £886,000 (49%) of Firstsite’s total income, with the remainder coming from Essex County Council and Colchester Borough Council. In total, ACE has given £7.3m to the gallery, including a capital grant for construction. ACE said its decision followed consultation with local funding partners and an examination of “revised” gallery accounts.

An ACE spokeswoman said: “A series of milestones and conditions must be met in order for the grant funds to be released to Firstsite.”

She said that these included providing a realistic and viable business plan, “strong new governance” including a new chair, refreshed board and a “viable” staffing structure to lead the organisation through a transition.

Rowe said the gallery, which has 15 full-time equivalent employees, was “chronically understaffed” and needed around 25 staff members.

Changes to the board would involve seeking members with business experience. Donors will be sought and the gallery will focus on venue hire and retailing. A “culturally-minded” catering company has already been appointed.

Rowe said he planned to bring the gallery closer to its local community. A lot of its outreach, such as using drawing to work with recovering veterans at Colchester Garrison, had gone unnoticed. “We can bring things like this into the gallery,” he said.

Another plan is to work with 16 local studios to help with business development and to display their work in the gallery’s cafe. New work that references Essex and East Anglia would be commissioned, he added.

“It’s a way of demonstrating we are not just here for the arts elite,” Rowe said.

The gallery, designed by Uruguayan architect Rafael Viñoly, has been dogged by criticism since it opened three years late and £9m over budget.

Local Liberal Democrat MP Bob Russell said: “At the outset I warned that the project was not financially sustainable. Subsequent events have turned out to be even worse than I had predicted. The whole thing is a disgrace. A shambles. I will be seeking an urgent meeting with arts minister Ed Vaizey.”

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