Wrexham Council to run Arts Hub ‘for three years’ minimum as trust model rejected after legal advice

Wrexham Council will run the new multi-million pound arts and market development for a minimum of three years, despite initial plans to hand over the centre to an independent trust from the offset.

Previously it had been stressed that trust ownership and management for the ‘OW People’s Market’ was the best way forward for the development – opening up additional finance opportunities that the local authority could not access. This position had been reiterated to Wrexham.com earlier this year as still firmly the ‘direction of travel’ and a ‘desire’, with the identification and appointment of trustees expected towards the end of this year.

However a report due before the Executive Board next week explains that the development will be kept ‘in-house’ and operated by Wrexham Council for ‘at least three years’ rather than via a trust.

The report references a decision made in July 2016 which authorised thee Head of Housing and Economy, in consultation with the Lead Member, to press ahead with development of a trust for the purposes of managing the newly established Peoples Market/Oriel Wrexham.

However it continues onto state that establishing suitable management arrangements for such a service “is not clear cut”, adding that “complexities regarding State Aid and procurement legislation would not necessarily result in the local influence that has been envisaged”.

Therefore, the report continues, “it makes sense therefore, to ensure that a viable business is established prior to entering into any externalisation of the service”.

Commenting on the management u-turn, Cllr Jones gave background to the situation, stating: “It was felt very important to include a local element in management and that following advice at the time a trust element was the best option.”

He added that ‘a lot of advice’ has been taken by Wrexham Council ‘from various experts’, who had told the local authority that a trust was no longer possible due to EU and UK procurement regulations.

Cllr Jones stated there would have been a “significant risk’ that if a trust was wanted it would ‘have to go out to public advert’, adding that it meant “any organisation within Europe would be able to bid to run the trust. We could not restrict it to a local trust.”

He continued:  “Establishment of a trust that was purely and simply a local trust is something we cannot legally do.”

The trust model had been a factor which had been emphasised throughout the debate around the new development, with plans to create a ‘Wrexham Culture Trust, which would have overseen libraries, museums and associated heritage services,  previously put forward. However this plan was scrapped in 2015 due to no longer being ‘financially viable’.

At the time leader of the Labour group, Cllr Dana Davies queried if the decision will result in an issue over the timeframe and running of the Arts Hub – with Cllr Jones stating: “It will be a trust model. With the timescale this will not impact it, we will have the appropriate Trust in time to operate the markets and the Arts Hub.”

A draft business plan for the Oriel Wrecsam and Peoples Market development accidentally leaked in 2015 (and later made available to the public here) also commented on the strength of the OW People’s Market being run as a trust.

The document states: “The research suggests that removing the restrictions and burdens that inherently come from working within a council set-up, such as bureaucracy and slower decision-making, is one of the greatest advantages of moving to a devolved model. This can directly lead to significant improvements in the speed of decision making.

“Newly gained independence from the council set-up also allows the organisation to become more
business-oriented. The assets can be managed in a more entrepreneurial fashion with greater emphasis and importance placed on marketing and the ability to combine both strategic and tactical planning.

“The shift to an independent state can have a profound impact on the culture of the organisation, as significant changes are required.

“While such change can be relatively slow, a successful transition can be achieved through strong and decisive leadership as well as meaningful consultation with staff to ensure they are involved in the process and are ready to embrace change when it was required.”

However despite the development not being operated by a trust from the offset, Cllr Jones highlighted the possible strength and ‘local involvement’ of Wrexham Council operating the hub for ‘at least three years’ via an in-house delivery team.

He said: “It means the delivery team who were present at the very beginning at the conception of the concept will be the team that will deliver it through to its fruition, and will see it through to being established as a successful trading entity.

“The situation is, the business plan remains exactly the same, it is just that the management structure and the delivery will be in-house rather than in the hands of a trust.”

It was also indicated that once the move to ‘in-house’ management rather than the trust model is ratified by the Executive Board, there will be a further report to look at future management options that will focus on local elements of control.

There is a hint at future management in the report along with shorter term independent trust style ‘board’ influence on the development, with the document stating: “Development of the appropriate stakeholder involvement will be critical in the potential for future external models of governance, it is imperative that the appropriate skilled and experienced individuals are recruited to form a stakeholder management ‘Board’ to work with the Council to influence the development of this facility from the outset and to optimise the opportunities for external management in the future. ”

Despite the change in setup there have been assurances from Cllr Jones that the ‘business plan has not changed’. We pointed out that previously it had been said “this business plan has been prepared on the basis that the future activities will be managed by an Arts Trust independent of the Council“.

The report does state that the principles of the Fourth Street business plan will not change in terms of management operations, meaning that the markets, car park and retail elements will be managed under the plan.

There is no detail given if this therefore means Wrexham Council will in effect be running internally competing car parks, or if the current markets management will be up against the new market offer in attracting tenants.

The change does mean there is possibly around £75,000 savings on the capital project budget, with the same business plan noting: “An indicative budget of £75,000 has been allocated for the transfer to independent governance”, however it is unclear if that is a real saving to Wrexham Council or an internal ‘recharge’ style cost.

The decision will be reviewed every year, and in three years time it is stated ‘consideration should again be given to transferring the services of the OW People’s Market to an external vehicle’.

The report will be discussed by councillors on Tuesday 12th September at 10am. For those who can’t attend the meeting it will be webcast live on the Wrexham Council website.

Often in comments on arts hub related stories there is debate / confusion as to how the development has been funded, so for those uncertain a breakdown is listed below, which does not include ongoing costs.

-Vibrant and Viable Places (Welsh Government) – £700,000
–Arts Council Wales – £2.3m
-Wrexham Council – £1.5m
An additional £500,000 was also announced in March 2016.