Arts Hub Plan Shows 10 Year £900,000 Loss

Secret plans to all but convert the People’s Market to an Arts Hub reveal a planned £900k loss over ten years, which could rise to £2,100,000 if ‘uncertain’ Arts Council Wales funding is not secured.

Councillors will this week be reviewing the business plan for the proposed change of use from People’s Market to an ‘Arts Hub’. As Wrexham.com readers will know we, along with other local and national media, were mistakenly sent a copy of the secret plan, and have already highlighted one potential issue where 10% of the revenue will be based off the Council giving away a town centre carpark along with parking price rise.

Excluding the ongoing subsidies hinted at in the secret reports, the current total estimated cost of the redevelopment is £4,563,500 with £2.3 million from the Arts Council Wales, £700,000 from the Welsh Government’s Vibrant and Viable Places scheme and £1,563,500 from Wrexham Council.

Looking further at the documents it is revealed that the overall loss predicted totals nearly £1m, with a further £1.2m of funding that is integral to the 10 year business plan is ‘uncertain’.

The £120,000 a year funding from the Arts Council Wales is defined as ‘assumed’, with a following sentence reading: “Whilst at this stage there is no certainty of this level or sustained commitment from ACW, the scale of recent annual settlements and discussion around a more strategic sustainable future centred on the new OW development would suggest this level of funding would be ‘reasonable’ to assume”.

There is no information in the 10 year projection of alternative sources of funding if the Arts Council Wales money does not come through, ceases or as with many budgets currently, suffers funding cuts.

The ongoing losses are referred to in the public section of the report allowing some insight to the plans (Such as this Daily Post report) however the longer term view lacks solid numbers, with just the first three years having data and the remaining seven noted as having losses at a ‘similar level thereafter’.

In the document seen by Wrexham.com the base ten year loss projections are Y1: £188,145 Y2: £126,752 Y3: £78,926 Y4: £55,648 Y5: £78,926 Y6: £78,926 Y7: £55,648 Y8: £78,926 Y9: £78,926 Y10: £78,926 (Total £899,749).

These figures are based off an adjusted model, but the document also includes a ‘Pessimistic’ and ‘Optimistic’ view giving a range of the loss over the 10 year period from £600,876 in the most optimistic model to a £1,216,456 loss in the worst case scenario. Both the pessimistic and optimistic models have the £120,000 yearly Arts Council Wales included unchanged.

The secret report does note: “The current repairs and maintenance cost for the People’s Market is understood to be £48k pa which could be transferred across to the new OW organisation. This has not been assumed within the figures presently but would have the effect of reducing the deficit by this amount”.

A ‘general maintenance budget’ is included in the business plan, set at £114k pa, with an unbudgeted note suggesting a ‘reserve or sinking fund’ be established to allow a ‘strategic maintain plan’ to be put in place. Where such a reserve is to be built from in the context of the ongoing losses is not covered in the document.

The report also gives information to two further income sources, totalling around £50,000pa revenue from mobile phone mast placements and ‘ring fenced rent’ from the old Library site that will become the new Town Centre Police Station. The latter has a defined expiry, with no information to what will replace that funding once the agreements expire.

The public section of the report states: “This business plan has been prepared on the basis that the future activities will be managed by an Arts Trust independent of the Council”, with no firm information to where such losses would be covered from aside from a vague line mentioning “…further years may see a reduction in the funding requirement from the Council.”

There is talk of a creation of a Wrexham Trust, a ‘super trust’ that could run several services currently provided by Wrexham Council including the Arts Hub, however such a decision and structure could be decided well after these plans get the green light.

Unfortunately with the planning application and scrutiny documents being placed just prior to Christmas and relevant meetings occurring so soon in the New Year it has not been possible to get further detail from the Arts Council Wales.

Previous questions asked of the consultation process to Wrexham Council remain unanswered, and further queries as explained here were also not commented on.

A markets representative spoke at a previous scrutiny meeting stated their view that “If the Peoples Market does turn into the the Arts Hub what happens to the other two markets as from the accounts it seems they are not going to survive?” The business plan for the Arts Hub refers to a similar financial link: “…high service charges at the People’s Market, which, in turn, support the operation of the other two (smaller) indoor markets in Wrexham.”

The business plan cites the Quarterbridge Report (Wrexham.com FOI’ed a copy of Quarterbridge but it was declined by Wrexham Council on grounds of commercial sensitivity) over the impact of markets to the town, saying Quarterbridge supported the transformation to ‘arts and cultural use’ and that the plans ‘by no means signal the end to indoor market operation within the building’.

There is no further mention of the impact on the other two markets in the town, with the self-raised financial link of ‘support’ being left unexplored or explained.

The future of the market traders in the People’s Market is hinted at, with the redevelopment creating a ‘diversified footfall, which, in turn, will help to assess if the current mix of market traders is still relevant to the location and catchment or might benefit from diversification with specialist traders and/or crafts traders’.

Councillors are being asked by the Council to scrutinise the plan, and recommend the proposed designs and implementation of the project to the Council Executive Board. Alongside this they are also being asked to recommend the spending of £1.5m of Council funds, along with the allocation of associated VVP money for the project, and although the application is already lodged with the Arts Council Wales for their £2.3m contribution that too still requires formal authorisation.

If the above remains in ‘Part 2’ it will be discussed behind closed doors on January 6th (Wednesday), however if it is seen as not ‘commercially sensitive’ and in the public interest it could be brought into the ‘Part 1’ public discussion earlier in the meeting.