Why did the Corn Exchange propose to the Council a transfer of the building when it increases their financial risk at a time of their Council funding is due to cease?
The Corn Exchange Trust is already responsible for the vast majority of the upkeep and maintenance of the building. Under the current terms of the lease, the Council are responsible for replacing very few items and most of the significant financial items have very recently been replaced (air conditioning and lifts being the most obvious).
In 2015 the Council commissioned a conditions report to highlight the capital needs of the building. Under the terms of the asset transfer the Council have already acknowledged that they will continue to replace the items highlighted in this report even if they are not completed by the time the building has been transferred to us.
In reality what this means is that the additional risk to the organisation is likely to be realised in 10+ years. A lot can happen in 10 years; the organisation is likely to have shifted further in a positive direction and other economic factors might also be more favourable than they are at the moment so it is difficult to predict.
However, what we do know is that as a registered charity we are more likely to be able to raise funds from other Trusts and Foundations if we ‘own’ the building so this shift may, in fact, open up more funders to us with this arrangement.
As well, by owning the building increases the Trust’s assets which makes our organisation more sustainable. It’s a bit like owning your own home and it providing more options than renting. The principles are similar and ultimately the benefits to owning the building far outweigh the risks.
What will the Corn Exchange be able to do to the building?
As a registered charity with a very rigid set of rules in our constitution, we are fairly limited on what activities we can deliver under our charitable remit. Therefore, you can be sure that we’ll only be looking to continue running arts and cultural activity from the building.
Nobody should be unduly concerned that the Corn Exchange will be refurbished into a set of apartments or another restaurant – with us owning it, it can only ever be an arts and cultural institution.
If we did ever wanted to change our constitution that provided us with greater flexibility any changes are likely to require agreement from the Council’s planning team as it would require a ‘Change of Use’ and that is unlikely to be supported.
One of the great benefits of owning the building from our perspective is that it enables us to drive forwards any development plans we may have in the future. We’re a fast growing organisation and future developments are made simpler if we own the building.
What if the Corn Exchange has to cease activity or goes into liquidation, what will happen to the building?
The next step of the negotiation is to agree the terms of the arrangement. We would be prepared in these circumstance to explore how we protect the Corn Exchange as a cultural arts venue. That might mean that we negotiate to gift the building back to the Council, or that we would mutually seek to find an alternative arts organisation to take over the running of the building. Whatever the final solution might be, we will be advocating for the best route to protect the Corn Exchange as an important cultural asset.
How will the Corn Exchange manage the reduction in funding?
When the Trust was formed in 2000, the Council’s investment made up 52% of the organisations turnover but with effective management we’ve been able to increase our turnover, increase our earned income and as a result have become less reliant on public subsidy.
In 2017/18 we generated 86% of our own income and the Council’s investment made up just over 5% of our organisations £3M turnover, which is pretty impressive. Although it is an important 5%, we have reduced our reliance on Council funding significantly over the last few years meaning we are in a strong position to effectively manage this situation.
In the last four years alone, our funding from West Berkshire Council has reduced by 52% and we’ve been able to manage this reduction by increasing our activities, being better at fundraising, and generating more profit from the Kitchen and Bar. Although we need to continue running an efficient organisation, our continued growth gives us confidence that we can build a sustainable organisation for our current and future audiences and participants.
Will you increase ticket prices to cover the gap?
We only retain 23p in every £1 spent on tickets so we’d need to sell approximately 45,000 tickets to cover the gap left by the Council, which is actually impossible as we’d need to present another 112 shows a year and there are just simply not enough days in a year to do that on top of our already extensive programme. Therefore, our approach has to be to find more ways to cover the gap.
Our audiences can help us with that – so instead of eating and drinking at another venue before a show, you can eat and drink with us. That ensures any profits go back into running the Corn Exchange. Or you join one of our Membership schemes which annually raises approximately £32,000 a year. Or you donate an extra few pounds every time you book tickets or see a free outdoor show. Ultimately, the decision is left to what an individual can afford rather than raising the prices and risk reducing our audience.
As well, we work extremely hard to ensure our prices remain accessible and we’re really proud of the diverse audience we are able to attract as a result of this approach. Increasing our ticket prices might undo a lot of this work and so isn’t something we would ideally consider but if you are able to give a small donation every time you book, we keep 100% of your donation.
Will the Corn Exchange still provide local amateur companies with a discounted rate to hire the building? Local community performance groups are an extremely important part of our programme. We are really proud that in any one year up to 20% of performances can be made up of community groups and we’re going to work hard to ensure that we can keep the cost as low as possible to enable them to continue using the building. At this stage we are not expecting our community hire prices to increase beyond the 2-3% they do annually.