Using the Fairfield Halls’ trustees’ own annual reports and accounts since 2010, together with official council documents, SEAN CREIGHTON examines what is going on at the town’s arts venue, ahead of £25m of public money being spent to refurbish it
Fairfield Halls is in crisis. At March 31, 2012, the charitable board of trustees was running a deficit of
That was up from £3,419,718 the year before.
Last year gave the trustees the chance to capitalise on Fairfield Halls’ 50th anniversary. Obviously, you can recall all the high points in the celebrations. Or maybe you can’t. Because to describe the Fairfields’ 50th birthday bash as low-key would not be an understatement.
Next January, a £25million refurbishment of Fairfield Halls, paid for by Croydon Council, will begin, with completion due in 2017. Can the Halls’ trustees and management see it through that period to see the venue enjoy its new facilities?
Staffing levels are unclear. At March 31, 2010, there were 58 full-timers and 20 part-timers. A year later the numbers were 52 and 21. By 2012, the full-time staff had been increased to 64. There were also 100 casual workers in each year. It is understood that the technical crew are mainly part-timers called in when needed. In addition there are more than 100 volunteer stewards. Without this corps of volunteers, contributing 5,000 hours a year, the wages bill would be considerably higher.
The invitation to express interest in tendering for the refurbishment’s capital works and its project management was announced in February and expressions of interest in tendering ended last week. The details on the public tender website do not give an exhaustive list of what is intended, just examples.
The trustees have a very difficult job to perform under the chairmanship of Selsdon and Ballards councillor Dudley Mead. Mead is the deputy leader of the Conservative group which controls Croydon Council and he is also responsible, among other things, for the council’s capital budget and asset management.
Several trustees are appointed by the council, the others classed as “independent” are chosen by a nominations committee which is chaired by … Dudley Mead.
The current directors are Mohammad Aslam, Anthony Roger Blin-Stoyle, Vivian Davies, David Fitze (a Conservative councillor for Fairfield ward), Timothy Godfrey (the Labour group’s spokesman on culture), Richard Plant, Fiona Kathleen Satiro (secretary), Kate Vennell and Frank Charles Widdowson. Some of these were appointed in 2012: Blin-Stoyle, Fitze and Satiro, replacing previous directors or filling vacancies.
For instance, Jon Rouse, when the paid chief executive of Croydon Council, had been a Fairfield Halls director for a brief period, but he resigned on May 20, 2011, shortly after the council decided to provide a multi-million pound grant.
Somewhat oddly, Croydon Council omits to mention Mead’s and the other elected officials’ memberships of the Fairfield Halls’ board on its website under the councillors’ lists of “interests”.
The myriad “interests” of the other Fairfield Halls board members are also worth considering.
Aslam is presumably the treasurer of the Croydon Community Police Consultative Group, who was an unsuccessful Labour candidate for Heathfield ward in 2002 and who was awarded an MBE in the 2007 New Year’s Honours for services to Croydon.
Blin-Stoyle is a digital broadcast media entrepreneur involved with Information TV Ltd.
Plant is director at the property adviser firm Stiles Harold Williams, the company which manages the Whitgift Foundation‘s multi-million pound commercial property portfolio in Croydon, and is also a member of the private sector Develop Croydon Forum. Stiles Harold Williams is also trying to find tenants for the Barclay Road annex of Croydon College.
Satiro is an employment lawyer, HR consultant and trainer running her own firm Fiona Satiro Consulting.
Kate Vennell is head of investor relations at Legal & General. Legal & General has commercial interests in both the development of the Whitgift Centre and St George’s House, what was until recently occupied so profitably by Nestlé.
It would be fair to say that despite the directors’ many interests in property and high finance, few have any professional background in the arts or culture.
As charitable trustees, the councillors’ sole responsibility is to the interests of the charity and the fulfilment of its objectives. They have a difficult job of remaining independent of the council, as Croydon Council is the landlord of the Fairfield Halls as well as the provider of its revenue and capital funds.
A development committee was set up in 2010-2011 to “expand the networks of support from both individuals and corporate bodies”. There appears to be no Committee devoted to exploring the development of cultural activities and the links with the community.
The trustees are well aware of the risk they operate under, as they explain in their annual reports for 2010-2012. Because of the income generation risks involved in every arts and entertainment contract, they agreed “not to have a cultural event staged every day”. This may not entirely explain the some times large gaps in Halls’ monthly programmes, however. This Saturday and Sunday, for instance, there are no performances listed on the Halls website for the main hall.
The Halls are vulnerable to peaks and troughs of income throughout the year, meaning “there are periods of negative cash flow”. In plain English, that means that the Fairfield Halls is often spending more than it is making.
Less than 40 per cent of ticket income is received eight weeks before an event, and around 35 per cent of ticket income in the final four weeks.
In 2010 -2011, Fairfield Halls “saw a downturn in activity … reflecting the current economy”. Croydon Council provided £1 million during the year to “ensure that the building continues to operate within the current Health and Safety regulations and provides a safe environment for customers”. Essentially, that seems to have been a council bail-out because the venue would have been unsafe to operate without the expenditure.
Despite the recession audiences totalled 209,000 for 695 varied events. Facilities were provided for local religious and ethnic groups to meet on 49 occasions and for local schools to hold 30 events.
Children’s entertainment programmes involved audiences of 36,085; comedy shows more than 13,000. “Following extensive market research of our audiences in and around Croydon, we found an overwhelming desire for real ‘theatre’ to be returned to Croydon”. No details are given on audience numbers as a result of applying the findings of this research.
The 2010-2011 net loss of £35,533 made by the trading subsidiary Fairfield (Croydon) Services, running the catering and functions operations, was covered from retained profit brought forward, leaving £98,824. The loss in 2011-2012 was £61,122. Clearly, Fairfield Halls isn’t great in the catering business, despite charging more than £4 for a small glass of wine.
The Services company did pay a service fee of £431,000 for use of the building facilities. The dormant subsidiary Fairfield (Croydon) Promotions Ltd has a book loss of £47,941.
The charity’s unrestricted reserves dropped from £267,673 in 2009-2010 to a deficit of ££280,432 at March 2012. This is below its policy to try and keep them at £273,000.
Balancing the books involves the trick of increasing income and decreasing expenditure. Although total income for the charity and its subsidiaries in 2010-2011 was £5.8 million, slightly higher than the year before, events income was down from £3.4 million to £3.2 million. Expenditure was down from £6.7 million to £6.2 million. Its carry forward was a deficit of £3.4 million (down from £4 million). Cash in hand was £369,858 (down from £1,022,714 the year before).
The following year did not see any real improvement. Total group income of £6.7 million did not cover the £7 million expenditure. The resultant deficit increased to £4.6 million by March 2012. Fairfield Halls can continue to trade because the major reason for the deficit, the size of the pension fund deficit, is subject to a plan agreed with Croydon Council.
For readers wanting to know more about the fortunes of the Halls since 2005, they can see an overview here.
Croydon Council’s cabinet – including Dudley Mead – recognised the problems the Fairfield Halls trustees faced in May 2011: “Fairfield Halls’ trading position has deteriorated each year for the last five years, with the exception of one year when the real cash flow position was offset by receipt of a one-off VAT back-payment.
“Fairfield Halls cannot continue trading next year without a significant uplift in Council financial support. To ensure that such an important part of the borough’s cultural offer is retained, it is necessary for the Council to consider grant funding, at least to the point where major remodelling of the Halls takes place and it can deliver a more sustainable business strategy.”
The charity’s principal objectives are to “encourage the interest and enthusiasm of young people and adults in a wide range of artistic performances and other supporting events”. It believes that through this activity its “public benefit” contribution is “enhancing community and social cohesion”.
The council’s assessment in May 2011 was that the trustees ought to do more. “The proposed further grant aid provides an opportunity to facilitate changes in the programming and provision of facilities to a variety of groups in the borough’s local community,” the cabinet minutes record.
“The equalities impact assessment, while indicating that the Halls meet many of the objectives of service provision across the community, draws attention to improvements which could be made to broaden its offer. Specifically, these would include the provision of community hires to specific groups, the engagement of categories of groups, and the opportunity to open the Halls to all sections of the local community. In addition it recommends the improvement of data regarding audiences’ needs. In this way, the Halls would be able to respond positively to the Council’s conditions of grant aid.”
Thomsett told the Community Services and Safety Scrutiny sub-committee meeting in January last year about “the wide variety of activity taking place in the Fairfield Halls, the maintenance challenges of this 50-year-old building and the recent imaginative refurbishment of the foyer as part of works to address health and safety issues.” He said that council funding represented 17 per cent of the establishment’s income. and he drew members’ attention to “the importance of the arts in regeneration and quoted an average estimate of £7.70 for additional spending incurred on every outing at an arts show or event and £2 coming into a local economy for every £1 of investment”.
Given this, and its legal responsibility to act independently of council policies, the trustees could consider establishing a community development committee to look at detailed ideas for improving the engagement with the community and increasing audiences.
Given the council’s statements and its use of large amounts of public money for the Fairfield Halls, it cannot possibly object.
- COMMENTARY: Failing Fairfield Halls is limping along on borrowed time
- Read Sean Creighton’s report on the community meeting on the Halls
- Inside Croydon: For comment and analysis about Croydon, from inside Croydon
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- Whoops… Council setting the agenda for blunders (insidecroydon.com)