The freehold of the De La Warr Pavilion (DLWP) was owned by the Council and leased to the DLWP Charitable Trust on a 99-year lease from May 2004.  The Trust was supported by an annual grant from the Council which was match funded by the Arts Council England (ACE).

The current funding agreement 2021-2024 was due to end in March 2024 and this provided the Council with an opportunity to consider the future funding of the DLWP, in light of the Council’s financial position.  As part of the Council’s 2023/24 budget savings, it had already been agreed that the annual £12,000 concessions grant pot, which had been static since the first funding agreement in 2003, be removed from the overall grant.

In February 2023 the DLWP was awarded £17.2m from the Levelling Up Fund (LUF), following a partnership bid with the Council, to support the redevelopment of the building. The LUF grant was capital funding and sat outside the funding agreement and could not be used to support the DLWP on a day-to-day basis. The LUF project was expected to be completed by summer 2026, during this time revenue costs would continue to need to be met. The project looked to enhance commercial opportunities and help the Trust create a new business model going forward.

Members noted that the DLWP had been severely impacted by the sharp rise in energy prices, with costs rising from £75k pre pandemic to c.£380k in 2023/24.

The Trust had successfully bid to become an ACE National Portfolio Organisation (NPO) and awarded NPO status for the 2023/26 round. The funding of £517,785 annually was confirmed in November 2022 and accepted in January 2023. The Council’s funding typically accounted for around 15% of the organisation’s annual turnover and was key to securing the ongoing ACE funding at sustained levels.

The option to reduce or remove from its budget the £536,139 annual grant funding remained open to the Council, as the LUF funded project would provide an opportunity for the Trust to develop a revised business model. Alternatively, the Council could offer a longer-term 7-year funding agreement, but this would prevent the Council from being able to respond meaningfully to post LUF business planning.

A third option, as recommended in the report, was to extend the agreement for 3-years until April 2027, to include an annual review of the maximum level of funding awarded, at the current rate of £536,139 a year. The agreement would allow the Council to review the Trust’s business plan annually and continue to set a sustainable annual funding amount.

Cabinet agreed that the DLWP played a critical role in supporting the cultural and tourism sectors in Rother and agreed that the SLA be extended. Cabinet was supportive of the third option as recommended in the report.

Cabinet agreed that the Council needed a sharper focus on the DLWP’s activities and recommended that a presentation be made at a Members’ Briefing annually and to the Overview and Scrutiny Committee on its performance and outcomes achieved, rather than its usual annual report to full Council in September.

RESOLVED: That:

1)   an extension of the De La Warr Pavilion funding agreement for 3-years until April 2027 be agreed, to include an annual review of the maximum annual cost to the Council of £536,139; and

2)   the De La Warr Pavilion report annually to a Members’ Briefing and the Overview and Scrutiny Committee on its performance and outcomes achieved.

(Councillors Field and Timpe each declared an Other Registrable Interest in this matter in so far as they were the Council’s appointed representatives on the De La Warr Pavilion (DLWP) Trust and as the matter directly related to the finances of the DLWP, in accordance with the Members’ Code of Conduct left the meeting during the consideration thereof).