Covid's cruel impact on theatre's finances

 EXCLUSIVE by DOUGLAS SHEPHERD

The Board of a leading arts venue in the Scottish Borders have warned their theatre would have to be mothballed and all staff made redundant if the premises were forced to close for three months without further financial aid during the Covid-19 pandemic.

This potentially devastating scenario is outlined in the annual report and financial statements of the Eastgate Theatre (Peebles) Ltd. which has already been badly affected by the first lockdown from March 2020.

Although the set of accounts only covers the year up to March 31st 2020, the continuing Covid issues affecting Eastgate are discussed at length in the report which was written in October of last year.

In a section titled 'Looking Ahead' the annual report says: "There can be no certainty as to the future impact of Covid-19 on the company and its activities. If the UK and Scottish Governments were to strengthen restrictions on social gathering or instruct the venue to close there could be significant doubts about the company's ability to continue as a going concern.

"The Board has looked at a variety of scenarios, including admissions reducing to 50% of pre-Covid trade". That would involve perhaps opening for fewer days each week.

But the report continues: "The more severe scenario of forced closure for three months and assuming no further government financial assistance would result in the company making all staff redundant and mothballing the organisation in the hope that at some future date the venue could be reactivated.

"Our assessment is that a shorter forced closure period, perhaps up to six weeks, could be managed and several key staff maintained. But the impacts would still be severe and financial recovery would be slow".

Faced with these uncertainties the company says it is taking a range of mitigating action including the building of a new audience data base to allow efficient low cost marketing in preparation for activities restarting.

"The Board are committed to ensuring the Eastgate Theatre can continue as a viable cultural and community organisation and remain a vital part of the social and economic fabric of Peebles and Tweeddale as well as the Borders in general".

The financial review records that overall income in 2019/20 increased by over £138,000 from £653,381 to £791,625, mainly due to the receipt of grants towards the cost of upgrading the entrance, cafe, auditorium and heating system.

Income from admissions, hires, bar and cafe decreased by more than £61,000 to £334,681 mainly due to the closure of the theatre during the alterations as well as the closure from March 20th last year due to Covid-19. All of this resulted in a general fund deficit for the year of £56,399 compared to a surplus of £64,472 in 2019.

It is also reported that by October 2020 the company had benefitted from four emergency funding schemes linked to Covid and totalling £143,800. It included a £70,000 payment from the Scottish Government.

Eastgate chairman Ron Inglis writes in his chairman's overview: "Following the reopening in August 2019 after the renovation works attendance levels rose by nine per cent compared to the same period the previous year.

"However, the impact of Covid-19 since March on the Eastgate's business and the wider leisure industry has been substantial and there is no certainty about what impact the pandemic may have on the company in future. Since March no live performances or cinema screenings have been possible".

The report also reveals that Scottish Borders Council and LIVE Borders have confirmed their [financial] commitment to the Peebles venue but are proposing a reduction of three per cent reduction in the core grant for the financial year 2021/2022. Grant support from LIVE Borders is currently worth £18,273 per quarter.