£440,000 in council bailouts for loss making Great Tapestry

EXCLUSIVE by OUR LOCAL GOVERNMENT EDITOR

Scottish Borders Council has had to 'subsidise' the Great Tapestry of Scotland gallery in Galashiels with £220,000 cash injections in each of the last two financial years as the five-star tourist attraction continues to receive less than half its expected visitor numbers.

New figures issued to Not Just Sheep & Rugby by the local authority show the £6.8 million tapestry building pulled in 22,303 paying customers in 2022/23 and 22,115 in 2023/24 when the building was closed for two weeks for essential maintenance.

Financial modelling created before the decision was taken to bring the tapestry panels to the Borders was based on a predicted annual attendance of 51,000 people.

Under the terms of an agreement drawn up by the project's stakeholders, Scottish Borders Council [SBC] agreed to underwrite any revenue losses sustained by the gallery's operators, the Live Borders trust which delivers sport, leisure and cultural services for the authority.

We asked: "Under the agreement reached by SBC when the tapestry project was signed off, did the council make good a financial shortfall recorded in each of those two financial years, and if so, what were the sums involved?"

In its response, the council told us: "In financial years 2022/23 and 2023/24, the Council agreed to provide additional financial support to Live Borders to assist with the significant financial pressures faced by the Trust as a result of energy inflation, the cost-of-living crisis and ongoing the recovery from the Pandemic.  

"In both years, around £220,000 of that support was directed to the Great Tapestry of Scotland’s operational deficit, arising from increased energy costs and lower than targeted visitor numbers linked to the post COVID operating environment."

Indeed, COVID may well have been a major factor which has resulted in the tapestry's recent financial woes and visitor performance. But the newly released statistics are a far cry from the estimates on which councillors sanctioned development of the project, including £3.5 million in capital funding from local taxpayers.

According to Jura Consultants, the specialists who produced the business plan based on the 51,000-a-year figure. the venture was set to lose money in each of the first five years.

However, the losses were expected to be £79,679 in year one, followed by deficits of £53,919  and £12,038. After five years, losses were expected to total £185,000 whereas the actual shortfall has already reached around £440,000 in two years.

A separate financial model devised by senior officers at Live Borders showed a loss of just £2,005 in year one, then surpluses of £23,755 and £65,633. A five-year 'profit' of £202,500 was predicted.

The real figures just released were not included in a Live Borders performance report which was among a collection of papers submitted to councillors last month when they started to consider the way ahead for the trust in light of serious financial challenges.

A page dedicated to the Great Tapestry of Scotland included the following 'key statistic': "Increased 2024 Travel Trade bookings by 307% resulting in an additional 294% of coach trade footfall".

Meanwhile, elected members were given attendance figures for a range of other facilities run by the trust. The total number of visits to all Borders museums and visitor attractions increased in 2023/24 from 87,272 to 98,324. At the same time, the Jim Clark Motor Museum in Duns enjoyed an uplift in patronage from 8,365 to 9,593.

A total of 1,416 researchers used Hawick's Heritage Hub Archive (1,157 in 2022/23) while Borders libraries had 111,512 service users, and mobile library visits totalled 28,191.

A joint statement from SBC and Live Borders following June's council meeting to discuss the way forward declared: "As with other such trusts across the country, Live Borders has experienced unprecedented challenges over the past five years, including the Covid-19 pandemic and subsequent slow recovery, massively increased utility costs and changes in customer usage trends.

"In addition to Live Borders exhausting their own financial reserves through the investment of millions of pounds into facilities and maintaining services, the Council has also supported Live Borders financially over a number of years, with additional funding over and above the annual budgeted management fee."

According to the statement, a joint transformational change programme has been progressing aimed at delivering high quality services through a financially sustainable and high performing partnership between Live Borders and the Council. This followed an independent joint review of sport, leisure and cultural services and facilities which took place during 2023 and received significant input from Borderers.

Projects within the programme include the development of detailed options appraisals and associated consultation on the future of the Council-owned buildings operated and managed by Live Borders which meet various criteria, including high repair/maintenance costs, decreasing user numbers, increased running costs and where there is the potential to relocate or co-locate services.

David Robertson, Chief Executive of Scottish Borders Council, said: “It was clear prior to the joint review that changes were required to help Live Borders get on a sustainable footing and protect the continued delivery of key services to our residents and visitors. The combination of the decisions taken today will support those aims and give us the opportunity to review which organisation is best placed to deliver various services."

And Alison Moore, chair of Live Borders, commented: “I and my fellow Trustees accept the decision by elected members to seek to change the governance of Live Borders to that of a single member trust model, and we will work with Council colleagues to ensure that this transition is orderly and takes place as quickly as possible.

“The uncertainty that has hung over the future of Live Borders has been difficult for the staff, who have continued to deliver excellent local services for Borderers through these challenging times. I pay tribute to them and offer them my continued unwavering support as we work through this period of change. It is important that any further changes are decided upon and progressed in a timely manner as we need a period of stability for Live Borders."