Agenda item

The Executive Member for Wellbeing presented the recommendations in the report. Councillor Buckmaster reminded Members that the principle of the theatre project had already been agreed by Council and the recommendation was a request for additional funding due to inflation. He said that when the Council embarked on the project, they were aware of the Brexit risk but could not foresee the pandemic. The tender responses that were received back were over the original budget.

Councillor Buckmaster said that Members had received a briefing on the revised business case which had been supported by external consultants. He said that the nearest multiplex was nine miles away and younger adults were travelling to other areas so the catchment area for the theatre would be large. He said that residents in Hertford were expecting the Council to deliver to the scheme and had a duty to do so for cultural and wellbeing reasons. He acknowledged that times were hard and the world was in crisis but the council needed to look ahead into the future and make a decision on balance of what was best for the current circumstances. He urged caution that putting the theatre back to its original configuration would have considerable costs.

The Executive Member for Financial Sustainability said that funding for the project using external borrowing had already been approved by Council and there was no wish to undertake any additional external borrowing with the further interest payments and Minimum Revenue Provision that would ensue.

Councillor Williamson said that the proposal was to use internal borrowing, taking £3 million from the New Homes Bonus Fund which had been steadily accruing from the 25% of New Homes Bonus receipts which had been retained within the Priority Spend Reserve. This reserve currently stands at £8.3 million and it was set up specifically as a fund for projects as decided by Members, so this proposal constitutes a perfectly legitimate use of these funds. Furthermore, given the higher than originally anticipated income that the theatre will produce according to the latest business plan, there is the option to pay back the money into the reserve over time so it can be used again for future priorities. As internal borrowing, there were neither interest payments nor Minimum Revenue Provision to be allowed for.

Councillor Williamson explained that the balance of a maximum £1 million would be taken from contingency sums within the overall Capital Programme. This meant that controls on using these contingencies must be tightened and details on how this would be achieved were included in the report that was considered by the Executive on 8February 2022.

Councillor Williamson proposed that the two recommendations in the report be supported. Councillor Deering seconded the proposal.

Councillor Goldspink expressed her disappointment that the Liberal Democrat group had tried to submit an amendment but were told it was not allowed. She referred to the three options in the report and felt it was undemocratic that the Council were only being asked to vote on one of those options which happened to be the most expensive. Councillor Goldspink requested a vote on all three of the options in the report.

The Monitoring Officer confirmed that the Council were being asked to vote on the recommendations in the report and would not be able to hold a separate vote on the three options.

Councillor Goldspink said that she was angry that the Council were being denied a democratic vote on the options. She said that the Council had already spent £20 million on the project and were now asking for an additional £4 million. She felt that the less expensive options would be more prudent and less risky for the Council and its residents. She said that the Liberal Democrat group would support the reinstatement of the previous auditorium and just one new cinema screen as they were not satisfied the business case was robust. Councillor Goldspink questioned how the Council knew enough people would come to the theatre and cinema and said it was alarming that the risks of this project were linked to the Old River Lane project and could jeopardise all of the Council’s capital projects.

Councillor Redfern said that there was no shame in going back on the decision made previously before the country experienced the consequences of Brexit and the pandemic. She said that not everyone would use the theatre and it was unfair to expect taxpayers to contribute more money to the project which could create debt to repay over years to come.

Councillor Ruffles said he would be supporting the recommendations unless he heard anything new and compelling not to in the debate. He said that he was confident in the forecast and prediction figures for users and costs. He said he had heard from the lead project officer at the Executive meeting who had answered questions and gave detailed and upbeat answers. Councillor Ruffles said that what was proposed was rare in present times and many councils who had been less prudent would be in no position to contemplate this vision in its largest towns. He said this was something exceptional and something to be proud of.

Councillor Dumont said that they were not saying that the town did not need culture but it was the extent of what was being proposed. He said he was concerned by the rising cost of the project and thought the margins were too tight. He said there was no shame in stepping back and hard decisions had to be made in the current climate. He said culture would not be lost if the smaller option was progressed.

Councillor Bell said that her first memory of Hertford Theatre was when she performed there with her primary school in 2003 and her association with the theatre has grown. She said she fully appreciated the importance of having a cultural centre and welcomed the investment proposed. However, there had been multiple revisions over the years about the funding required and the current climate was not considered when the original project was proposed. Councillor Bell felt the Council should seriously consider the alternative, smaller option which was already a big improvement.

Councillor Buckmaster responded to the points raised. He said that theatre in its current configuration was inflexible and could only run one performance at a time. He said that external consultants had supported the business case and urged Members to vote for the proposals as recommended in the report.

Councillor Kemp said that costs had escalated due to a universal escalation in materials, not due to bad practice. He said that the option proposed by the Liberal Democrat group had not been costed or modelled. He said it was disappointing that costs had risen beyond the council’s control but the alternative proposal was likely to cause serious delays and said he supported the recommendations in the report.

Councillor Curtis said that inflationary pressures had led to the request for additional funding. He said he had concerns over the cost but any further delays would only increase prices further in the current climate.

Councillor Townsend said he supported the theatre and its cultural events. He said his concerns related to the rapidly rising costs and the unknowns in the future. He said residents would need to cut non-essentials in order to eat and heat their homes and they would rely on home entertainment systems instead of going out. He said he disagreed with the current proposal and would be abstaining from the vote.

Councillor Wilson said it was a gamble to predict what would happen to the entertainment industry in thirty years. He said it was astounding to make that gamble and base the budget on these predictions.

Councillor Alder said the Council needed to grasp the opportunity to give its residents hope that the future would be better. She felt the Council should continue with the project with the additional funding and get people through the doors. She said that the Council should have faith in its own decisions.

Councillor Dumont clarified that the Liberal Democrats were not saying they do not want a theatre but they were questioning the scale of it.

Councillor Buckmaster said he understood the reservations but a majority of the theatre would be available for live performances which had been going on for thousands of years. He said Hertford Theatre had traditionally offered good value for money and would be a good local alternative to the West End.

Councillor Deering said the Council had committed to the project and the £3 million from the New Homes Bonus was a fund provided by central government and was not attributable to council tax payers. He said that the Council had employed a raft of external experts and the last thing the Council should be doing was to delay and slow the project down. He felt the Council should show leadership and deliver the project for the benefit of its residents.

Councillor Williamson said the theatre was subsidised by a significant degree and the proposed project would turn a profit to support council services. He felt it was the right thing to do and was comfortable with the funding arrangements as the Executive Member for Financial Sustainability.

After being requested by six Members of the Liberal Democrat group, a recorded vote was taken on the recommendations in the report, the result being:

FOR

Councillors Alder, Bolton, Buckmaster, Bull, Crystall, Curtis, Deering, Devonshire, Drake, Frecknall, Goodeve, Haysey, Kaye, Kemp, Newton, Page, Pope, Reed, Rowley, Ruffles, Rutland-Barsby, Snowdon, Stowe, Symonds, Ward-Booth, Williamson

AGAINST

Councillors Dumont, Goldspink, Wilson

ABSTAIN

Councillors Beckett, Bell, Brady, Crofton, Redfern, Townsend

For: 26
Against: 3
Abstain: 6

RESOLVED – That (A) the increase in the Hertford Theatre capital scheme budget by £4 million for the delivery of the Hertford Theatre Growth and Legacy Project, of which £3 million will be funded Earmarked Reserves, and up to £1million in additional borrowing from the capital programme contingency be approved.

(B)        Any surplus receipts over and above those originally forecast and built in to the Medium Term Financial Plan be used to repay the funding from Earmarked Reserves and to contribute to future savings requirements within the Medium Term Financial Plan, those amounts to be determined by the prevailing need to make savings and the priorities of Council at the time be approved.