Item 6(a)

PENLEE HOUSE COMMITTEE - 23 NOVEMBER 2020

REPORT FOR DECISION

REVIEW OF PENLEE HOUSE DRAFT BUDGET 2021-22 AND FORECAST BUDGET TO 2023-24

Recommendation:

That the Penlee House Committee recommends this draft budget and forecast budgets to the Finance & General Purposes Committee. Background: This paper is to be read in conjunction with Item 6a Appendix 1: Penlee House draft budget 2021-24 and Item 6a Appendix 2: Penlee House Reserve Position

Income

It is more complex than usual to make predictions about the year ahead, as Covid-19 has impacted everything that we do.

Members will also note that from 2022, two major sources of regular funding: the Council Agency Fee and the NPO funding from Arts Council England (via Cornwall Museums Partnership) will cease.

• We have based visitor numbers on 2019 numbers for 2021-22. This may be ambitious given that Covid restrictions may still be in place next year. However, 2020 does not give us enough meaningful data to base our predictions on at this stage. Admission fee increases were discussed at the Penlee House Committee meeting on 28 September and it was decided not to increase admission charges. • We have budgeted for a 2.5% increase on visitor numbers year on year from 2022-23. • We have based retail income on 2019 levels and budgeted for a 5% increase year on year, again, taking into account the possible impacts of Covid and restrictions on visitors. However, in summer 2021, we have budgeted an additional £10,000 income from the sale of a book to accompany the Laura Knight exhibition. • Arts Council NPO funding (received from Cornwall Museums Partnership) ends in March 2022 although they have indicated that this date may be extended and there may be additional funding, but we have no details of this. This means that from April 2022, the income for audience engagement and learning work (and apprenticeships) will decrease significantly • The Cornwall Council agency fee ends in March 2022, to compensate for this, money is being moved from reserves from the Agency Buffer fund.

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• We have assumed that the increase in visitor numbers will hopefully be reflected in café franchise income, which has been increased by 5% • Grant income appears as zero – this does not mean that we do not expect any grant income, but these income lines are a mechanism for accepting successful funding bids. Funding bids will align with the objectives of the strategic plan.

Expenditure

We have been mindful to make cost savings wherever possible in the budgets looking ahead and have made the following considerations. • Where appropriate, 2% inflation has been added to expenditure lines • Salary costs are based on current staffing levels and include statutory contributions as well as an allowance for the annual Pension Deficit Contribution and predicted annual increments. • Central admin is no longer recorded separately in any of the Council budgets as it is a given that the support services team provide HR, finance, administrative and other support to all service areas. Removal of this line also provides a clearer picture of salary and related costs. • Staff travel has been set lower for 2021-22 because of the impact of Covid, and this will be reviewed for subsequent years • The grant-funded post (apprenticeship) and training for this post was NPO funded, which ends in 2022 • The telephone system has now been successfully changed to a new provider which has reduced the overall spending on phones • The broadband has changed to a new provider – reducing costs • Community educational activities are set at £2,000 per year. However, due to NPO investment and match funding, the actual amount spent on educational activities over the last four years has been in the region of £14,500 (made up of £7,500 funding from Cornwall Museums Partnership and £5000 in match funding that is fundraised). • We have reduced the exhibition line in 2021-22 by £8,000 by postponing the John Tunnard exhibition. • Following Council adopting the Climate Action Plan we have switched to renewable energy sources. This will have an impact on expenditure with current renewable sources being around 2p per Kw/h more. • We have increased costs for cleaning materials due to the impact of Covid. • We are keeping marketing spend low, but will review this as we go forwards.

Funds/Reserves

See Item 6a_Appendix 2_Penlee House Reserve Position for the reserves position for the current financial year. Looking ahead we propose the following recommendations for the reserves:

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Item 6(a)

• The Penlee House Fab/Plant reserve will reduce to £27,277.72 • We propose continuing to put £10,000 into the building reserve each year, as the building ages. • We propose putting £10,000 into the exhibitions fund whilst we still have the Agency fee from Cornwall Council. • We propose not to add to the Agency Buffer fund next year in order to keep expenditure down. We propose to use the amount currently standing in that reserve to offset the impact of the loss of the agency fee in the financial years 2022-23 and 2023-24. This is shown as ‘income from reserves’ in these years. We continue to work on ways to mitigate the loss of the agency fee.

Anna Renton Helen Wilson-Prowse Director of Penlee House Support Services Manager/ Responsible Finance Officer

23 November 2020

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Penlee House Committee - Draft Budget 2021/22 Forecast Budgets 2022/23 to 2023/24

2019/20 2020/21 2020/21 2020/21 2020/21 2021/22 2022/23 2023/24 Future Budget Notes Actual Approved Actual Exp/Inc Revised Budget Draft Forecast Forecast Exp/Inc Budget to 31.10.19 Budget - Covid Notes Budget Budget Budget £ £ £ £ £ £ £ Income

Adjustment made by Cornwall Museums 200 Exhibitions Grant 1,000 0 0 10,000 Partnerships 10,000 0 0 205 Shop Revised due to Covid 205/1 Admission Charges 65,256 97,290 22,599 40,105 closure 79,380 81,365 83,400 Revised due to Covid Laura Knight publication sales in 205/2 Sale of Books & Non VAT Sales 30,796 46,500 5,958 12,757 closure 39,376 30,845 32,351 2021/22 Revised due to Covid 205/3 Sale of Vatable Merchandise 35,820 36,800 14,775 12,757 closure 37,000 38,850 40,792 205/4 Image Licensing Fees 450 200 123 200 450 480 504 Assumes bookings 205/5 Education Workshop Charges 0 300 0 150 normal from Jan 21 300 300 300 205 Total 132,321 181,090 43,454 65,969 156,506 151,840 157,347 210 Education 210/1 Education Development Grants (match) 10,095 5,000 0 5,000 5,000 0 0 210/2 Educ. Dev. Grants - NPO 7,667 5,000 0 5,000 5,000 0 0 210 Total 17,762 10,000 0 10,000 10,000 0 0 215 Agency Fee - Cornwall Council 49,527 50,420 50,418 50,420 51,330 0 0 220 Friends Administration 2,768 2,690 0 2,690 Invoiced in early 2021 2,740 2,800 2,800 235 The Orangery To be confirmed at 2020/21 revised amount agreed at 235/1 Orangery Franchise 19,669 24,850 9,893 12,000 Council 16/11/20 23,911 25,107 26,362 Full Council 16.11.20 Based on figures from 235/2 Energy Costs 4,440 4,370 1,082 3,711 2019 July-March 4,440 4,661 4,894

235/3 Waste Disposal 231 0 0 0 0 0 Orangery pay own waste contract 235 Total 24,339 29,220 10,974 15,711 28,351 29,768 31,256 £10,930 from General Funds - Council resolution & CMP adjustment - 10K to line 245 Cornwall Museums Partnership 15,935 32,450 21,860 23,718 200 19,431 0 0 250 Commission on Artist Sales 1,447 1,640 0 0 Event cancelled 1,200 1,260 1,323 290 Grants 8,343 Laura Knight exhibition 290/1 Capital Build Grants 0 0 0 0 290/2 Acquisition Capital Grants 0 0 0 0 290/3 Tesco Bags for Life 0 0 0 0Projects have finished 290/4 HLF Grant - Luminaries Exhibition -271 0 0 0 0 0Projects have finished 290 Total -271 0 0 8,343 0 0 0 295 Community Toilets - L&A recharge 1,000 1,000 0 1,000 1,000 1,000 1,000

299 Miscellaneous 798 400 600 900 Apprentice payment 400 400 400 From Agency buffer fund reserve to From Coach House offset the loss of Agency fee from TBC New CodeIncome from Reserves 1,250 reserve see line 2800/1 0 20,485 20,485 Cornwall Council Total Income 246,628 308,910 127,307 190,001 280,957 207,552 214,611 Penlee House Committee - Draft Budget 2021/22 Forecast Budgets 2022/23 to 2023/24

Expenditure Combined to have one salary line rather than split out central admin. Assumes current staffing position All salary costs combined remains the same with the & updated to reflect exception on Apprentice post 2000 Penlee House Employee costs 255,646 259,560 160,936 277,160 iincrements 268,465 263,023 267,155 finishing end 2021/2022. Rolled back into salary 2005 Central Admin 17,351 17,600 0 costs 0 0 0 2010 Staff Travelling 1,078 1,990 500 1,500 1,992 1,992 2015 Recruitment 500 500 250 500 500 500 2018 Training for Grant Funded post 195 1,000 1,000 1,000 0 0 To reflect delays to 2021 Telephone 3,227 1,830 1,558 2,200 switching 1,653 1,653 1,416 2022 Broadband 817 1,200 409 1,200 600 600 600 Mailing done & 2 more 2025 Postage (office) 644 690 35 300 due 720 720 756 Updated to reflect actual 2030 Photocopier 4,201 3,770 1,514 3,050 usage 4,200 4,200 4,320 2035 Office Consumables 824 1,200 170 700 Reduction by 5 months 1,200 1,200 1,200

Future years to be reviewed when 2141 Educational Development 0 funding landscape is clearer Assuming no change at present as repurposing 2141/1 Community educational activities (PZ Contribution) 1,972 2,000 616 2,000 to digital 2,000 2,000 2,000 2141/2 Other grant funded projects 6,101 0 0 0

Agreed £250 roll forward 2141/2/1 Health & Wellbeing 0 2,500 2,750 Council 26.05.20 2,500 0 0

Agreed £2950 roll 2141/2/2Communities in Residence 0 2,500 1,742 5,450 forward Council 26.05.20 2,500 0 0 2141/3 NPO Funded projects 7,813 0 0 0 2141/3/1 Health & Wellbeing 0 2,500 1,550 2,500 2,500 0 0 2141/3/2Communities in Residence 0 2,500 983 2,500 2,500 0 0 2141/3/3 Children & Young People 0 2,500 1,500 2,500 2,500 0 0

Agreed £1433 roll 2141/3/4 Citizen Curators 0 2,050 278 3,483 forward Council 26.05.20 0 0 0 2141 Total 15,886 16,550 6,669.15 21,183 14,500 2,000 2,000 2045 Merchandise for Resale New budget codes from 2045/1 Merchandise for Resale 32,700 46,460 11,608 27,101 2021 28,600 29,950 31,377 New budget codes from 2021 New budget codes from 2045/2 PDQ Charges 2021 1,600 1,700 1,800 New budget codes from 2021 New budget codes from 2045/3 Consumables and till 2021 800 900 1,000 New budget codes from 2021 Assumed 7 months 2045 Total 32,700 46,460 11,608 27,101 expenditure 31,000 32,550 34,177 Penlee House Committee - Draft Budget 2021/22 Forecast Budgets 2022/23 to 2023/24

Assumed 7 months expenditure + £1036.70 roll forward from General Funds, Council 2050 Advertising 7,343 8,830 3,398 6,036 26.05.2020 8,980 9,130 9,586

Revised costs now programme is known. Transport and other costs for new exhibition programme + £1231 roll 2055 Council Run Exhibitions 36,769 37,880 7,595 23,231 forward TC 26.05.2020 30,520 39,170 41,129 raised as stewards 2060 Volunteer Stewards 2,633 3,050 374 1,900 needed back sooner 3,100 3,150 3,308 2065 Membership Subscription Fees 998 1,000 672 1,000 1,020 1,040 1,092 2070 Insurance 14,244 15,740 9,109 15,740 16,010 16,280 16,610 2075 Rates - House 30,996 31,530 22,041 31,530 32,070 32,620 33,264 2081 Electricity 25,591 29,220 13,026 29,220 29,720 30,230 31,742 2082 Gas 9,638 9,940 5,574 9,940 10,110 10,280 10,794 2085 Water Rates 3,349 4,220 545 3,209 Slight change to usage 4,290 4,360 4,578 2090 Coach House Most usage in winter 2090/1 Coach House Electricity 693 1,120 979 1,120 months 1,140 1,164 1,222 2090/2 Coach House Rates 920 940 673 940 960 980 1,004 Assuming some change due to closure - more 2090/3 Coach House Water Rates 341 250 69 200 info required 260 260 273 2090 Total 1,954 2,310 1,721 2,260 2,360 2,404 2,499 2095 Museum Exhibits - Maint. & Conservation 116 500 250 reduced by 50% 500 500 500 2100 Museum Maintenance 0 2100/1 Fittings 5,137 500 227 227 Covid signage 500 500 500 CMP Adjustment - £15,000 misattributed to 2100/2 Maintenance 25,618 42,480 9,553 27,480 Penlee House 27,950 28,430 29,852

May need to change depending on 2100/3 IT Provision 840 1,000 905 1,000 6,000 6,000 6,000 Council decision re IT upgrade Reduced rate of £300 for 2100/4 Cleaning Contract 8,216 8,360 3,113 6,670 3 months 8,500 8,640 9,072

Additional materials needed to meet Covid 2100/5 Cleaning Materials/Hygiene contract 718 830 552 1,130 risk assessment needs 1,020 1,020 1,020 Assuming reduced costs 2100/6 Penlee House Waste Disposal 5,409 5,290 2,305 3,445 for 5 months 0 0 0 2100/7 Website Maintenance 0 0 0 0 400 400 400 2100 Total 45,939 58,460 16,655 39,952 44,370 44,990 46,844 Possible expenditure on repair for broken 2105 Orangery Equip 2,157 1,500 180 500 equipment 1,500 1,500 1,500 2110 Cornwall Museums Partnership 5,175 1,000 0 CMP Adjustment 0 0 0 2120 Secure Banking Service 1,562 1,600 957 1,600 1,728 1,752 1,788 2200 Grant Funded Projects Penlee House Committee - Draft Budget 2021/22 Forecast Budgets 2022/23 to 2023/24

2200/1 HLF - Luminaries Project 0 0 0 0 0 0 0 Total 0 0 0 0 0 0 0 2800 Capital Projects 0 0 0 2800/1 Coach House Refurbishment 750 0 1,250 0 0 0 0 2800 Total 750 0 1,250 0 0 0 0 2995 Funds/Earmarked Reserves No in year addition to 2995/1 Conservation Fund 500 reserve 0 0 0 No in year addition to 2995/2 Penlee House Building Fund 10,000 reserve 10,000 10,000 10,000 2995/3 Council Run Exhibition Fund 0 10,000 0 0 2995/4 Coach House Refurbishment Fund 0 0 0 0 2995/5 Agency Fee Buffer Fund 30,970 30,970 0 0 0 2995 Total 0 41,470 0 30,970 20,000 10,000 10,000 2996 Funds - Capital 2996/1 Acquisition Fund 0 0 0 0 0 2996 Total 0 0 0 0 0 0 0 2999 Miscellaneous 0 1,000 0 1,000 0 0 0 Total Expenditure 522,285 601,600 265,995 532,982 531,616 515,844 529,350

Net Expenditure 275,657 292,690 138,688 342,981 250,659 308,292 314,739 Penlee House Reserve Position 2020/21 Adopted Current Value Planned Movements Amount Remaining Reserve Start Value Movements at end of 2020/21

Acquisition Fund £8,930.00 £ - £8,930.00 £0.00 £8,930.00

Conservation Fund £2,426.00 £ - £2,426.00 £0.00 £2,426.00

Penlee House £46,257.00£ - £46,257.00 IT Infrastructure £12,005.28 £27,277.72 Fabric/Plant Fund Investment Storage shelving £6,974.00 Total £18,979.28

Exhibition Council £20,685.38£ - £20,685.38 £20,685.38 Run Fund

Coach House £ 18,500.00 -£ 1,250.00 £17,250.00 Planning permission to £17,250.00 Refurbishment Fund move project forward

Agency Buffer Fee£ 10,000.00 £ 30,970.00 £40,970.00 Reserve to be used in £40,970.00 22/23 & 23/24 to replace lost income

Total £136,518.38 £117,539.10 Item 7(a)

PENLEE HOUSE COMMITTEE – 23 NOVEMBER 2020

REPORT FOR INFORMATION PENLEE HOUSE DIRECTOR’S REPORT

(i) Covid-19 closure

Penlee House has been closed since 5 November 2020 in line with government guidelines relating to the second England lockdown. We are hopeful to be able to reopen as soon as the restrictions are lifted.

This closure has had an impact on our exhibition programme, the changes are reflected in section (ii) below. Staff have used the closure time to: • Produce 100 art boxes to distribute to children in partnership with Foodbank • Rearrange the exhibition programme • Create an online catalogue for the shop to enable mail order shopping • Undertake training • Produce and signpost to online content to encourage creativity and grow the online audience (ii) Exhibitions

The current and next exhibitions have all been impacted by the second lockdown. We have been able to extend School Interiors , which means that the Treasures from the Collection exhibition has been cancelled. The extension of Interiors will help to save transportation costs. 5 October to 23 January (extended): Clive Carter: A Native Cornish Artist – an exhibition in the Social History gallery of this artist’s paintings of Cornwall’s industrial heritage Reopening to 23 January: Tony Giles in West Cornwall – an exhibition in Gallery 5 of this artist’s colourful paintings of the industrial landscape of West Reopening to 9 January: Newlyn School Interiors – this popular exhibition has been extended until 9 January, thanks to the kind agreement of the lenders involved. This seemed the most sensible option given the restrictions imposed by the lockdown. 30 Jan – 17 April 2021: Discovering Anchor Studio: An artist’s haven in Newlyn

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Item 7(a)

The Grade II* listed Anchor Studio was used for over 60 years by Stanhope Forbes and then by John Wells, a principal St Ives Modernist. Forbes and his wife Elizabeth ran their school of painting from Anchor, attracting many students who became distinguished artists. The studio is in the process of refurbishment, and the exhibition will tell the story of this.

28 April - 11 September: Laura Knight: a celebration This is the exhibition that has been postponed from 2020. The exhibition will feature stunning landscapes, portraits and three of her spectacular wartime commissions. After this, we were due to have an exhibition about the surrealist John Tunnard, but to save costs, we have decided not to run this exhibition in 2021. We will decide what to have in its place – possibly a photographic exhibition.

(iii) Education

Before the lockdown, the Education & Outreach Officer was able to undertake some outreach sessions in schools. Working in a Covid-safe way, she was able to take some of our schools workshops (which would usually happen at the Gallery) out to local schools. The fun packs that we gave out over the summer proved popular with the children who used them in the galleries and we continued to offer them over the half term holiday. The fun pack idea has been expanded to become art activity packs, 100 of which have been produced to be distributed to local children via the Food Bank in Penzance. These were produced using some of the NPO funding.

(iv) Visitor experience

Prior to closure we were having a successful October. “A must-see when in Penzance, Penlee showcases Newlyn School artists in a delightful setting.” “A very nice little gallery and museum set in nice grounds. A superb set of art from the 'Newlyn School', many of which show local scenes. A nice collection of artefacts from the area as well giving an overview of local history. The museum has a good looking cafe and is set in a nice park.” (v) Funding applications The funding application to the Arts Council’s Culture Recovery Fund was unsuccessful. The expression of interest to the Towns Fund is under consideration. We are working with other cultural partners in the town to emphasise the importance of

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Item 7(a)

Penzance as a centre of arts and culture, and the benefits of investing in cultural projects. (v) Buildings and IT

The broadband and phone systems have now both successfully changed, which will result in cost savings. The IT infrastructure investment was approved on 16 November by Full Council and this will lead to vast improvements for Penlee House’s IT system. The new shelving, also agreed by Full Council on 16 November may be slightly delayed in construction and installation due to the pandemic and the impact the second lockdown has had on production.

(vi) Income and visitor numbers September and October

Week Visitor Admissions (inc. VAT) Shop spend (inc. VAT) Weekly total (£) % total beginning numbers (£) (£) diff. 2020 vs 2019

2019 2020 2019 2020 2019 2020 2019 2020

31/08/20 1082 314 £3491 £1,473 £3,495.39 £1,498.86 £6,986.39 £2,971.86 -57.43% 07/09/20 427 406 £446.50 £2,112 £2,091.89 £1,592.02 £2,539.39 £3,704.02 +31.44%

14/09/20 782 410 £2,166 £2,223 £2,283.98 £2,186.58 £4,449.98 £4,409.23 -32.98%

21/09/20 836 397 £2,541.10 £2,046 £2,192.13 £1,879.20 £4,733.23 £3,925.20 -17.07%

28/09/20 699 483 £1,714.30 £2,580 £1,717.45 £2,459.79 £3,431.75 £5,039.79 +46.86%

September 3826 2010 £10,358.90 £10,434 £11,780.84 £9,616.45 £22,140.74 £20,050.10 -9.44% totals 05/10/20 720 274 £1,988.60 £1,389 £1,641.58 £1,416.05 £3,630.18 £2,805.05 -22.73%

12/10/20 528 350 £1,403 £1,833 £1,354.76 £1,502.39 £2,757.76 £3,335.39 +20.95%

19/10/20 439 365 £1,268.60 £1,575 £1,415.79 £1,657.65 £2,684.39 £3,232.65 +20.42%

26/10/20 546 396 £1,658 £1,473 £1,314.23 £1,870.32 £2,792.23 £3,343.32 +19.74%

October 2233 1385 £6,318.20 £6,270 £5,726.36 £6,446.41 £11,864.56 £12,716.41 +7.18% totals Cumulative 20,350 5,322 £58,128.80 £24,373.50 £54,856.52 £24,339.66 £112,985.32 £48,713.16 -56.89% YTD (2019 from 1/4/19)

Visitor numbers for September and October are at about 56% of visitor numbers in the same months of 2019.

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Despite lower visitor numbers, however, the overall spend per head has increased. This is especially pleasing in the shop, where over the course of September and October 2019, spend per head was £2.89, whereas in September and October 2020, this has increased to £4.73, a 63.6% increase. This is a very pleasing trend and hopefully one that we will see continue when we reopen from lockdown. In the meantime, the shop is able to take orders over the phone.

Anna Renton Director, Penlee House Gallery & Museum 23 November 2020

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