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Item 6A Appendix 1: Penlee House Draft Budget 2021-24 and Item 6A Appendix 2: Penlee House Reserve Position

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Item 6A Appendix 1: Penlee House Draft Budget 2021-24 and Item 6A Appendix 2: Penlee House Reserve Position 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 Cornwall 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. Page 1 of 3 Item 6(a) • 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: Page 2 of 3 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 Page 3 of 3 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
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