Luton Culture Report to Overview and Scrunity Board
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LUTON CULTURE REPORT TO OVERVIEW AND SCRUNITY BOARD – TUESDAY 7 JUNE 2016 1. Luton Culture Business Model Since 2008 Luton Culture has undertaken a number of significant changes. From its original set up to deliver arts, libraries and museums to then changing its direction and adapting to cuts and new responsibilities (as demonstrated in model 1). Model 1: Demonstrates Luton Culture’s shift in focus in response to funding cuts and additional responsibilities Luton Culture has been continually managing change in relation to reductions to funding. There have been library and staff restructures and the Trust was asked to take on community centres. It could be said that in 2015 that Model 1 shows an organisation suffering from ‘mission creep’, that its original identity and purpose has been subsumed by taking on council services that do not align with its original purpose or organisational strength. As a result, the arts and cultural public activity and programmes have reduced significantly. 1 With an absolute commitment to do the right thing, Luton Culture has tried to manage delivering as much as it can with a lot less staff and funding. This has led to various difficulties and to resolve this, in the last 9 months, we have taken a fresh look at what our core offer is, what we do well, what needs in the community we meet to a high standard and what can we protect for the people of Luton into the long-term, as custodians. We have returned to our focus on engaging our community with high quality and meaningful arts & culture. We want to better use our key assets of Wardown Park Museum, Stockwood and the Hat Factory so that the high cost of running these complex buildings is far exceeded by the public benefit. These are our priority sites and this is where we deliver our core activity for our customers and wider community. For the Council we will also manage museum collections, deliver a Library Service Level Agreement to deliver its statutory obligations and we will ensure archive management. It is inevitable, that with our funding from LLAL reducing substantially in 8 years, that we cannot continue to deliver all that we originally set out to do. This has meant that we are stopping doing things such as managing some community centre leases, we are reducing our staff team to a ‘core’ and we are only delivering outreach activity/additional projects that are externally funded. All funds that we raise, such as the Arts Council funding, is for added-value activity that delivers our 7 priorities and aligns with our organisational vision and themes. We will be generating more external funding to do more, but our core activity shall remain. We are also adapting our working practices to be more sustainable and eco-friendly so that of our LLAL funding can be better allocated to arts and cultural engagement for the community of Luton rather bureaucracy and operations. Model 2 shows an organisation with a core offer (the square blue section) and which will take on additional projects which add value to the core offer, not drain it or put it at risk. Projects will be self- funding and will grow our audiences and our social, community, economic impact across Luton (as represented by the blue arrows). Model 2: Luton Culture core offer and project delivery model 2016-21 2 - ur ision is to be an award winning cultural rust pro iding e emplary public engagement with arts and culture. OUR THEMES OUR PRIORITIES: . Developing and delivering high quality arts . Growing more high quality opportunities & cultural programmes . Raising capital investment to improve our for people to volunteer with us . Growing and diversifying our audiences Cultural venues and enhance them as . Developing and promoting a network of and users visitor destinations Cultural Champions . Strengthening and broadening . Providing more studios and workspaces . Strengthening our team of specialists relationships with our key stakeholders for creative and cultural businesses in the . Clarifying as a team and then amplifying cultural quarter our organisational values and ethos . Opportunities for artists and creative . High profit generating commercial practitioners enterprise growth to better fund our arts . Taking a strategic approach to the way we . Inspiring and creatively engaging young and cultural programmes work with others and share benefits/risk people . Influence, lead and make a difference by . Cultural and creative skills development, applying our professional knowledge, skills career progression and professional and expertise achievements . Helping children and families improve . Integrating new technology and more literacy efficient and effective digital processes and practices . Delivering and ensuring exemplary Library . Evaluating the impact of our core, cultural, and Archive services commercial and contract functions in . Increasing access to our locally relevant delivering our priorities museum collections and heritage assets . Setting, achieving and maintaining the . Achieving national recognition for our highest quality standards across all that we significant collections do 3 In the fifth year of this business plan, we will be more independent and well known for being an innovative, creative and caring arts and cultural Trust. We will have fruitful strategic partnerships locally, nationally and internationally and we will have a large following of loyal and proud customers, partners, funders, businesses, ambassadors, staff and volunteers. 2. ’ g v c As with all charities, Luton Culture’s Board of rustees are responsible for the effective use of resources to achieve its charitable purposes. The Board currently comprises nine people who are appointed for their skills, knowledge and experience, for their passion for the charity’s work and their commitment to Luton. The Board meets quarterly and appoints relevant sub committees and task and finish groups to focus on key priorities in more detail. Its finance sub- committee also meets quarterly to monitor financial performance and ensure that suitable accounting policies exist and are applied by the Trust executive officers. The Board appoints the Chief Executive and leadership team to lead the charity day to day in the strategic direction it sets out. 3. Accountability Luton Culture is accountable to the Charity Commission, to its funders and to Luton Borough Council as the statutory body for libraries. Luton Culture is also a registered Company. The Charity Commission is the independent regulator of charities in England and Wales. It articulates both charities’ legal obligations and guidelines for good practice. It works to ensure that charities use their funding to fulfil their charitable objectives and expects them to exercise financial prudence to ensure their sustainability. Luton Culture is therefore subject to Charity Commission accounting standards and undergoes detailed scrutiny of its accounts during the annual audit. Luton Culture’s Director of Finance and Resources, a qualified accountant, is responsible for producing and submitting the annual accounts on behalf of the Board of Trustees. Luton Culture’s annual accounts up to 31 March 2016 are now completed and due to be audited by KPMG LLP over the next 2 weeks. In line with auditing best practice, KPMG were recently appointed to take over from our previous audit firm who we have worked with since 2009. Its role as auditor is to ensure that the accounts are prepared in accordance with applicable law and UK accounting standards. The annual audit provides an in-depth scrutiny from the on-site audit team to ensure that the accounts give a true and fair view. They obtain evidence to ensure that the amounts and disclosures are correct and supported by adequate records of income and expenditure. All findings are detailed in a management letter to the Board of Trustees. Once audited, the accounts are held, as a matter of public record on the Companies House website, free of charge to the public. Also a summary of its financial performance is held on the Charity Commission’s website. 4 4. Summary of Expenditure for 2015/2016 4.1 The attached table (Appendix A) is an extract from our latest set of accounts to 31 March 2016 which is subject to audit. This table is produced as notes to the accounts, and shows clearly, the running costs across our main delivery areas. These being libraries, arts, museums, community centres, grant funded projects and central costs. The central costs of Chief Executive, Finance, Administration and Marketing are then apportioned across the services on a simple expenditure basis. The figures are compared against last year’s expenditure (shown in the end column) and show reductions of £441k in the year. This was planned reductions in line with anticipated available income and has resulted in the Trust posting a small surplus of £55k during the year. It represents excellent financial results bearing in mind that the Trust has received reductions in our LLAL funding of some £2.4m (39%) over the last 3 years. 5. Modelling the next 5 years 5.1 The Trust operates a 5 year rolling financial model. This is the tool for ensuring that we operate within the anticipated resources available and which enables us to set annual operating budgets and income targets and allocate resources to our key business plan objectives. The Trust was informed in December 2015 that the LLAL/LBC funding was to be reduced by a further £1m over the next 2 financial years, £500k in 2016/17 and £500k in 2017/18. This, coupled with the development of a new business plan required the Trust to substantially review its financial model. We could not continue to spend at the same level as 2015/16 and some difficult decisions needed to be made. 5.2 The savings have been achieved by reviewing how activities are delivered. It has included reducing the number of Senior Managers from 12 to 6, saving approximately £220k.