A5 Executive Decision Report

Decision maker(s) and date of Cabinet – 25 May 2017 Cabinet meeting, Cabinet Date of decision - 25 May 2017 Member meeting or (in the case of individual Cabinet Member Forward Plan ref: 05034/17/K/AB decisions) the earliest date the decision will be taken

Report title (decision subject) LEIGHTON HOUSE REFURBISHMENT PROJECT

Reporting officer Daniel Robbins, Senior Curator, Leighton House

Key decision No

Access to information Public (Part A) with Confidential/Exempt (Part B) classification Appendix Information relating to the financial or business affairs of any particular person (including the authority holding that information)

1. EXECUTIVE SUMMARY 1.1 Over the past five months, a full review has been made of the Phase 3 refurbishment proposals. This has resulted in significant improvements to the scheme, including better circulation through the building, a reduction in the number of internal level changes and a consequent removal of ramps and lifts. This has also led to a reduction in the impact of the proposals on the historic fabric of the building.

1.2 At the same time, a reconsideration of the project brief has determined that the existing proposals did not provide sufficient space to retain the full reserve collections on site nor did they allow for satisfactory office accommodation of all staff within the building. As part of the review, the appointed architects (BDP) have proposed an enhanced option that satisfies both these requirements and which, as an additional benefit, releases space which can be dedicated to the support of education and outreach work for the museum.

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1.3 This enhanced scheme, which answers the brief in full, has gained the support of the project’s two key partners: the Heritage Lottery Fund and the Friends of Leighton House. Under these proposals, Leighton House will gain the complete set of facilities that will allow it to operate and flourish into the future. This enhanced scheme also means that should governance arrangements change, the museum will already have the necessary facilities, including staff accommodation and collections storage, to stand alone and not be dependent on other council or paid- for premises.

1.4 In July 2016 the award of a Development Grant by the Heritage Lottery Fund was reported to Cabinet, together with an update on the estimated total project costs. A detailed financial breakdown of the enhanced proposal now under consideration is outlined in the confidential Part B of this report.

1.5 Under HLF rules, the Development Phase of the project is a maximum of 2 years long. This means that the latest date for submission of the Round 2 application is June 2018. By this date, 90% of the total match funding must be in place.

1.6 The Friends of Leighton House have made a positive and highly successful start to the fundraising campaign. While it is recognised that the Council’s allocation of capital funding remains confidential, in this instance, applications to Trusts and Foundations and the further application to the Heritage Lottery Fund for the delivery phase of the project will require the full disclosure of the level of the Council’s financial contribution to the project. Equally, negotiations with private donors are unlikely to be successful unless the level of support can be disclosed. Once the information sharing and consultation process begins, the total cost of the project and how it is funded will be of interest to the press and media and disclosure of this information will be requested.

1.7 This report requests the Council to consider the enhanced scope of works and to approve the budget contribution stated in confidential Part B of this report.

1.8 The LHM Business Plan is currently being finalised, and considers the revenue implications of an enhanced Museum. Depending on which option is implemented, Phase 3 works could, in the longer term, enable the Council to reduce the current direct subsidy from £0.140m per annum to £0.070m per annum and even potentially eliminate the subsidy. These figures are based on (i) a basic income scenario and (ii) a higher income scenario.

2. RECOMMENDATIONS

2.1 Cabinet is recommended to:

(i) agree to proceed with the enhanced project rather than the project scope of works advised in 2016 and that the Council increases its contribution, and consequently updates its Capital Programme, accordingly as set out in confidential Part B of this report.

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(ii) agree that the level of Council contribution can be disclosed as part of applications to Trusts and Foundations for financial support of the project and in negotiation with private donors and in response to press and media enquiries on the basis that the project has levered in half of the total cost from external sources.

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3. REASONS FOR DECISION

3.1 Following the completion of the project review, BDP (the project appointed architects), and the rest of the design team need clear instruction as to the favoured scheme and how to proceed. An early decision will allow for the efficient running of the project and potential savings in inflationary costs.

3.2 The Friends of LHM have also requested an early decision to allow the longest possible time to raise an increased target amount.

3.3 Following the completion of the Leighton House Museum business plan, the enhanced scope of works is required to ensure the museum has the facilities to achieve its future objectives.

4. BACKGROUND

4.1 The case for Phase 3 has always been based around three objectives. Firstly, the restoration of the building and the preservation of the historic fabric for future generations. Secondly, the creation of the facilities and infrastructure required to support the full range of the museum’s activities and thirdly, the removal of existing barriers to maximising income generation.

4.2 The enhanced scheme goes further than these previous objectives. Staff accommodation is currently within the Perrin Wing in a single space that was fitted out as an office on a temporary basis to facilitate the restoration of the historic house in 2008-10. Under the existing proposals, the office space will become the point of entry for the public, and staff would relocate to the lower ground floor of the historic house, where the offices were previously. However, the HLF delivery phase of the project includes the appointment of two additional members of staff together with interns and apprentices. A bench-marking exercise carried out as part of the Business Plan has also suggested the museum is under-staffed and that an increase in staff numbers is desirable over time. Therefore, there is a need to either create additional office accommodation or to move a proportion of the staff off site. From an operational perspective, the retention of all staff on site is considered essential. The enhanced proposal therefore includes the creation of a new staff office as an insertion into the space above the existing temporary exhibition gallery in the Perrin Wing. This will link across to the top floor of the historic house where two further office spaces could be created. In total, 14 staff could be accommodated at this level.

4.3 The enhanced scheme also resolves the issues of collections storage. Currently the reserve collection is stored partly on site and partly off-site in commercial storage. The existing store is not fit for purpose and as part of the 1950’s additions to the building will be removed entirely. The enhanced scheme proposes the extension of the new lower ground floor out beneath the pathway and garden on the north side of the house to accommodate purpose-built collections storage which will have the required environmental conditions. Allowing for a more sizeable store also allows for some ‘future-proofing’ against the possible growth of the collection

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through donations and bequests. Conversations are on-going with a collector who is currently considering the future of their collection of some 1,000 paintings, prints and drawings depicting artists and their studios through history. An ability to accommodate such a collection on-site is likely to be a prerequisite of any agreement to donate or lend.

4.4 With staff accommodated on a new floor above the exhibition gallery and the collections stored in the new lower ground floor extension, the existing basement of the historic house can be given over to support education work. With the support of the Friends of Leighton House, over recent months a programme of education and outreach work has re-started. While the museum has always offered learning opportunities, these have become fragmented in the absence of a dedicated Education Officer. A pilot programme is currently being implemented and a bid to the John Lyons Foundation is being prepared which it is hoped will supply core funding over a three-year period to then dovetail with the delivery of the HLF Activity Plan as part of the delivery phase of the project. With class sizes of up to 30, the pilot project has identified the lack of facilities to support this work with no-where to put coats and bags, inadequate toilets and no space where food can be consumed. These issues will be resolved by the development of facilities in the existing lower ground. These spaces will connect at lower ground floor level to the new basement containing the reserve collection and drawings gallery, enabling school groups to access and use this material with minimal impact on the general visitor flow and facilities.

4.5 The condition of the ‘Perrin Wing’ at the east end of the building (the part that Phase 3 addresses) continues to deteriorate. Recent surveys have determined the poor condition of the original ironwork beneath the balcony facing onto the garden. There is extensive evidence of damp within this part of the building. Although in use as offices, there is no permanent heating provision and the electrical wiring was installed as a temporary fix in 2008. It is estimated, through consultation with Amey, that in excess of £1m is required to be invested in this part of the building to bring it up to a satisfactory condition.

4.6 Since the museum reopened following the Phase 2 restoration, it has been busier than ever before and particularly so since a series of exhibitions were initiated in 2014-15. 62,000 visitors came in 2016-17, almost certainly the largest number in the history of the house, with 31,000 attending between November 2016 and March 2017 to view the Flaming June exhibition.

Year Visitors Public Events Commercial Total Events

2013-14 31,219 3770 3622 38,611

2014-15 48,623 2912 4805 56,340

2015-16 34,534 2676 5574 42,784

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2016-17 55,476 2614 3622 62,219

These figures confirm that Leighton House is the third most visited historic house museum in after Sir John Soane’s Museum and the Gallery, both of which are free and both of which have completed major refurbishment projects over recent years equivalent to the Phase 3 project. The favoured Phase 3 scheme will enhance the museum’s capacity to deliver world class, ambitious exhibitions.

4.7 Present visitor numbers underline the total inadequacy of the basic visitor facilities available. There is no disabled access to any part of the building. The reception space, combining ticket sales, cloakroom and shop is small and easily becomes congested with missed sales opportunities and a significant security risk as staff are unable to monitor who is entering and leaving the building. The house retains a single gents’ and single ladies’ lavatory only. Staff recently encountered a mother changing her baby on the floor outside the ladies’ toilet.

4.8 The forthcoming exhibition Alma-Tadema: At Home in Antiquity drew 158,000 visitors to the first venue, the Fries Museum in the Netherlands and is averaging 4,000 visitors a week at the second venue, the Belvedere, Vienna. Opening in July at Leighton House, the shortcomings of the visitor facilities and the pressure that is placed on the historic fabric as a result will be more evident than ever. At the Fries Museum, the sale of catalogues and merchandise generated almost €0.500m. At Leighton House, this potential will inevitably be compromised by the lack of space and small retail facility available.

4.9 In 2016/17 a total of 132 evening events were held at the museum, more than 1 in every 3 useable evenings (events do not take place on a Sunday evening). Of these, 82 were commercial hires and 37 of these were catered. The facilities for catering are inadequate and present a risk to the fabric of the building and to the safe operation of these events. Both commercial events and the 50 public events held in the house are using the same limited spaces and accelerate wear and tear and risk to the fabric in general. The existing proposals will ease pressures on the house, creating a space where caterers can safely operate and minimising noise and nuisance to neighbouring properties. The proposals will also create a new space suitable for community and resident’s meetings and which can also be hired for receptions in conjunction with the garden. The enhanced proposals create further rooms for potential meeting hire in the existing lower ground floor.

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5. PHASE 3 - OPTIONS CONSIDERED

5.1 Option 1 - Do Nothing

This option would in the short term entail repayment of the HLF Lottery development funds of £0.337m and the continuing ongoing direct subsidy of £0.140m p.a. Urgent works in the region of £1m would also be required to keep the building maintained to a minimum standard.

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5.2 Option 2 - the original Budget Compliant Option

Carry out a scheme which can be delivered for the budget indicated in July 2016. This option provides a stronger base to improve LHM’s longer term financial viability.

Key features of this option include:

• Increase in visitor numbers by 38%, number of events held by 89% and private hires by 38%. • Increase in commercial income from £0.423m to £0.567m p.a. • Increase in external fundraised income from £0.055m to £0.250m p.a. and • Increase in staff costs from £0.391m to £0.511m p.a.

The additional space provided in this option is however, insufficient to house the entire collection and does not fully provide for the staff accommodation. LHM would therefore need to budget for additional space with an estimated annual cost of approximately £0.109m p.a.

Overall, based on a low income model scenario, the Council’s annual subsidy would increase from £0.140m p.a. in 2017/18 to £0.219m in 2026/27.

5.3 Option 3 – Enhanced scheme

This option provides for an enhanced offer through expanded space allowing for office accommodation, storage space for the full reserve collection and improved facility for education. Key features of this option are as set out above in Para 4.3, with the exception of the following:

• The additional space provided in this option would be sufficient for LHM’s operational needs and there would therefore be no need to secure additional space costing £0.109m p.a. compared with Option 2 above.

• The expanded lettable space could also allow for the generation of additional income of around £0.040m p.a. compared with Option 2 above.

Overall, based on the basic income model scenario, the Council’s annual subsidy could be reduced from £0.140m in 2017/18 to £0.070m in 2026/27.

5.4 The ability to reduce the direct subsidy is dependent on the ability of LHM to generate the additional income and phasing of the expenditure, particularly hiring of new staff in order to maximise LHM’s income potential in the first year. This could potentially increase the direct subsidy in 2020/21, by £0.050m.

ANALYSIS OF OPTIONS

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6.1 Option 1 - Do not proceed with Phase 3 but carry out only essential repairs to the Perrin Wing

In 2016, the Cabinet agreed to accept and enter a contractual agreement with the Heritage Lottery Fund in respect of the project. At this stage, a decision not to proceed would break the terms of the contract and would probably require the re- payment of any expenditure from the HLF £0.337m development grant. The donations to the fundraising campaign would also need to be returned leading to considerable loss of reputation and goodwill. Carrying out this option would have a cost of c.£1m but would leave the museum without the facilities that are clearly needed.

6.2 Option 2 - Carry out the scheme which can be delivered for the £6.643m budget indicated in July 2016

A ‘budget compliant’ option has been established. This includes a new lower ground floor extension containing public toilets and the drawings gallery but not one of sufficient size to store the reserve collection. As a result, either the existing basement of the historic house is given over to collections storage leaving insufficient space for staff or vice versa. In either scenario, additional off-site accommodation will be required at a cost of c. £0.109m per annum with a Net Present Value of £1.808m (20 years, 2.5% discount rate). While deliverable within the established budget, this option leaves issues unresolved and significant revenue cost implications going forward.

6.3 Option 3 - Carry out the enhanced scheme at a cost contribution of 51% of the total project cost

This option is recommended and presents a ‘once and forever’ investment in the museum, allowing the brief to be fulfilled in its entirety and responding, in full, to the increasing demands that are being placed on the fabric of the building through growing visitor numbers and evening events. As a result of the project, the museum will have the following new facilities:

• Full disabled access to all public parts of the building • A dedicated reception and shop space • A flexible orientation and gathering space able to contain a pop up café and be hired out in the evening as a meeting room or to house the catering operation • New public toilets and cloakrooms • A dedicated drawings gallery for the display of the museum’s 700 Leighton drawings or loaned exhibitions • Purpose-built storage/study centre for the reserve collections • Dedicated office accommodation for all staff at mezzanine level

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• A dedicated suite of rooms for supporting the delivery of learning opportunities for all • The recovered and restored architecture of the original house currently lost within later additions • An improved and enhanced environment for the entire museum site and its setting as the centre of the ‘Holland Park Circle’ of studio-houses.

7. CONSULTATION AND COMMUNICATION

7.1 The Cabinet Member for Planning Policy, Transport and the Arts has been consulted and supports the recommendation.

7.2 The Friends of Leighton House are now fully engaged with the project with Sir David Verey as the appeal Chairman and Lady Verey devoting a great deal of time to the campaign and development of associated support for the museum. They have been fully consulted and through them the trustee group have also been engaged and are in support of the enhanced proposals.

7.2 The Heritage Lottery Fund has also been consulted and are in support. The inclusion of dedicated learning spaces within the revised proposals is seen as a particularly positive development from their perspective.

7.3 Montagu Evans, Heritage and Planning Consultants are working with Council officers on a comprehensive information sharing and engagement plan that will include Members, statutory authorities, amenity groups and local residents. The plan will be implemented through June and July 2017.

8. PLANNING IMPLICATIONS

8.1 The Executive Director of Planning and Borough Development has been consulted and welcomes the principle of investment in this important grade II* listed building. Increased maintenance of parts of the building is now becoming essential, whilst the lack of facilities such as decent toilets will pose increasing risks to the sustainable future of the building in its present use and consequently its historic interest and its accessibility to the public.

8.2 The holistic approach proposed is welcomed compared to one which addresses the current issues in a piecemeal fashion and over time would likely lead to a less coherent solution with a greater impact on the heritage interest of the building.

8.3 Advice has been provided as part of the design process, as the proposals require both planning permission and listed building consent. Unless objects to the proposals when submitted formally (considered unlikely) the decisions on the applications will likely remain with the Council. If Historic England objects, then the application for listed building consent will be decided by the Secretary of State.

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9. LEGAL IMPLICATIONS

9.1 There are no legal implications other than those addressed in the report.

[Andre Jaskowiak, Solicitor, Shared Legal Services, 0207 361 2756 [email protected]]

10. FINANCIAL AND RESOURCES IMPLICATIONS

10.1 The Group Finance Manager has been consulted and their comments are contained in part B of this report.

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11. ENERGY MEASURE ISSUES

11.1 Issues of sustainability and energy efficiency have been considered during the design and planning process. The project is not targeting a BREEAM rating due to the restrictions imposed on doing works to a listed building. Nevertheless, the scheme will greatly improve efficiency and includes the introduction of full building insulation as part of the proposals (the Perrin Wing currently has none). Close working with the Council’s Climate Change team will aim to further maximise energy efficiency and sustainability. Additional funding will be sought to support these ambitions where possible.

12. COMMUNICATIONS

12.1 Liaison with neighbours, stakeholders, local residents and prospective tenants during the development of the project is currently being planned. A number of media including newsletter and the own website will continue to be used to provide information on the proposed works. A communication plan, including key messages is also being finalised.

12.2 Due to the period of ‘purdah’ running up to the General Election on 8 June, 2017, only essential information and updates will be provided. From 9 June onwards, more general publicity and information will be circulated widely to local residents and stakeholders.

Sue Harris Executive Director, Environment, Leisure and Resident Services

Local Government Act 1972 (as amended) - Background papers used in the preparation of this report: None

Contact officer(s): Daniel Robbins, Senior Curator and Phase 3 SRO, Leighton House Museum (E) [email protected]

Cleared by Finance (officer’s initials) MJ

Cleared by Legal (officer’s initials) AJ

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