Agenda item

Report of Corporate Director for Resident Services

Terry Cooper, Business Performance Manager, presented a report on the proposed use of the Theatre Royal and Royal Concert Hall (TRCH) Restoration Levy Reserve. The following points were discussed:

(a)  the Restoration Levy Reserve has been established for use for repairs, refurbishments, structural maintenance and development of the THRC and its associated assets. An Asset Management Plan has been developed to set out a programme of works from 2022/23 to 2027/28, costing up to £2.786 million. It is anticipated that these works will be fully funded from the Reserve, whilst at the same time allowing the Reserve to grow to provide match funding for major work required in 2028/29. This programme of works continues to be reviewed by the Capital Board;

(b)  due to the post-Covid recovery and supply chain issues, there are inflationary pressures in the construction and building sector. As such, contingencies have been included to ensure that the spending plan is affordable. However, unless the TRCH were to actually enter a derelict state, it is unlikely that any temporary delays to the repairs programme on the basis of cost would affect ticket sales;

(c)  the Committee noted that, in the decisions submitted for its approval, the ‘Social value considerations’ section of the report should not only consider the value provided by the asset or service in question, but also how the needed commissioning and procurement process itself will contribute to the social value. The Committee requested that, as part of the general decision-making process, reports should seek to provide assurance that goods and services will be procured locally (wherever possible and appropriate, under the required frameworks), and in a way that reduces the environmental impact and promotes sustainability, and supports local employment.

Resolved:

(1)  to approve the spend of the Theatre Royal and Royal Concert Hall (TRCH) Restoration Levy Reserve on repairs, refurbishments, structural maintenance and development of the THRC and its associated assets;

(2)  to delegate authority to the TRCH Venue Director to review and update the Restoration Levy as and when required, taking into account inflation, market tolerance and industry benchmarking;

(3)  to approve the use of existing framework contractors, or to undertake procurement processes as required, for the work identified in the TRCH Asset Management Plan;

(4)  to delegate authority to the Corporate Director for Resident Services to award and sign the contracts for successful contractors identified following the completion of any tender process;

(5)  to note the addition of up to £2.786 million to the Capital Programme 2022/23 to 2027/28;

(6)  to note that whilst TRCH will build up its Restoration Levy Reserve, significant additional funds will need to be secured for the major works required in 2028/29.

·  Reasons for the decision

In 2018, a survey was commissioned to provide information on the physical, mechanical and electrical conditions of the TRCH. This survey has been used to inform the creation of an Asset Management Plan that prioritises a schedule of maintenance, repairs and refurbishments at the venue, with an estimated spend of up to £2.786 million over the next 6 years. In order to help fund these works, a Restoration Levy was introduced in 2019, to be included in the face value of the majority of tickets sold at the venue to deliver an annual income value of approximately £500,000. This income is placed in the Restoration Levy Reserve, which is ring-fenced for repairs, refurbishments, structural maintenance and development of the TRCH and its associated assets.

·  Other options considered

To not spend the Restoration Levy Reserve: this option is rejected as the reserve would continue to grow and not be used for the purposes for which it was established. Works identified in the Asset Management Plan would either have to be funded from elsewhere or not be undertaken, putting the future operation of the venue at risk.

To not review the Restoration Levy: this option is rejected as inflation will gradually reduce the value of the reserve and its ability to fund the works required in the Asset Management Plan in the future.