Board members at crisis-hit Horsecross Arts have walked out after an audit report raised “serious concerns” over financial management.
The leader of Perth and Kinross Council Murray Lyle said he has accepted the resignation of most of the organisation – including chairman Magnus Linklater – as he prepares to launch a “refreshed cultural vision” for the city in the new year.
The local authority was forced to bail out Horsecross, operators of Perth’s theatre and concert hall, when the scale of its cash flow problems became clear earlier this year.
Chief accountant Scott Walker was parachuted in to provide emergency financial management in August, after a series of miscalculations led to a £74,000 shortfall.
Mr Lyle said: “Perth and Kinross Council has received and accepted the resignation of the majority of Horsecross Arts board members. We would like to thank the board for their service during this time.”
He added: “Culture is central to the vibrancy and sustainability of our communities and our economy.
“Perth and Kinross Council is currently delivering an exciting £53 million culture-led regeneration programme and will be developing a refreshed cultural vision and programme of activities in early 2020 with our citizens and communities that ensures our offer is for everyone.
“It is essential that any arts body which is funded by the council makes a strong contribution to this agenda and has in place robust governance arrangements to support this.”
He said recently arrived CEO Nick Williams will remain in post and Horsecross Arts will “continue to exist as a legal entity”.
In June, councillors were presented with a positive outlook for Horsecross. They were told a break-even budget had been signed off and cash flow issues were being managed.
Just five weeks later, the local authority was presented with a new financial position that showed the forecast cash flow of £77,000 had plummeted to minus £253,000 – a deterioration of around £330,000.
The shock slump was blamed on, among other factors, £90,000 of “errors and omissions” and an assumption of £120,000 of Creative Scotland funding which had not been finalised or agreed.
Mr Linklater said: “It has been a privilege to run Horsecross Arts over the last six years.
“We have great confidence in its artistic direction, and would like to pay tribute to the strength and resilience of its wonderful staff and all those who have contributed to its success.”
He added: “We wish Nick and his staff all the best in building audiences and ensuring that Horsecross remains at the heart of the area’s cultural offer.
“We trust that whatever model is proposed for the future running of the company, it enshrines its charitable status, its independence, and a new board committed to maintaining its artistic integrity.”
