By NEIL RIDDELL
SHETLAND’S proposed cinema and music venue will be built if funding from the EU is approved at the end of this month after a last-ditch attempt to derail the project failed yesterday.
The SIC’s development committee approved a £965,000 grant towards the project by a margin of 11 votes to four, with four abstentions, taking the council’s total contribution towards the project to £6.1m. The decision comes following a concerted effort in recent months from councillors Jonathan Wills and Gary Robinson to halt Mareel.
Earlier this week, Highlands and Islands Enterprise (HIE) also approved £965,000 in funding for the project and Mareel was previously awarded a £2.1m lottery fund grant. It means there is now just over £9.2m-worth of funding in place for the project, with a decision from the European Regional Development Fund (ERDF) due at the end of this month.
Councillors agreed that no more SIC funds over and above the £6.1m now committed would be provided to Shetland Arts to build the venue. The last official estimate for the total cost of the project was £9.3m, but several different sources have suggested that the final figure could be over £12m. Shetland Arts is hopeful that the ERDF money, if approved, will cover any contingencies.
The overwhelmingly positive report before councillors in the Town Hall yesterday stated that the project has “significant merit” and claimed that there is “a good argument that performances at Mareel will attract out more people who would otherwise have stayed at home”, which could have a positive impact on hotels and pubs in Lerwick.
The final price tag for the project will not become known until the building contract has been awarded and discussions on the funding package were held in private due to commercial confidentiality. But councillor Allison Duncan suggested during the meeting that the cost had now increased to £12.2m. The council’s head of economic development and author of the report Neil Grant countered that the figure “is not correct” and said that, although he could not discuss figures publicly, “I would dispute the fact that the price is rising”.
At the behest of councillor Betty Fullerton and others, who wanted assurances that the development grant would not be spent on unnecessary frills or gold-plated toilet seats, councillors agreed in a private discussion that the ways in which the grant was spent would be monitored “as closely as possible”. Ms Fullerton said she was sure there was scope for reducing the costs of the building.
SIC convener Sandy Cluness said members had been assured that within the grant conditions, they can be kept informed of how the spending is going and that there will be regular updates to that effect.
Two state aid complaints against Mareel were submitted last month, but the committee heard from lawyer Rodger Murray of solicitors Brodies, who explained that after extensive discussions with the Scottish government’s state aid unit, a response has been submitted to the European Commission stating that the project “does not constitute state aid” because it does not affect trade between member states.
Mr Murray said there had been a “market failure” to provide a cinema since 1989 and that any knock-on effects on local trade and business would be of no concern to the Commission in terms of state aid.
Although accepting that conclusion, Dr Wills gave a wide-ranging and impassioned speech, attacking the officers’ report on Mareel and questioning why the council’s economic development unit was producing “promotional puff” and “advertising rhetoric” for the project.
Dr Wills said the project had been run by enthusiasts, which was a good thing, but that they had gotten carried away. He likened the cinema and music venue to “a hot air balloon” that was “so far off the ground that people are afraid to jump out”, adding that the balloon would soon run out of hot air.
Since the full council’s decision to approve £5.3m towards the project in late June, he said the worsening economic climate was hitting Shetlanders harder than most and that the “slump” was likely to continue for several years. That would mean less disposable income for islanders and less tourists coming to visit Shetland and he suggested it would “knock the business plan sideways”. The only way Shetland Arts could pay for the running costs would be to make redundancies and close or sell properties, he claimed.
Dr Wills said if there were any “surplus cash funds” they were needed for more urgent projects and questioned where the money to pay for childcare facilities would be found.
He and Mr Robinson submitted a detailed list of 35 questions regarding Mareel on Monday evening and committee chairman Josie Simpson said the department had been able to provide answers to those, but that he would not allow further questions subsequent to those answers. Dr Wills said this was regrettable because 18 of the replies were “not satisfactory” and recommended that members refuse approval of the grant.
Mr Robinson called for the business plan for Mareel to be subjected to an external audit by a neutral body. He said if, as he expected, the business plan failed then the people of Shetland would have to pick up the tab and, without a third party examination, members were playing into the hands of those who argue that the charitable trust is simply a “slush fund” for the council.
But Mr Grant said that in his view the project had been given more scrutiny than many other higher value projects in recent years and he was “struggling to see what other work we could have done”, adding that he felt there would be little value in roping in an auditor like KPMG.
Councillor Florence Grains hit back at the remarks of Dr Wills and Mr Robinson. She said it was “rather arrogant” to suggest that the lottery fund, HIE or the council’s own staff were incapable of looking through a business plan. Ms Grains noted that members had just unanimously approved a further £100,000 in funding for the Belmont House project in Unst – with the caveat that no further funding for the next phase of that project will be granted.
“There is a business plan there – nobody even queried that,” she said. There was always going to be an element of “hope” in any business plan, Ms Grains said, pointing out that the business plan for the museum was for 35,000 visitors in its first year, but when the doors opened last year over 100,000 people flooded through the doors in its opening 12 months.
Shetland South member Rick Nickerson said the University of the Highlands and Islands (UHI) was now able to issue degrees and that there was a great opportunity for the isles to utilise Mareel by providing a music degree course, a suggestion backed by Frank Robertson and North Isles member Laura Baisley, who said there would be “huge potential” for bringing in students from Scandinavia and elsewhere in Europe.
Lerwick North councillor Allan Wishart said that after Shetland Development Trust had been brought back under the auspices of the council earlier this year, it would have made more sense for the development grant to have been submitted in a single application to the full council. “I think the decision has already been made,” he said.
When it came to the vote, Dr Wills and Mr Robinson were only able to secure the backing of two other members: councillor Duncan and North Isles member Robert Henderson. Four members abstained, while councillors Bill Manson and Gussie Angus were absent from the chamber and Caroline Miller declared an interest and took no part in the debate.
Mr Robinson’s motion that an external audit be carried out on the business plan was defeated by 13 votes to three.
After the meeting, Shetland Arts director Gwilym Gibbons said the trust would be “keeping our fingers crossed” over the ERDF funding. Asked whether he was concerned that the venue was going ahead without the full backing of the community, he said councillors had provided a “clear indication” of their support.
Tenders to build the project are due to be received on 10th September and the contract should be awarded by the end of that month, with building work set to get underway in late October or early November.
Mr Gibbons insisted the business plan was “robust” and said he had been “reassured” by the fact that all the different funding bodies to date have come back with the same view. He promised that only money that was absolutely necessary would be spent on Mareel and that no extra frills would be included: “If it’s not needed, it won’t be spent,” he added.
But Dr Wills queried where those members who supported the project would be when there was no money left to provide childcare facilities and suggested that the next logical step for the council would be to build an opera house in Ollaberry. Body Text