Shetland Arts is inviting private businesses to bid to run its cafe at the Bonhoga Gallery as the council steps up its attempt to reduce the £430,000 public subsidy dished out to various other catering outlets in the isles.
The Mill Café, which opens six days a week throughout the year, has a gross turnover of more than £60,000 but has required a subsidy from Shetland Arts of around £6,000 in the last year and the organisation is advertising in The Shetland Times for any interested parties to come forward.
Director Gwilym Gibbons said his organisation had been considering the move for some time and tenders were being invited to test the market because it is not Shetland Arts’ purpose to run cafes, but he was clear that if there was insufficient private interest then its importance in drawing visitors out to the gallery in Weisdale meant they would have to continue running it themselves.
The Mill Cafe has built up a good reputation in recent years but current chef James Martin – its only full-time employee – has recently decided to move on to the Peerie Shop in Lerwick, which Mr Gibbons said made it a good time to consider a new model: “We’ve always had an intention to work with partners in catering services, offering it out to anybody that wants to come forward with regards to running a catering service.”
Shetland Arts’ decision comes after the development committee agreed on Thursday to undertake further investigation into how to reduce the drain on the public purse from other subsidised cafes.
Along with Bonhoga, those which formed the basis of a review by the economic development unit on behalf of the council and charitable trust were the Horizons Cafe at Clickimin (which is set to close next month after its losses worsened in recent months), the same leisure centre’s Loch Bar, Islesburgh’s Blue Rock Cafe, Da Haaf Restaurant at NAFC Marine Centre and some of COPE Ltd’s catering.
Those establishments were given a combined subsidy of £429,400 in 2008/9 out of an overall turnover of £1.3 million, the overwhelming expense being £861,400 on the 49.5 full time equivalent staff members.
It was agreed at Thursday morning’s meeting for head of economic development Neil Grant and his team to approach the organisations operating the cafes to discuss possible options, including franchising out services and reducing or even removing the subsidies altogether.
Councillor Allison Duncan said he was “astounded” by the overheads being incurred by the cafes, a situation which “cannot continue – the sooner this goes to be put out to the private sector the better”.
He asked for a detailed financial breakdown on each of the outlets but, even though they are all run by publicly-funded bodies, Mr Grant claimed it was not possible to reveal fuller information because “we have to be careful what we say” in relation to the various businesses.
SIC convener Sandy Cluness said it was important not to “leap at deciding franchising is the best case in every option” without getting more detailed knowledge of each individual case. His motion was accepted without opposition, but all councillors seemed to agree with Caroline Miller that “there must be a move towards a reduction of public subsidy”.
Former Islesburgh Trust trustee Gussie Angus agreed that “one size fits all” would not be a proper response. He recalled how the two cafes at Islesburgh had long been losing “vast” sums of money and said the review was long overdue because of the unfair competition it created with private catering. “We’ve made a big mistake,” he said. “We have to think very carefully about whether subsidising public lunches is the best use of our diminishing resources.”
Concern was expressed, most forcefully by Lerwick South member Cecil Smith, about the prospect of the Horizons Cafe at Clickimin shutting its doors.
That decision was taken by Shetland Recreational Trust because of increasing pressure on its budget and in the realisation that it is unlikely to get further public subsidy to keep the operation going. “It’ll be a big disaster if we have to see that place closing,” he said. “We have to find a way forward.”