22nd May 2019
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Arts trust figures show £163,250 deficit

39 comments, , by , in News

Trustees of Shetland Arts will tonight be asked to approve the audited accounts for the last financial year, which covers the first six months of operation for Mareel.

The 2012-2013 figures show an overall deficit of £163,250 for the year.

However, a statement accom­panying the accounts points out that, setting aside depreciation of £32,666 (after accounting adjust­ments) and “one off” spending associated with the opening of the cinema and music venue, amounting to £148,018, the trust has an underlying surplus of £17,434.

The “one off” costs are made up of numerous factors including the extended rental of the Toll Clock offices, some staffing costs, legal and professional advice, marketing and web development and ongoing “snagging” in the new building.

The financial statements show that staff costs, including salaries, training, recruitment costs, mileage etc amounted to £1,167,159. Shetland Arts now has 51 full time equivalent staff.

The statements also show gen­erated income totalling £895,275 for the financial year, which includes £327,281 from the box office and £209,382 from Mareel’s bar and cafe.

It is not known what element of the box office total came from the cinema.

For the first time the organ­isation’s generated income is great­er than the income it receives from Shetland Charitable Trust. It amounts to 38.7 per cent of overall income, compared to 22.7 per cent in the previous financial year.

However, it is clear from the accounts that all is far from rosy within the organisation. The trust’s auditors have included an “emphasis of matter” paragraph within the financial statements, highlighting risks to the agency’s future.

They state that ongoing negot­iations with contractors and funders about “final costs of completion of construction” of Mareel create a “material uncertainty which may cast significant doubt about the Agency’s ability to continue as a going concern”.

Elsewhere in the statements, Shetland Arts’ chairman Danus Skene acknowledges this problem, writing that the organisation “is severely challenged by the failure to close the capital account of the Mareel project”.

The capital account, he writes “must be closed, and Shetland Arts does not have the internal resources or earning capacity to achieve this”.

Accompanying their accounts for 2012 – 2013, the organisation also released projections for the current financial year, showing a break-even, despite further “one off” costs of around £100,000. In the next year they expect “a modest surplus”. These projections are based on operating figures for April this year to the end of September.


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  1. ian tinkler

    So here we go again. Will the begging bowl ever stop? Never mind we have to protect our investment in these arty clowns and Mareel, even if our schools have to close, compromising our next generation’s education. Never mind they can (our children) at least chill out in a shiny arts bar and café, pity about their schooling. They can Just watch a film or two, that should keep the arties paid well, all 51 of them!, or will it?

  2. Brian Smith

    You must read more carefully, Tinkler.

  3. David Seymour

    A key point from the article is “setting aside depreciation… and one off spending associated with the opening of the cinema and music venue… the trust has an underlying surplus of £17,434”

    That indicates Mareel is indeed viable in revenue terms, which is great news, but it is the ‘one off’ and construction capital costs which remain problematic.

  4. ian tinkler

    To quote, Shetland Arts’ chairman Danus Skene “The capital account, must be closed, and Shetland Arts does not have the internal resources or earning capacity to achieve this”. Smith, Use your profound wisdom and tell us where these funds will come from, if not the begging bowl? Could this be another yet bung from STC?

  5. Ali Inkster

    No Brian it is you that must read more carefully, “The capitol account must be closed, and Shetland arts does not have the internal resources or the earning capacity to achieve this”.

  6. Robert Duncan

    It seems to a largely passive reader of the comments on these pages that Mr Tinkler does nothing but incessantly moan. Lighten up, you gloomy soul – there’s certainly a silver lining or two to this story and some indication that Mareel is back on the right track.

  7. David Spence

    I would be highly interested to know what the legal costs were for the Mareel against D.I.T.T. and whether or not this had some baring on the figures. No doubt the Lawyers were rubbing their hands with glee as they marched towards the bank with, probably, vastly over charged fee’s they put upon Mareel.

    Is there a connection between the rooked banking system and this of the Legal System?

    I sincerely hope our justice system is not based on how much a lawyer charges for his services………like what it is in the USA? Mind you, if this vile Tory Party get their way, it will be a two tier system of justice……one for the rich and one for everybody else………a so called pseudo version of justice……but as long as they lawyers and legal system rake it in financially.

    Isn’t it very disturbing irony, the people in charge of our legal system are in the same boat as the banks………….both are exceptionally rooked but pretend to be providing a service which serves the public at large……..if only their morals and principles shared the same ethics.

  8. ian tinkler

    Sorry about the moaning Duncan, but with so much of value under threat in Shetland, for example, Education, care of the elderly etc. for lack of funds, can we afford to keep funding wasted projects, such as, Mareel and Viking Energy?
    It is my profound belief those apathetic and passive souls, whom sit back, without the courage or wit, to protest these utter stupidities deserve exactly what they get, however I will never stop moaning about these fund wasting “White Elephants” You however are welcome to moan about me, I am sure that will benefit society enormously and make profound changes for the better..

  9. Johan Adamson

    David Seymour, there are £100k more of one off costs going to be this year – that is on top of capitalising furniture etc:

    As above, “The “one off” costs are made up of numerous factors including the extended rental of the Toll Clock offices, some staffing costs, legal and professional advice, marketing and web development and ongoing “snagging” in the new building.”

    There are always going to be these costs – for any business – every year – that is why they are revenue, not capital – there will be repairs, IT development, etc every year, and depreciation (which is a very real cost unless the building is revalued higher than it cost). As a percentage, £17k is less than 2% net profit. But is better than nothing. But they should set aside something in reserves to cover these one-off costs in the future.

    Does no one yet know what the capital settlement is? I am sure they will get the money to pay it when the time comes. Interesting that the accounts are qualified as a going concern for this.

  10. Chris Grant

    I have to agree with Mr Duncan here, Ian your are so so quick to jump on this.
    Are you under the impression that your incessant criticism “will benefit society enormously and make profound changes for the better..” ?

    It looks to me like yes, clearly there’s issues there but actually it’s not too bad.
    Most businesses make a loss in their first year or two(i’m talking particularly about Mareel here, not ShetlandArts as a whole).

    Generating half a million pounds income in half a year from box office and the cafe is a great start, and looking at the amount of unpredicatable issues and costs that the place has clearly generated, I don’t think that’s too bad a picture.
    I can imagine loads of businesses with that sort of turnover can turn a profit by year 2 or 3 – that’s perfectly normal.

    As far as money being allocated to Shetland Arts instead of Education etc – it doesn’t just come out of one big jar – money is allocated for lots of different sectors and cant just be transferred from one sector to another, so it’s a bit of a silly argument.

    On top of that, a huge amount of community education, higher education and career and volunteering opportunities go on at Mareel and SA so there’s a connection there anyway.

    Ian – great to focus on the problems – but better to search for solutions, and finding the areas that are working.

  11. Robert Lowes

    Why does Ian Tinkler insist on making spurious claims he knows are not true? As he is well aware by now, the education budgets and revenue budgets of the SIC are wholly separate, while the Charitable Trust is a separate organisation altogether. The existence of Mareel has no bearing on on schools being under threat. This simple fact has been confirmed to Ian Tinkler within the comments section of The Shetland Times by none other than Shetland Islands Council leader, Gary Robinson – and yet Mr Tinkler is still seemingly eager to wilfully misrepresenting the facts. Surely a somewhat disingenuous position for our self-appointed moral guardian?

  12. Johan Adamson

    He is right tho Robert it is all still all public money.

  13. Joe Johnson

    Robert, Ian Tinkler is always commenting on the Shetland Times readers views online. He’s famous for it. Just ignore him, we all do. He just likes to argue.

  14. John Tulloch

    And what would you prefer, “Congratulations to the worthy winners of the rosettes at the Waas Show?

    Nothing wrong with criticism, especially, if it “causes perturbations of your orbit” – and it keeps the stewards of public money on their toes.

  15. Robert Wishart
  16. Jane Leask - Clousta

    Ian – I hope you meant this for everyone (“You however are welcome to moan about me, I am sure that will benefit society enormously and make profound changes for the better.”.)- again I suggest that if nothing that happens in Shetland is to your liking that you find somewhere else to live which would benefit Shetland enormously.

  17. Robert Duncan

    I see Mr Tinkler is a bit of an egotist as a well as a moaner…

    As others have told you, the majority of money for Mareel came from outside Shetland, and the public money used was from budgets not allocated to education or the other services you mention.

    Of course it is worrying what is happening to those services but at the same time, but bringing in millions in grant funding for what has turned out to be a facility that could be self sustaining in a few years should not be denigrated so.

  18. Donnie Morrison

    Just to simplify things for Robert Lowes – think of public funds as a coo, da milk might skeet oot o different paaps bit it aa come oot o da sam yudder.

  19. Brian Smith

    Not correct, Donnie – it cam oot o different coos.

  20. Robert Duncan

    The external funding used for Mareel wouldn’t have been available for other projects. The council money could have gone elsewhere, but then you’re turning down the opportunity to inject £5-6mil into the local economy on a project that – as we can see – could well become self-sustaining and provide not only excellent facilities, but jobs (and in particular jobs for younger folk, which are comparatively lacking in Shetland).

  21. john ridland

    Keep up the good work Ian , Your the voice o da silent majority..
    Dont let da bas****s grind you down…!!!!!!

  22. In defence of Mr Tinkler, he gets you all thinking and debating, for good or bad.

    Long live Mr Tinkler.

  23. Brian Smith

    But surely da silent majority isna boneheaded an misinformed?

  24. John Tulloch

    Aye, “Nil Carborundum!”

  25. Robert Sim

    Danus Skene (Chair of Shetland Arts) said on Radio Shetland last night that the organisation would not be asking the SIC for any more funding to cover the gap identified in the Mareel funding. I think that takes care of the “begging bowl” charge – I assume asking the Council for funding is what lies behind Mr Tinkler’s original post.

    With that matter resolved, there is no reason I can see to do anything else other than congratulate the Shetland Arts staff on what they have achieved this year and trust that things will continue to develop positively. As has been pointed out, Mareel and the work of Shetland Arts in general contribute positively to the local economy.

  26. Nigel Hallett

    Since when has “snagging” been an ongoing cost? When I worked in the construction industry snagging involved the contractor putting right what had failed or been done incorrectly.. No charge to the original payer.

  27. David Spence

    I sincerely hope the Mareel proves all those doubters and those who thought it was a waste of money and resources can turnaround a profit and keep alive (which is the main function of the place) shetland music and those musicians educated and trained further in their skill of music and playing traditional as well as other styles of music for future generations to take up and pass on the fantastic musical skills shetland people, as a whole, have.

    I have always said that a place like Mareel is about 20 – 30 years too late, even so, now that it is here, lets support it and support why it is here……..as is mentioned in the previous paragraph.

    Ian, if you want to complain, as you see it, about ” White Elephants ” look no further than the fiasco of the Viking Energy Project and how this is bleeding our money (Shetlands money) dry for a project, based on the figures, has not got a hope in hell’s chance of ever starting. Based on the figures I know, although it could be questioned, the whole VEP could cost as much as between £1.50 – £2.50 billion, which equates to roughly less than 1% return on the Charitable Trusts investment………….Now Ian, that is something very much to complain about lol

  28. Robert Duncan

    “Silent” majority my backside! You can’t go ten minutes in a pub in Lerwick without hearing somebody whinge about Mareel.

  29. Allen Fraser

    Different coos – sam byre an fodder fae da sam yard makin sharn fur da sam runnik?

  30. ian tinkler

    To put it as simply as possible, for those too inane to understand, all the funding for Mareel came from our own pockets via Tax revenue. That is with the exception of a cool £ one half million or so loan from the Charitable Trust. For all those funds we have a project which at this time is insolvent. Without a further grant, loan or cash bung Mareel will have close, leaving absolutely nothing of any value. If Shetland Arts cannot raise substantial undisclosed finds (6 figure plus) we will be left with nothing. No jobs, no arts centre, nothing but an unusable building and £14 million of public money wasted and Shetland Arts bankrupt… We even have the very sad fact that, Shetland Arts planning to sell their remaining assets to try and keep Mareel afloat! (http://www.shetnews.co.uk/news/7421-mareel-in-a-tight-spot-despite-success). All of the funds so wasted on Mareel could have been used on education, care of the elderly or whatever our political leaders may have chosen, maybe not all in Shetland, but what use to Shetland is Mareel, if bankrupt and closed?. Only a complete idiot would regard Mareel as an asset at this time. I quote Shetland Arts Chairman “The gloomy news is that we have to get the capital account settled, closed and tied up to get on with the job that we are meant to be doing. “I have made it absolutely clear to everyone involved that we can be brought down unless this happens and we don’t have the means to do it ourselves.”

  31. Robert Duncan

    If you’re going to question the intelligence of others in such an aggresive manner, Mr Tinkler, I would ask that you at least get your facts straight:

    £2,120,000 – Scottish Arts Council lottery fund
    £50,000 – Gannochy Trust

    That’s a reasonable chunk of the project that was not from taxpayer money, for starters.

    I hope they do find the money they require, as the accounts would suggest the business can be run sustainably. They’ve already outperformed their targets in terms of operating costs, so it’s just the spiralling capital costs that have stung them. That is certainly positive news given the doubts many had about the project.

  32. ian tinkler

    Brian, for once we agree absolutely, that is about VE. If Mareel is to be a success, and I truly hope it is, it needs funds urgently. Now if the cinema is as profitable as claimed, surely the way forward is for that part of Mareel, to be commercially leased out to raise the necessary funds. It matters not whom runs the cinema, a film is a film even if wicked capitalist run them for profit, heaven forbid. That has to be better than this whole enterprise failing and bringing Shetland Arts down with it. For without further funding that will most certainly happen…

  33. Robert Lowes

    You’re still peddling the same misinformation Ian – none of the money used to build Mareel – not a penny of it – could have been used for either education or care of the elderly. Those come from different budgets and they do not mix and match. Much of the money for Mareel was from Scottish Arts – presumably had Mareel not been given the go-ahead by the council, SA would have spent it on something else arts-related in another part of Scotland. Which would be of no immediate benefit to people living here. Meanwhile, your latest claim that you hope Mareel will be a success is laughable, given your track record of misrepresentation, attack, insult, and distortion of fact.

  34. ian tinkler

    Robert Duncan, that is less than 10% of Mareel’s cost. Split hairs if you must, it matters not if Mareel fails.

  35. ian tinkler

    Maths o dear 20%

  36. Robert Sim

    Looking at the Shetland News article Ian Tinkler highlights above, it seems that Shetland Arts has a clear plan to cover the funding gap. That doesn’t seem to me to be a cause for hysteria.

  37. Ian Tinkler

    Robert, If Shetland Arts new plan follows the pattern of the previous plans that have dreamt up with regard to Mareel, I do not think “Hysteria” would be the word that springs to mind! However, I must congratulate Danus Skene for his honesty. It makes such a refreshing change for a Shetland Arts executive to have the courage and candour to tell the truth. At last, we have a touch of reality in his leadership. That alone gives ground for hope.

  38. Johan Adamson

    No hysteria. They need to cover depreciation and building costs like repairs in their future budgets. There is a long winter ahead. They need to get the money to pay DITT what they are owed.

    At least Ian Tinkler writes under his own name.

  39. Ian Tinkler

    Robert Lowes, specifically with you in mind. To put it as simply as possible, for those too inane to understand, most of the funding for Mareel came from our own pockets via Tax revenue. That would be 80% of all funding, Those funds could have been used on education, care of the elderly or whatever our political leaders may have chosen. That is an absolute matter of fact Mr Lowes, just where you think these funds originated from. The Arts fairy??


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