Page last updated at 12:34 GMT, Tuesday, 28 October 2008

Design centre facing cash crisis

The Lighthouse (photo from Page & Park Architects)
The Lighthouse in Glasgow said its budget deficit was about 300,000

The centre which champions Scotland's architecture and design is facing a cash crisis.

The Lighthouse in Glasgow said its budget was overstretched by 300,000.

This was down to a decision by Scottish ministers not to fund the Six Cities Design Festivals and an overspend at this year's Venice Design Biennale.

The centre has asked Glasgow City Council to back a rescue package which also includes commitments from Scottish Enterprise and the Scottish Government.

Requests for additional funding will go before Glasgow City Council's Executive Committee on Friday.

The agenda paper setting out the problems at The Lighthouse, states that the financial shortfall for 2008/09 is approximately 300,000.

The paper said this reflected "two particular setbacks which had seriously impacted on its financial position".

These were the decision by the Scottish Government not to invest in future Six Cities Design Festivals.

The Lighthouse said it had retained the expertise of the core team to undertake development work and these costs and associated redundancy costs had been a major contributing factor towards the loss.

We are keen to see this new set-up succeed, but we will be monitoring The Lighthouse's financial situation closely and will have to be convinced that it is turning things around
Councillor George Ryan
The centre also agreed to put together the Scottish stand at the 2008 Venice Design Biennale programme.

The paper said that although this was "critically successful" it had "significant unanticipated costs which were not covered by the Scottish Government grant for the project".

It states that unless a financial rescue package can be agreed "The Lighthouse will have no option other than to wind the company up and close".

The proposal is to restructure the centre's management and business plan and free up more space at its Mitchell Lane venue for revenue-generating corporate events.

Provisional agreement has also been reached between Scottish Enterprise and the Scottish Government over financial backing.

'Refurbishment works'

This will see Scottish Enterprise make an immediate grant contribution of 50,000 and ministers agree to "flexibilities in the timing of its payments" to The Lighthouse.

Glasgow City Council will be asked allow the centre to repay a sum of about 245,000 in the form of a 10-year interest free loan.

The council will also be asked to provide a further 50,000 core funding next year and "release up to 100,000 for property refurbishment works".

Councillor George Ryan, development and regeneration services spokesman, said: "The Lighthouse has experienced an unusual combination of financial difficulties this year.

"But we have been assured that it is taking steps to restructure and implement a new business model which will make it more commercially viable.

"We are keen to see this new set-up succeed, but we will be monitoring The Lighthouse's financial situation closely and will have to be convinced that it is turning things around."


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