Mareel funding not a ‘blank cheque’, says Robinson
Neil RiddellThe SIC this week agreed a controversial package of up to £600,000 to rescue Mareel, but political leader Gary Robinson insisted yesterday it had not written a “blank cheque” to Shetland Arts.
Against a backdrop of massive cuts to schools, ferries and roads budgets, the decision provoked a furious reaction among some in the community. There were some particularly heated debates on social media sites.
The issue was debated in private for two-and-a-half hours at Lerwick Town Hall on Wednesday afternoon, before members voted 11-9 in favour of a deal.
In a short statement issued on Wednesday evening, the council said it had approved “bridging finance” to help Shetland Arts settle its outstanding bills for Mareel. That prompted confusion as to precisely what form the assistance will take.
Mr Robinson told The Shetland Times: “We are not writing a blank cheque. It is working capital, but it’s working capital that we control. We only release that if they come to us with an invoice and we have justification as to why that money needs to be spent. We can’t really describe it as a loan, and it’s certainly not a grant.”
Mr Robinson seconded councillor Jonathan Wills in moving that councillors approve the package. Both were among the project’s
most outspoken detractors four years ago, but each said the move was necessary to protect the council’s £6 million investment in the venue.
Asked if he felt the decision would make justifying school closures and ferry cuts doubly difficult to defend, Mr Robinson replied: “I’ve got that loud and clear, but I would hope that by February we would have resolved this [Mareel] one way or another.
“This isn’t a decision that we’ve taken lightly by any means. We have been put in a difficult position, but it’s a situation we’ve inherited and we needed to deal with. I do honestly feel that we reached the right decision.
“I would hope that in the not too distant future, we could make it absolutely clear and transparent why we’ve done this. I want it to be all out in the open, but clearly when you’ve got live cases in the Court of Session it restricts me in what I can say on the subject – that’s a frustration for me.”
One source said the “stark reality” was that walking away may well have led to the collapse of Shetland Arts, Mareel not living to see 2013 and dozens of people being jobless as a consequence.
North Mainland councillor Andrea Manson, one of the nine to vote against, was “distressed” and “personally aggrieved” by what she viewed as a “disgraceful” decision. She saw no fairness in agreeing to assist Shetland Arts but not to “help the peerie village halls”.
The news was welcomed by Shetland Arts director Gwilym Gibbons, who said its board was “seeking an assurance” that the council’s offer would still allow it to draw down additional grants tallying £562,000 from Creative Scotland, the European Regional Development Fund and Highlands and Islands Enterprise.
Meanwhile the dispute over Mareel’s construction flared up again this week, with Shetland Arts stating the contract administrator had put the bulk of an 18-month delay down to “the actions or inaction” of DITT.
A war of words has been raging between the two organisations throughout the year, with legal action ongoing to determine why the building only opened on 25th August. The original completion date was January 2011.
In a statement issued yesterday, Shetland Arts director Gwilym Gibbons was pulling no punches, saying that if DITT had “managed the project diligently and expediently” then Mareel’s doors would have been open in July last year.
That drew an angry response from DITT director Peter Tait, who described the claims as “wild, inaccurate and desperate”.
Full coverage and reaction to the funding decision in this week’s Shetland Times.
Stuart Stenhouse
Gary Robinson is quoted above, “We are not writing a blank cheque. It is working capital, but it’s working capital that we control.”
So if the Chamber (as it would appear) retain absolute veto, they must (by default) be the paymasters of Mareel; deciding what, if at all, our money is spent on?
Is this ‘working capital’ to be used for employee salaries, consumables, day to day expenses, etc….? Something that any other business must cover within their own overheads. This is after all a business, not a charity, not a social enterprise, not a statutory Council service.
“We can’t really describe it as a loan, and it’s certainly not a grant”, says Mr Robinson. So what, may I ask, is the £600,000? Is it, one would presume, an investment? An investment that will bear fruit for the benefit of every islander?
If so, such an astute investment would have attracted the eye of many Shetland business men and women. Did Mareel have a disorderly queue of such entrepreneurs fighting their way to the doors, to put their money on the table?
Finally, I caught the comment from one of the Councillors on Radio Shetland tonight. Words to the effect….I want my money back, and if I don’t get it, I want a share in the building.
That crass comment is akin to saying, if the Titanic sinks, I want a share of the hull.
Alan Duncan
I would suggest to Mr Robinson that if the first the SIC see of this money being spent is at the point of presentation of an invoice then the money is already spent and in effect this IS a blank cheque.
Surely any respectable organisation providing “bridging finance” would impose a level of scrutiny prior to being ‘presented’ with an invoice?
One has to ask if the practicalities of this arrangement have truly been thought through?
Douglas Young
DITT must be wishing they had never won the contract for this ill-conceived, poorly planned project, and when “design faults and material integrity” (or any other munbo jumbo press release speak), come to light in a few years, with the resultant remedial contract advertised, don’t expect any local contractor to touch it.
Demolition may be cheaper, it certainly wouldn’t cause any more anger in the Community than the £600,000 not-a-loan-grant-gift.
Johan Adamson
I am really confused as usual. Working capital is a specific term relating to debtors, creditors, stock and bank and not Fixed Assets. So if this is working capital it is not to pay for any overspend on the building? Is it then paying revenue bills? Or the court action against DITT? Is that why the meeting was private? Are we now funding the legal action with public funds? I think DITT and SADA need to hash it out without it costing both of them lots of money where only the lawyers gain. Since the meeting was in private, and we can only speculate as to what it was about, conspiracy theories will persist. Is it a grant or a loan? Grants are paid on the production of an invoice. Loans are repayable (as are grants if you dont stick to your conditions).
Are we also funding Viking Energy to fight Sustainable Shetland over the judicial review?
ian tinkler
Wills and Robinson “Both were among the project’s (Mareel) most outspoken detractors four years ago, but each said the move was necessary to protect the council’s £6 million investment in the venue Mareel,” Now what happens next time Mareel begs for money? This pair, no doubt, will need to protect the now £6.6 million council investment! I used to have respect for these two but having stood alongside them in the recent council election campaign, and now having seen them offer nothing to help our old, or educate are young, but just follow their own agendas, all completely at odds with their pre-election manifestos, for once, words fail me!. That’s all, enough said.
Jonathan Wills
No gifts to Mareel
Before any of your more irate correspondents have to ask their doctors for tranquilisers, it might be helpful to explain that Shetland Islands Council has not given and will not give any more money to Mareel.
What councillors voted for on Wednesday was the offer of a temporary loan to tide Shetland Arts over its current difficulties, not a gift. Personally, if I could avoid it I wouldn’t give Mareel a brass farthing on top of what it’s had already. As the person who moved the successful resolution, I made it clear that any money we lent would be at commercial rates and that we would also want security for the loan. Otherwise I would not have voted for the “real Mareel deal”.
Exactly how that loan is repaid is something we can discuss. If regular repayments prove difficult, the council could accept the transfer of property in place of cash. In either case, the council’s money would be returned in some form or another. If we have to sell some tobacco or booze shares to provide a loan, then the borrower will have to pay at least as much as the stocks and shares would have earned us.
There can be no gift because making further grants to Mareel is against council policy. It is also contrary to the contract, or “memorandum of understanding”, signed by the council, Shetland Arts and the other backers when the project began.
However, it is technically correct to say that the “bridging fund” established by the council is at present neither a grant or a loan. At this stage it’s only an offer. It will only become a loan when money is actually paid over. Mareel will not get a penny until each payment is scrutinised by the council’s lawyers and accountants. Shetland Arts will open its books to the council and we will conduct a thorough investigation into how this unfortunate situation came about. I assume even our most vocal critics will welcome this “due diligence”, as it’s called in lawyer speak.
Like our critics, I’m sure all councillors will oppose any use of council funds to drag out the various Mareel financial disputes before the courts. The disagreements over who owes what can be and must be settled by independent arbitration, as soon as possible.
I hope that, with a new business plan, Mareel can trade out of its current troubles. Certainly it appears that I was wrong in my gloomy predictions about cinema attendances, for example. The very good figures to date give grounds for a little optimism. But those who support Mareel will also have to put their money where their mouths are, by paying more for tickets and probably also by becoming financial patrons of the venture. This is a common method for helping to fund prestigious projects (for example, the renovation of the Kelvingrove Museum in Glasgow and the National Portrait Gallery in Edinburgh).
It’s easy to call us fools and dupes, but what was the alternative on Wednesday? Let Mareel crash and burn, taking with it all the excellent work Shetland Arts does outwith Mareel? Put dozens of folk on the dole just before Christmas? Leave local creditors with the meagre proceeds of a fire sale of expensive equipment, putting dozens more out of a job? Infuriate the auditors further by allowing not just the £6m SIC investment to go down the drain, but also nearly the same amount of public funds invested by Creative Scotland, the Highlands board and Europe? As someone said, we’d have been left with a £12m empty shed that wouldn’t even be suitable for curing kippers.
Those of us who, four years ago, opposed this grandiose and extravagant project did so because we could see a cheaper and more effective way to deliver a cinema and music hall for Shetland. We explained this in some detail but we lost the vote and, as democrats, had to accept the outcome. We feared then what has come to pass. But there’s no pleasure in told-you-sos. Our duty on Wednesday was clear – to try to save something from the wreckage. And that’s what we’re doing. It’s by no means certain that we’ll succeed but, while sharing some of the views of those who voted against the rescue package, I do believe it was in everyone’s interest that we should make the attempt.
Yours sincerely
Cllr. Jonathan Wills
John Tulloch
Cllr Wills opposed the Mareel project at the start for similar reasons as those who have been flyting about it this week and now he has changed his mind, even going so far as to propose the motion of support – why would he do that?
“Weel, dan wis dan an noo’s noo,” we are where we are now. Could it be that, just as he has explained above, the council had no realistic alternative?
Yes, take councillors to task for spin every time however Cllr Wills’ explanation is the kind of communication I for one am hoping for and while councillors are “there to be shot at,” it behoves us to respond to rational arguments rationally.
So what are the rational counter arguments to what Cllr Wills has set out?
I can’t think of one.
Michael Inkster
So it’s a conditional offer of bridging finance to be operated on an overdraft account with security?
ian tinkler
Sadly John T, the rational counter argument that leaps out at one is the very same irrational and fallacious argument will be used by the council donkeys next time Shetland Arts and Mareel need bailing out. And the time after that and the time after that. Just what arguments does Jonathon have for ignoring Freefield and rural halls??
paul barlow
When did a council become a bank. if Shetland arts can’t fund it and charity trust won’t then tough. how are they going to secure the 600 thousand of our money on a public building. these are the same clowns that really can’t manage a drinking session in a brewery. Any bets it will go wrong.
Maybe it is really time for the Scottish government to take over. Or at least impose some common sense on them. For pity sake stop wasting our money and do the job that your paid for.
John Tulloch
I’m glad somebody mentioned the Scottish government because the SNP’s egregious bid to make Scotland the “Green Capital of the World” – along with a tsunami of new regulations – has turned the heads of previous councils who effectively earmarked the remaining charitable trust funds to renewable energy projects which will not return a crust before at least, 2020.
The heady days of the “Shetland Climate Change Summit” and “Cradle-to-Cradle” sustainability seem like “a long time ago in a far away galaxy”!
So as Mr Salmond’s “Bannockburn Septcentenary Referendum” campaign on independence gets under way and it is clear that Shetland will be a key battleground where he cannot afford to lose will his supporters in the “Yes Shetland” campaign use their influence with the SNP to win support for the SIC in its desperate bid to straighten out the financial detritus councillors have inherited?: