Cornerhouse acts to avoid funding crisis
THE trustees of one of the North West’s premier independent cinemas are to rein in spending and generate more income to avoid a future funding crisis.
They say they must curb a deficit in the reserves of the Greater Manchester Arts Centre, the charity that operates Manchester’s Cornerhouse cinema.
Chief executive Dave Moutrey told TheBusinessDesk that the cinema, in common with other arts organisations, also needs to be leaner in anticipation of future funding cuts from public sector arts bodies.
“A lot of arts organisations are in a very similar position, we’re all looking to develop new business models,” he said. “We’re about to head in to very tough times. Unless we get things lined up it’s going to be difficult.”
Just under half of the Cornerhouse’s £2.5m running costs come from grant giving agencies which are expected to cut spending in the coming years. It has also seen revenue from corporate sponsorship fall, along with income from trusts and foundations that have seen investments affected by stock market turbulence.
In response the cinema has changed the way it shows films, allowing it to screen hits for longer periods and axe flops. It was previously committed to showing films for set periods. Mr Moutrey expects the new model to increase revenue by 10%.
It has also renegotiated the franchise on its cafe bar and opened an extension to increase income from educational programmes. In the previous year the cinema cut the equivalent of four full-time posts.
The charity’s latest annual accounts for the year to March 2009 show its reserves are in deficit by £331,831. The target is a credit of £150,000. By this month the trustees expect to have generated a surplus of £40,000 which they can use to reduce the deficit, but there will still a gap of £442,000 between the target and the actual position.
In their report the trustees say the venue must have a new emphasis on finance. Until now it has prioritised its public activities in the belief this will bring in more paying customers and generate more grant support.
The report states: “There is evidence that this strategy is sound, because over the long term Cornerhouse has expanded and increased the reach of its activities. However financial prudence concerns now require that, for 2009-10 and subsequent years, the company should either rein in its expenditure or secure increased income so as to be able to return a surplus and erode the deficit on free reserves.
“This is not merely a theoretical policy concern but is reflected in the limited cash resources available for the operations.”
The Cornerhouse, which employs 93 staff and runs art exhibitions and educational programmes as well as showing films, had an income of £2.4m last year with just under half coming from grant giving agencies such as the Arts Council. It spent £2.5m during the 12 months.
