Statement on Middleton—The National Botanic Garden of Wales

The Minister for Culture, Welsh Language and Sport (Alun Pugh): With your permission, Llywydd, I wish to make a statement on Middleton, the National Botanic Garden of Wales. In Plenary last week, I agreed to make a full statement regarding the financial crisis at Middleton. Yesterday’s announcement by the board of trustees, who are responsible for the operation and management of the garden, provides me with a timely opportunity to update Members on the situation at Middleton. I also intend to outline the continuing efforts being made by the Welsh Assembly Government and our partners to secure a long-term future for the garden.

I think that it would be helpful for me, at the outset, to set out the background as to where we are today, particularly in terms of the Assembly Government’s support. Middleton, the National Botanic Garden of Wales, was established as an independent, self-financing organisation. The business plan, which was accepted by the Millennium Commission as an integral part of the application for capital funding, was built on the premise that visitor revenue at the gate would cover day-to-day staffing costs and overheads.

The trustees’ ability to pay their way, therefore, depends wholly on the garden’s ability to attract visitors and generate income from those visitors. Despite efforts by the board of trustees and the management of the garden, visitor numbers have declined steadily since Middleton opened in May 2000—from 220,000 in 2000-01 to 195,000 in 2001-02 and an estimated 150,000 for the 2002-03 financial year. As a result, Middleton has accumulated substantial trading deficits and now has an overdraft of nearly £2 million.

Middleton first approached the Welsh Assembly Government for financial assistance in the summer of 2002. At that time, we agreed to provide a grant of £360,000. This funding was made available to help meet essential operating costs while KPMG, acting on behalf of the Assembly Government, carried out a full financial review of Middleton and examined its future potential for generating sufficient income to be self-financing. KPMG concluded that investment in the facilities at Middleton would be necessary to improve visitor numbers.

As a result, a further grant of £1.06 million was made available to Middleton to allow management and trustees sufficient time in which to develop a new and comprehensive business plan that would aim to demonstrate future viability as a result of that investment. This total support of £1.4 million clearly demonstrates the Welsh Assembly Government’s commitment to Middleton and to securing its future.

The business plan produced by Middleton concluded that, without substantial capital investment in facilities and attractions, visitor numbers would not improve to the levels necessary for the garden to become self-financing. It should be noted that the increase necessary would be approximately 60 per cent on current visitor levels.

The success of the trustees’ business plan was predicated on a staged investment over the next three to four years, totalling some £8 million. According to that business plan, this investment would lead to an increase in visitor numbers that would ensure that Middleton would be able to fund its own activities without requiring future subsidies. As I have already mentioned, the increase necessary would amount to millions of pounds.

While it is clear that further investment could have a positive impact on visitor numbers, we have concluded that the capital programme proposed in Middleton’s business plan would still not deliver the increase in visitor numbers necessary to achieve financial self-sustainability.

Against this background, we have been exploring a range of other options for securing a long-term future for the garden. In considering these options we have worked in co-operation with the trustees and the management at Middleton, and with our key public sector partners—Carmarthenshire County Council, the Welsh Development Agency and, of course, the Wales Tourist Board. In addition to examining different ways in which Middleton could operate, we have been working closely with the trustees in seeking to identify potential investors or partners who might be interested in playing a part in the future operation of Middleton. To give more time for that work to be completed, at the end of September we offered Middleton a final one-off grant of £150,000 to meet essential operating costs during October, taking total Welsh Assembly Government support to over £1.5 million.
Suggestions that the Assembly Government has not supported the garden are nonsense, but everyone must understand that the Assembly Government cannot and will not support huge losses on an open-ended basis.

Over the last week or so, the trustees have been making efforts to put together a funding package that would enable them to continue to operate beyond the end of October. This culminated in a meeting of key stakeholders last week at which Carmarthenshire County Council indicated that it was willing, in principle, to match the £150,000 offered by the Welsh Assembly Government. The Millennium Commission also indicated that it was prepared to provide funding of £53,000. The total funding package, amounting to some £353,000, will allow the trustees to continue to operate Middleton after the end of October, albeit on a reduced scale.

The board of trustees announced yesterday that it would accept this further funding package and confirmed that Middleton would remain open at least in the short term. In seeking to reduce costs at the garden, it is inevitable that the trustees have had to take some difficult economic decisions regarding the workforce. I understand that many of the staff at Middleton will be facing redundancy. The Welsh Assembly Government is of course deeply concerned about potential job losses and will do all it possibly can, with its Team Wales partners, to assist employees affected by the announcement and help people to re-enter the labour market quickly.

I am greatly encouraged by the financial support that Carmarthenshire County Council and the Millennium Commission have offered to provide. This clearly demonstrates that there is potential for partnership in seeking a long-term, sustainable future for the garden. Our immediate priority is to support the trustees’ in their efforts to implement a robust strategy for identifying potential investors or partners.

I reaffirm the Welsh Assembly Government’s continuing commitment to working with Middleton to achieve a successful outcome. I do not want to see the garden close. It would be bad for Carmarthenshire and bad for Wales, but, given the scale of losses and the significant drop in visitor numbers, Members will understand that I cannot offer a guarantee of success.