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Oral - The Wales Millennium Centre

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Rhodri Glyn Thomas, the Minister for Heritage

 I am pleased to make a further statement about the Welsh Assembly Government’s plans to bring greater financial stability to the Wales Millennium Centre. The Government has been involved in all stages in the development of the WMC. Significant amounts of public money were invested in its construction, and have been directed subsequently to support its operating costs. This investment has already brought significant public benefit. The additional funding that I am announcing today is intended to ensure that the centre can consolidate its iconic status and continue to deliver benefits for the whole of Wales.

It is worth reflecting on some of those benefits. The centre has attracted more than a third of a million paying customers in each of its three years of operation. Seat sales reached 70 per cent of capacity in 2005 and 73 per cent of capacity in 2006. It has succeeded in growing the audience for cultural events in south-east Wales, partly through attracting people from all over Wales. The centre’s education and community programmes have attracted a further quarter of a million people every year. In co-operation with Urdd Gobaith Cymru it has given us a thrilling Welsh-language version of Les Miserables, and in co-operation with Dr Who and Torchwood it has placed Cardiff Bay firmly on the map for TV viewers around the world.

However, what has also become clear is that the funding model put in place in 2001 now needs to be revisited to reflect the actual experience of running the centre rather than the forecasts available before it opened. The evidence following its first three years of operation shows very clearly that if we are to sustain and develop the public benefits generated by the Wales Millennium Centre we need to increase the level of public revenue support made available to it. Despite its commercial success it has, for example, become clear that there is no prospect of the centre being able to pay off the £13.5 million loan it received from HSBC. The cost of servicing that debt is one of the obstacles that stands in the way of the centre becoming financially sustainable. Members will recall that that loan is guaranteed by the Government. I can today announce that the Minister for Finance and Public Service Delivery has agreed that that debt should be removed from WMC’s balance sheet. My officials will consider how best this can be effected following discussions with HSBC and WMC. The Cabinet has agreed that this would be achieved using funds accumulated from Assembly Government underspends in previous years.

I am also pleased to announce an increase in the recurrent revenue funding made available to the centre by Government. There has been no increase to the £1.2 million made directly available to the centre every year from public funds since it commenced operations. As the level of revenue support was first determined in 2001, it is now clear that that figure is not sufficient to enable the centre to be run on a sustainable basis.
The draft budget for the heritage portfolio, announced by the Minister for Finance and Public Service Delivery on 5 November, therefore makes provision for support provided to the centre to increase to £3.7 million next year and to remain at that level until 2010-11. This will not be at the expense of the arts budget more generally and not at the expense of arts bodies outside Cardiff. An additional £1.5 million per year has been allocated to implement the recommendations of the Stephens review, and each of the cultural organisations for which I am responsible will receive an increase in funding under the budget announced on Monday. The budget for arts organisations administered by the Arts Council of Wales will increase by £2.5 million by the end of the spending period.

This enhanced funding does not mean that there will be any weaker incentive for the WMC to operate on a commercial basis. We will continue to set stretching commercial targets. However, one of the keys to the long term success of the centre will be to strike the right balance between public funding and the funds that it can generate itself. Until now, this balance has been absent. Despite having hit stretching audience targets, the centre has not been able to generate sufficient funds itself to ensure its long-term sustainability. Our ambition as a Government is to deliver that long-term sustainability.

We will draw on the experience of the last three years to establish targets for the centre that are stretching but achievable. Those targets will be just one aspect of a new funding agreement that spells out in more detail the wider range of public benefits that we intend our investment to deliver to the whole of Wales. As part of that new funding agreement, we will also be commissioning a review of the governance arrangements for the centre in order to ensure that it remains fit for purpose given the enhanced public investment that we will in future be making available.

The future success of the millennium centre is not, however, a matter for Government alone. Right from the beginning, the centre has involved a unique partnership of cultural organisations. The WMC provides a wonderful home for the Urdd Eisteddfod when it visits Cardiff. It is one of Europe’s finest opera houses. It will continue to showcase the best of contemporary and classical dance. Our aim, however, should be to ensure that this partnership amounts to more than the sum of its constituent parts. There is still some way to go in this regard.

I want to encourage an even stronger relationship between the WMC and the largest resident organisation, namely Welsh National Opera. While these are matters for the two organisations concerned, the Welsh Assembly Government believes that a new agreement is needed between the two organisations on the number and the basis of dark nights required to allow WNO to rehearse its productions. I am pleased that we are moving towards a sale of the John Street site that will be to the mutual benefit of both organisations. We are fortunate in having a world-class venue for our world-class opera company. It will be to the benefit of both organisations to strengthen this unique cultural partnership over the years to come.

Our vision for the WMC extends beyond opera. It includes all of the resident organisations based at the centre. Therefore, alongside the new funding package that I am announcing today, I have asked the Arts Council of Wales to participate with Welsh Assembly Government officials in a project aimed at developing a new cultural vision encompassing all organisations resident at the centre. Working through my new arts strategy board, our aim must be to unlock the unrivalled potential that the Stephens review of the arts identified last year.

The WMC has within its three year existence become a widely recognised and respected institution. It has brought international artists and productions to Wales, recognised Welsh talent and come to represent the vitality of Welsh culture. It has given Wales a modern and exciting image and it exemplifies the successful regeneration not only of Cardiff bay, but, indeed, of Wales itself. I am confident that it has the potential to do more and to become an ever more potent symbol of what a small but smart nation such as Wales can achieve. I very much hope that our vision for the centre is one which all parties in this Assembly will wish to support.