Report of the Deputy Chief Executive and City Treasurer.

This report provides an update on progress with the delivery of The Factory Arts Centre, progress with the redevelopment of St John’s and the preparations for the opening of the building.

The Committee considered a report of the Deputy Chief Executive and City Treasurer and the Strategic Director of Growth and Development which provided an update on progress with the delivery of The Factory Arts Centre, progress with the redevelopment of St John’s and the preparations for the opening of the building.

Key themes and points in the report included:

·         Creative industries are the fastest growing sector in Manchester and the creation of Factory International will sustain and grow this vital sector as well as strengthening Manchester’s reputation as a nationally and internationally important centre for culture and creativity;

·         Anticipated visitor figures both in a festival year and non-festival year;

·         The number of jobs provided by the development of Factory International and St John’s Quarter;

·         The work of The Factory Academy in providing training and skills;

·         Cost pressures facing the project, despite tight management and work to preserve completion dates;

·         The total forecast outturn position for the project is a shortfall of £19.7m excluding the acceleration works, additional contingencies and risks;

·         The strategic principles underpinning a five-year campaign from 2021 to support projected income targets for commercial sponsorship and philanthropic support;

·         Contractual arrangements between the Council and Manchester International Festival;

·         Inspiring local communities is central to the vision for Factory International and a creative engagement strategy will be delivered to focus on several workstreams; and

·         How Factory International will be environmentally sustainable.

Key points and queries that arose from the committee’s discussions included:

·         The positive benefits of the project;

·         What was meant by ‘management contracts’;

·         Requesting more information on the Kickstart scheme and whether this had started;

·         Seeking reassurance that there will be no requirement for future capital expenditure increases for the project, particularly given current price uncertainties;

·         Whether officers remained confident that the Factory International remained set to open in June 2023;

·         If a broad prediction of income generation from sharing the naming rights to Factory International was available;

·         How Factory International would be inclusive and inviting to all residents, given the current cost-of-living crisis;

·         If any further requests would be made for central government funding; and

·         Requesting clarification on the breakdown of costs that the additional £25 million would be spent on.

The Director of Capital Programmes explained that management contracts consisted of the main contractor acting as an agent for the employer and has responsibility for entering into individual supply chain contracts on the employers behalf as opposed to undertaking construction themselves. The contractor would advise on the programme and costs and manage individual contracts. In this instance, a contractor would have no input into design and the Council employs a separate design team.

The Executive Director of Factory International explained that the Kickstart programme reflected Factory International’s continued commitment to providing access for those traditionally socially and culturally excluded from the arts. It will provide hands-on experience and improve confidence needed to get jobs within the cultural sector.

Factory Academy was highlighted as being central to the work of Factory International and has ran for a number of years. Apprenticeships, traineeships and other opportunities were also offered. 

The Deputy Chief Executive and City Treasurer acknowledged that the volatility of the current economic climate meant that they were unable to guarantee there would be no further requests for increased expenditure for the project but advised members that final cost estimates were stable.

Officers were also confident that Factory International would meet its target completion date of June 2023 and members were advised that the Council and partners endeavoured to accelerate works to ensure comfort around the target date.

Much of the committee’s discussion focused on naming rights. The Executive Director of Factory International informed members that an initial independent analysis had been undertaken to survey similar venues which have previously secured sponsorship to provide an accurate assessment of the value of naming rights. The valuation for Factory International amounted to £25 million.

Market challenges were acknowledged but were not anticipated to impact fundraising ambitions.

Advanced conversations with leading brands for naming rights had taken place and were being developed. Members were advised that this would be a long-term collaboration and Factory International would seek to meet and exceed its fundraising target through naming rights.

The Statutory Deputy Leader also assured members that he sits on two Ethics Committees – one for Manchester International Festival and one for the Council – which scrutinises potential sponsorship partners to ensure they are appropriate and relevant.

In response to a query regarding how Factory International would appeal to different communities and interests, particularly given the current cost-of-living crisis, the Executive Director of Factory International explained that a broad programme of music, commercial events and free public events would be offered to cater for all interests.

There were also initiatives such as £10 or less tickets for main artistic experiences and consideration was being given to how the space could be used by the public and community groups during the day at low or no cost.

The Leader of the Council explained that the Council had worked closely with the Arts Council and the Department for Digital, Culture, Media and Sports (DCMS) and the Minister for Culture had attended the launch of the programme. Members were also advised that whilst there was currently no indication of additional government funding, the Council would consistently endeavour to secure funding for all cultural programmes.

The Deputy Chief Executive and City Treasurer advised that the report outlined the reasons for all cost increases since the project commenced, including the additional £25 million required. This could be split into work package commitments and the works programme, which are confirmed, and the potential costs until project completion.

In summarising the discussion the Chair emphasised the positive aspects of the project. However, he also noted that there had been a number of previous requests for additional funding and that since the NTP there had been significant and expensive changes to the design. He expressed the hope that there would be no further requests for additional funding and that the building would open on time in 2023.

Decision:

That the Committee

1.    notes the report and

2.    endorses the recommendations being made to the Executive.