New figures released by the The Piece Hall Trust has revealed an £897,000 deficit in the second year of operation. – but the value of the restored Halifax landmark to Calderdale’s economy is proving greater say its bosses.
Trustees say the deficit, shown in the annual accounts for the year ending March 31, 2019, was expected and exactly in line with the planned budget for the year, and the Grade I listed building is having a far wider impact economically and culturally for the town and the borough than the bare figure can demonstrate.
In short, the subsidy from the public purse is well worth it, they argue.
The Trust’s annual report and financial statements add context and indicate the former 18th century cloth hall, restored for £22 million and re-opened after three years of work in August 2017, is bringing visitors to the borough in increasing numbers, in turn starting to benefit wider Halifax and Calderdale businesses, with the Piece Hall, its attractions and the businesses it houses acting as the economic driver for the borough funders, including crucial support from Calderdale Council intended.
Trustees are increasingly confident, given improvements made throughout last year, that progress is in line with the revised five-year business plan drawn up consultants PwC after year one and operations honed to meet forecasts based on reality rather than projections.
Significant increases in income arose due to music events, more units being let and a restaurant opening in November 2018.
This is while keeping the building free to enter – many comparable heritage attractions charge entry fees.
But Chair Roger Marsh and Chief Executive Nicky Chance-Thompson highlighted in their joint summary that to remain free to enter the Piece Hall will be likely to need an ongoing financial commitment from the council and other public funding sources going forward.
Mr Marsh says: “Much has been made about the Trust’s ‘losses’, but these initial losses were planned for.
“The Trust Board and Calderdale Council signed up to this model to kick-start the town’s regeneration.
“Our aim in time is to move towards break even but it’s clear, in line with other heritage and cultural assets we will always require some form of public funding support to remain free to enter.”
Mr Marsh has previously pointed out that to “mothball” the Piece Hall would cost as much annually as eventual operational costs – and without the millions of pounds of economic benefit it is bringing to the wider economy.
Ms Chance-Thompson said the Trust were set the task of raising the Piece Hall’s profile and being a catalyst for wider regeneration.
“On both counts we have more than delivered and been recognised by Historic England for having an exemplar business model.
“We will continue to work towards our long-term ambition of breaking even whilst remaining free to enter and delivering maximum benefit to the Calderdale economy and its residents,” she said.
Commenting on the report, Leader of Calderdale Council – which is a key backer of the Trust – Coun Tim Swift (Lab, Town) said there was no doubt six million visitors’ footfall since re-opening had benefited the rest of Halifax and The Piece Hall was having a profound effect on the economy.
“We look forward to seeing the continued growth of the Piece Hall and the positive impact it will continue to have for Calderdale residents and businesses,” he said.
The report argues the deficit has to be balanced against economic benefits outlined in recent analysis trustees commissioned from Bradshaw Advisory.
The economic report showed having 2.5 million visitors through its gates in 2018-19, way ahead of the 1.6 million predicted, has had an economic effect on the local economy to the tune of £26 million since August 2017, more than paying back the regeneration costs.
In everyday terms, said the Bradshaw paper, it boils down to annual investment needed from the public purse to the Piece Hall comparable to the price of a cup of coffee per resident.
The report accompanying the accounts says: “Analysis followed the official HM Treasury ‘Green Book’ approach and was carried out by former senior HM Treasury economists.
“The research found that every £1 spent operating the Piece Hall was generating £5.30 for the local economy, which is well in excess of the £2 per £1 the Treasury judge to be a good return on investment.
“The economists stated that the results were ‘extraordinary’. The analysis also revealed that since the building re-opened and the Trust took on the day-to-day management, £26 million of economic benefit had been delivered to the local economy, more than paying back the regeneration costs of £22 million.”
Trustees feel that when the first year’s financial statements were issued not enough explanation was given to give context and that since, as outlined in the economic report, the true value of the Piece Hall to Calderdale can be better assessed.
The 2018-19 deficit is around £40,000 higher than last year but after opening from a “standing start” in 2017-18 improvements should be seen when initial problems have been fully ironed out.
Mr Marsh and Ms Chance-Thompson explain in the report of the original ten-year forecast: “The Piece Hall Trust Plan forecast that over a ten-year period the charity would be at beast breaking even, but only if all operating conditions were consistently favourable and all assumptions proved correct.
“Since the building had not ever been operated in this way, and that the model was so unique, there was no blueprint to adopt…
“…In some cases initial forecasts were significantly different from the reality we face today due to the project opening six months late, much higher utility and maintenance costs as a result of unique building conditions, as well as increased mandatory security requirements which were put in place following the Manchester Arena bombing in May 2017.”
Now generating 77 per cent of its income from its own operational activities – £2.4 million of the year’s £3.3 million cost – the Piece Hall has shops and businesses in all its units, with the Trust’s own team set to vacate their own units so some of a 30-strong waiting list can be accommodated.
Nudging the 80-20 percentage split in favour of its own income generation, this compares with Historic England’s model of a 60-40 split and is considered exemplar, says the trustees’ report.
Increased Christmas 2019 period trading averaging around 17 per cent up on the previous year and with an ever more finely tuned programme of events ahead, including more showcase music concerts by the likes of Kaiser Chiefs, Richard Hawley and The Specials, the Trust is in a strong position going forward, said Ms Chance-Thompson.
The report says that the running costs of around £6,000 a day for the 16-hours a day, seven days a week operation are cheaper than York Minster (£23,000), Leeds Grand Theatre (£40,000) and the Hepworth Gallery (£9,500).
The Piece Hall is also fulfilling its cultural remit with a programme of events ranging from free to enter community and arts showcases to top music attractions and has been featured on
Government posters and publications, recognising its increasing national and international appeal, said Ms Chance-Thompson.