Afternoon:
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Why does the Southbank need another £16.5 million?
Norman Lebrecht23 Jun 2010
Tell me - I ask Michael Lynch, outgoing chief executive of the Southbank Centre - why your £16.5 million bail-out is not a major public scandal?
Lynch, an agreeable Australian, does not usually flinch from direct questions - but there are points in our conversation where a prefatory stutter betrays his unease and an aide has to call back later to correct one of his statistics.
Last June, Lynch triumphantly brought in the restoration of the 1951 Festival of Britain site "on time and on budget". The Royal Festival Hall reopened with better acoustics and user facilities, and the new bars and eateries on its ground-level concourse drew a heavy flow of passing trade.
Rental from these busy outlets reduced the need for public funding from 60 per cent of the Centre's budget to 47 per cent, and intensive programming has kept interest levels high.
Ride a bus across Waterloo Bridge any night of the week and you cannot fail to be impressed by the surging throng about the venue.
Much of this could be credited to Lynch, who joined in 2002, and his former chairman, Lord Hollick, a Blair crony who has since made way for a Brown- friendly financier, Rick Haythornthwaite.
All seemed hunky-dory on the Southbank as next season's plans were confidently announced last month. But soon after, in a press statement, it was announced that Arts Council England (ACE) had agreed "an additional package of £16.5 million ... to cover the final costs of the renovation".
So the Southbank wasn't on budget after all, and there is no guarantee it won't be coming back for more. In what way, I ask Lynch, is this not a scandal?
"We had been talking to the Arts Council for two years about a top-up," he concedes. "The tricky issue was the final cost of the building. We negotiated a settlement to get rid of the builders' claims [that always ensue when a building is finished]. That put us 6.5 per cent over budget - about £7.2 million."
But £7.2 million is a big red smudge on a £110 million bill, even if much of it is due to the asbestos that was found - surprise, surprise - in the cladding of a building designed in the post-war asbestos heyday. That, however, turned out to be one of the lesser oversights.
The second chunk of the ACE package, £4.2 million, is "a contribution to operating costs over three years". What does that mean? "We have a third more public space," explains Lynch. "The hall is now air-conditioned and energy costs are going up. There are 65 per cent more visitors to the site - 18 million walking past in a year - which requires more waste clearance, more water. We hadn't planned for that."
Hang on a minute: you spend a hundred million pounds and you don't expect more people to turn up and breathe cooled air? "Not that many," says Lynch unhappily.
The third tranche of ACE cash, £5 million, is "a three-year investment in the development of programming". Explain that, please. "It's for things like Messiaen and Stockhausen and the literary festival we're putting on."
But the BBC are doing Messiaen, Stockhausen and a literary festival in the Proms without an extra penny on the bill, I protest. Lynch mutters something about the money enabling the Southbank "to do more events for free".
You have to appreciate how carefully money is husbanded in arts companies to understand the magnitude of a £16.5 million shortfall.
It is similar to the figure the Arts Council once threatened to withhold from English National Opera when their sums didn't add up, which would have shut them down. It is two years' worth of public subsidy for all the London orchestras put together. It is 100 times the amount ACE slashed from the London Mozart Players this year, threatening their survival.
It is a sum beyond the computation of anyone in the arts outside five big beasts - the Royal Opera House, ENO, the National Theatre, the RSC and the Southbank Centre, the last of which enjoys a special relationship with ACE and New Labour. When I ask Lynch if his new chairman had made the extra cash a condition of accession, he says tightly: "I can't get into that."
The real causes, he insists, were an early failure to seek more National Lottery money and a lack of interest on the part of corporate London to invest in artistic success. The Lincoln Center recently thanked hundreds of corporate partners in a New York Times advertisement for helping its refurbishment. The Southbank had 40.
"That's the biggest disappointment for me," says Lynch, who has agreed his departure date for next April. His personal remuneration for the massive task has been relatively modest: he earns £100,000 less a year than ROH boss Tony Hall.
Were it not for the £16.5 million black hole, Lynch could have flown home to Sydney next year with a friendly wave and the satisfaction of a job well done.
But the return of the begging-bowl puts the Southbank back to where it was before he arrived, a special Labour Party protectorate with a £14 million payroll and a taste for living beyond its means.
"Without the new money," reflects Lynch, "we'd have to cut back what we do, denude the experience for visitors, eliminate education programmes." Nobody wants that, I assure him.
"I absolutely disagree that there is anything scandalous about it," declares Lynch with sudden vehemence. "We created a great hall. We have demonstrated success. We have never gone to government before to be bailed out.
"This is going to be a fabulous place for 25 years. The money puts us in a better position to do what we set out to do."
I hope he's right - but the rescue deal cuts deep into the credibility of Britain's biggest arts centre and the transparency of its governance.
After this, some will surely question whether the Southbank can be trusted to remain standing on its own two feet in a steadily worsening economy.
