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Division(s): Oxford South

ITEM EX10

EXECUTIVE - 7 SEPTEMBER 2004

OXFORD CASTLE : HERITAGE INTERPRETATION CENTRE

Report by Head of Property Services

Introduction

  1. The Oxford Castle project includes a new Heritage Interpretation Centre which will be located in the main Historic Buildings on the site comprising St George's Tower, D Wing and the Debtors' Tower together with newly constructed premises to be used as an Education Centre, Café and shop. A new Charitable Trust (Oxford Castle Trust) is to be established jointly by the County Council and Oxford Preservation Trust (OPT). Subject to confirmation of Heritage Lottery Fund (HLF) funding, OPT will be granted a sub-under-lease of the premises and on completion assign it to Oxford Castle Trust which will then take on the responsibility for managing the Heritage Interpretation Centre including the Education facility.

  2. Oxford Castle Limited (the Developer) has responsibility under the Development Agreement with the County Council for completing the renovation of the Historic Buildings and the construction of the new buildings to shell and core state. OPT will then be responsible for fitting out including finishes, services, and fittings, and installation of the artefacts, equipment forming the displays for the Heritage Interpretation Centre to operate as a commercial attraction and educational facility. This is dependent upon funding, primarily from the HLF.

  3. The application to the HLF has been made by the OPT - at the specific request of the HLF. The initial bid was for £1.8million. That was given Stage 1 approval by the HLF but subject to further work being undertaken on the proposals, including a review of the educational facilities. The scheme was worked up with an enlarged Education Centre and various other improvements made in response to comments from the HLF and OPT's consultants. The bid submitted for Stage 2 approval is just short of £3.8 million. It is expected that a decision on the bid will be made in principle by the HLF South East Committee on 15 September but it is possible that the County Council will be asked to underwrite future revenue costs as a condition of any grant.

    4. Heritage Interpretation Centre Business Case

  4. A business case for the Heritage Interpretation Centre was submitted to the HLF with the grant application. It demonstrated that the Centre would be commercially viable subject to the forecast visitor numbers which will be needed for the majority of the income. Attached at Annex 1 is a note prepared by the consultant who acted for OPT in preparing the business case. If the number of paying visitors is maintained at circa 70,000 per year then there should be a revenue surplus. If visitor numbers fall below 65,000 per year then there would be a net operating deficit, estimated at circa £27,000 with visitor numbers at 60,000 per year and circa £36,000 with visitor numbers at 55,000 per year.

  5. The business case accepted that it will take time for the Heritage Interpretation Centre to become established and reach its full potential. The OPT therefore agreed to underwrite any revenue losses for the first five years following opening up to a maximum of £50,000 per year.

  6. HLF have taken advice on the business case from their own consultants. The consultants' report has not been released but it is understood to include concerns about the forecast visitor numbers and recommends that the HLF should base its decision on a more cautious assumption. The HLF will wish to be assured that any scheme which receives grant funding of £3.8million is viable for a sufficiently long period and that there are appropriate protections to cover risks. There has been no direct communication between the HLF and the County Council, and no formal request, but OPT have indicated that the HLF Case Officer has suggested that if the County Council matches the OPT commitment to underwrite revenue losses up to £50,000 per year for five years, then the bid would be more likely to be approved.

    7. County Council Capital and Revenue Support

  7. In order to achieve a successful project the County Council has already incurred substantial expenditure in particular on building and running costs for the site, archaeological investigations, legal and consultants fees, commissioning of the conservation plan etc. and although some of this money is to be repaid by the Developer the net contribution will be considerable. The Council has also contributed to the OPT costs for developing the business case and the scheme for the Heritage Interpretation Centre. A capital contribution has been made for the expanded education facility and it is proposed that revenue funding be provided from Learning & Culture budgets for a Heritage Education Officer to be employed by the County Council but with the role of achieving the educational objectives of the Heritage Interpretation Centre. The Council is providing the site on a long lease and will have a continuing commitment as Head Landlord and under the proposed management agreement. The Council will also provide administrative and financial management support to the Oxford Castle Trust.

  8. The revenue expenditure on the project so far has been funded substantially from the income from filming which was secured during the time between the closure of the Prison and the commencement of the development works and from other revenue budgets. Specific provision has been made in the Capital Programme for the capital contributions. The revenue and capital budgets for the scheme both currently show a surplus in 2006/7 but certain repayments due to the Council are at risk and the forecasts of further expenditure are estimated and could increase. The total combined capital and revenue estimated surplus is currently £312,000.

    9. Conclusions

  9. It is not possible to reliably predict the visitor numbers for the new Heritage Interpretation Centre. They will be dependent upon a wide range of factors, many of them not within the control of the Oxford Castle Trust or the County Council. On the basis of advice given by consultants appointed by OPT the Heritage Interpretation Centre should be viable and that is supported by a commitment by OPT to underwrite any revenue deficit up to £50,000 per year for five years from opening. However, consultants appointed by HLF have taken a more cautious view and it must be accepted that there is a risk that visitor numbers will fall below what is required for financial viability, and further risks that revenue costs for the Centre will be higher than expected.

  10. It has always been one of the County Council's objectives for the Castle site that there should be an appropriate provision of heritage interpretation and education. The Heritage Interpretation Centre is effectively a partnership between the County Council and the Oxford Preservation Trust. In the event that the scheme was not successful then ultimately the lease to the Oxford Castle Trust would be terminated and the County Council would take back responsibility for the Historic Buildings and for providing an appropriate level of Heritage interpretation. The planning condition for the redevelopment of the site require that there is public access to the historic buildings (although it does not require the standard of heritage interpretation facility which is currently proposed).

  11. If during the first five years of operation the Heritage Interpretation Centre made a loss, or there was a prospect of it doing so, then appropriate management action would need to be taken. The County Council will nominate two of the eleven Trustees which will have responsibility for the Centre. All trustees must act in the best interests of the Trust, rather than for any organisations by which they are nominated. In the event that the County Council did provide any further revenue support it should be on condition that the Council receives regular monitoring information on the financial position of the Heritage Interpretation Centre and on future forecasts and management/business plans. The Council would need to be consulted on actions to be taken to avoid any actual or prospective revenue deficit. It is not clear whether the suggestion by HLF is that the Council and the OPT should jointly underwrite all losses up to a total of £100,000. As OPT have already agreed to underwrite losses up to £50,000 per year and HLF appear to be looking for additional protection beyond that, it would be more logical for the Council, if it was agreed in principal to do so, to underwrite losses over £50,000 per year up to a maximum limit of £100,000 (ie a further £50,000) but subject to evidence that by doing so the future viability of the Centre would be secured and that further public money would not be used to support an unviable operation.

    12. RECOMMENDATION

  12. The Executive is RECOMMENDED to consider whether, in principle, in any negotiations with HLF in response to an approach by it or a condition attached to its offer of grant. any additional revenue support should be provided for the Oxford Castle Heritage Interpretation Centre in the event that there is a revenue deficit for the Centre during the first five years of operation, and if so what should be the maximum amount of such support and any conditions attached to it.

 

NEIL MONAGHAN
Head of Property

Background Papers: Nil

Contact Officers: Neil Monaghan Tel: (01865) 815712

August 2004

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