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ITEM EX12

1. The Executive on 7 September 2004 agreed that the operation of Pegasus Theatre should be fully externalised from the County Council to the independent Pegasus Theatre Trust (PTT). It gave permission to the Pegasus Theatre Management Committee, a separate body from the PTT, to wind itself up and transfer its assets, liabilities and responsibilities to the PTT.
2. The PTT were authorised to manage and deliver the next phase of the theatre’s capital and organisational development, for which a contribution of £2.7 million has been offered from the National Lottery.
3. The Heads of Cultural Services, Legal Services and Property Services were instructed to draw up a contract with PTT which ensures the protection of the interests of the Council and Oxfordshire people, and to negotiate the basis for the creation of new property rights to be taken by PTT on 1 April 2005.
4. It was agreed in principle that the existing County Council budget for the operation of Pegasus Theatre would be the basis of a transfer to the PTT as an annual grant. The Executive confirmed commitments in the Capital Programme of £405,000 in 2005/06 and £375,000 in 2006/07, as contributions to the capital development.
5. It was noted that three County Council employees working at Pegasus would be consulted about possible transfer of their contracts to the PTT.
6. The purpose of the present report is to update the Executive on progress towards independence for Pegasus Theatre, and to seek approval for a short-term lease under the Heads of Terms at Annex 1 (download as .doc file). Approval is also sought for the process for approving a longer-term lease once the capital development scheme is completed.

Progress since September 2004

7. The Pegasus Theatre Management Committee was formally wound up in October and its assets transferred to PTT. This included transfer of staff employed by the Management Committee.
8. The PTT have continued to manage the capital and organisational development programme. After competitive tendering processes they appointed architects Fielden Clegg Bradley to lead a design team, and ABL Cultural Consulting as lead consultants and project managers. Together with Pegasus staff and Board members, they are preparing the detailed work required for submission to Arts Council England for approval to proceed. The deadline for this work is now the end of April 2005.
9. The basis for the handover of the site and present buildings has been the subject of negotiation between County Council and WS Atkins officers, and the PTT. It is proposed that initially a short-term lease, based on the Heads of Terms at Annex 1 (download as .doc file), be entered into. Once the new building is completed, this will be replaced by a longer-term agreement.

Financial implications

10. The net operational expenditure budgeted by the County Council for Pegasus in 2005/06 is £65,400. This excludes a further sum of £30,700 which is to be recharged to the Youth Service specifically for the delivery of arts activities with young people. This amount, together with the annual grant from the arts development budget (£15,000) will become the basis of a consolidated annual grant of £111,100 to PTT. Certain additional costs, such as insurance and licensing, still need to be identified within centralised County Council budgets, and an equitable way of dealing with these agreed with the PTT.

Personnel implications

11. The three County Council staff employed at Pegasus have been consulted with regard to their potential transfer to PTT employment, as has the Trust itself. Following this consultation, and after consideration of the best interests of the Council, the staff and the Trust, it is proposed that in the first instance these staff should remain in County Council employment, seconded to the PTT for one year, at the end of which the situation will be reviewed. The secondment will not extend beyond three years. Meanwhile if any of the individuals concerned should vacate their post, that post and its funding would transfer to the PTT.

RECOMMENDATIONS

12. The Executive is RECOMMENDED to:

1. note the progress towards the independent operation of Pegasus Theatre;
2. authorise a short-term lease agreement with the Pegasus Theatre Trust based on the Heads of Terms at Annex 1 (download as .doc file) to the report;
3. authorise a longer-term lease agreement, on terms approved by the Head of Cultural Services, Head of Property and Head of Legal Services, in consultation with the Leader of the Council and Executive Member for Learning & Culture, upon the successful completion of the Pegasus Theatre capital development.

KEITH BARTLEY
Director for Learning & Culture

Background papers: Nil

Contact Officer: Richard Munro, Head of Cultural Services (01865 810191)

March 2005

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