Issue - meetings

To consider the report of the Director of City Development seeking approval to proposals for Leeds City Council to provide a loan to Leeds Culture Trust which will allow the Trust to maximise the amount of funding which it can dedicate to the Year of Culture programme during the year itself, allowing it to deliver its full programme of Signature Events and partner projects during the final season of the year.

(NB. Appendices 1 - 3 to this report have been designated as being exempt from publication under the provisions of Access to Information Procedure Rule 10.4 (3))

The Director of City Development submitted a report which sought the Board’s approval for Leeds City Council to provide a loan to Leeds Culture Trust (LCT) for the purposes of providing cash flow assistance to cover claims to HMRC for both Theatre Tax Relief and Museums and Galleries Exhibition Tax Relief for financial years 2022-23 and 2023-24, with the report noting that any loan provided would be repaid by LCT upon their receipt of Cultural Sector Tax Relief.

In presenting the report, the Executive Member highlighted that the provision of such a loan would allow LCT to maximise the amount of funding it could invest in LEEDS2023 in-year. In addition, it was emphasised that both LCT and the Council had respectively sought their own legal and financial advice in relation to this matter. 

A Member raised concerns and confirmed their disagreement with the proposal, highlighting the risk involved for the Council, in the event that the proposed loan was not repaid.

Members discussed a number of areas relating to this matter including the level of funding which had been provided by the Council towards LEEDS2023 and the impact of national financial challenges upon the delivery of the initiative. As part of the discussion the provision of respective legal and financial advice to both the Council and LCT was reiterated. It was also further emphasised that the loan would allow LCT to maximise the amount of in-year funding it could invest in the programme.

Responding to a Member’s specific enquiry regarding the risk involved, it was acknowledged that there were almost certain risks arising from the Council not providing the loan in terms of the potential impact upon the remainder of the LEEDS2023 programme. Conversely, with respect to the loan, it was confirmed that, although the level of risk to the Council is considered to be low, should the tax relief not be received by LCT, then the return of the monies advanced by the Council would be at risk.

Following consideration of appendices 1 - 3 to the submitted report designated as being exempt from publication under the provisions of Access to Information Procedure Rule 10.4(3), which were considered in private at the conclusion of the public part of the meeting, it was

RESOLVED –

(a)  That approval be given for Leeds City Council to provide an unsecured interest free loan to Leeds Culture Trust to a maximum value of £1,845,407 which would, subject to the resolutions below, be payable in 3 instalments;

(b)  That approval be given for Leeds City Council to pay a first instalment of £960,831 to Leeds Culture Trust in October 2023 for a term of up to 6 months, in order to cash flow the Trust’s Theatre Tax Relief claim for the financial year 2022-23;

(c)  That in principle approval, which is subject to further due diligence on LCT’s financial position in November, be given for Leeds City Council to pay a second instalment of £366,571 to Leeds Culture Trust in November 2023 for a  ...  view the full minutes text for item 44