The Public teaches ACE a lesson

The view of a Parliamentary Select Committee that West Midlands arts building ‘The Public’ was a “gross waste of public money”, which arose due to failures of leadership at the Arts Council (See AP234)  has been largely endorsed by consultant Anthony Blackstock, former Chief Finance Officer at the Arts Council, in his examination of ACE’s role and performance as one of the public funders of the project. Commissioned by ACE in relation to comments by the Select Committee on “the inability of the current Chief Executive to provide answers to our questions [about The Public] or demonstrate any serious attempts to learn lessons from the failure of the project”, the report also documents the measures it has put in place to prevent such a scenario arising again. It also makes recommendations about future practice, some of which have been embedded in the ACE’s new Capital progamme which was launched last month. Blackstock clearly lays the blame for The Public debacle at the feet of senior postholders at ACE who have now left the organisation, thereby attempting to set to rest the concerns raised by the Select Committee about ACE’s current leadership.

The financial disaster at The Public, to which ACE contributed capital grants of £31.8m, is attributed to a wide range of management shortcomings, but in particular the failure of ACE to withdraw its funding commitment when the extent of the problems became apparent. It’s lack of confidence in the leaders of The Public led to it becoming a shadow promoter of the project, which took away unambiguous responsibility from the organisation; no demand was made for workable artistic and economic model for the construction and operation of the organisation; and ACE failed to heed advice from its many external advisers to reject the application until convincing assurances were given. It also failed to take a legal charge on a building to enable it to recover its grant if the building had to be sold. The report speculates that such failures “reflected an erosion at the time of the ‘arm’s length principle’… [ACE] was too keen to meet Ministers’ social agenda and it had ample funds to do so.”

ACE’s new Capital scheme includes a “much more robust test of the capacity of the applicant’s leaders and its processes of governance”, a feature which Blackstock suggests should be “non-negotiable and indispensable. Failure to convince must lead to rejection”. A “credible artistic and business plan based on plausible assumptions” is now essential, and a new requirement is for the applicant to have secured 90% of its partnership funding from non-Arts Council sources before construction can begin. ACE is also being careful to limit its funding to the strict criteria set out in its published strategy, requiring new scheme proposals to demonstrate how they will do this. Among Blackstock’s recommendations is that ACE should define the critical point in a capital project as being the decision to start construction: up to that point it should be free to withdraw from plans even if the project has consumed high design costs. He concludes by commending ACE for strengthening its processes: “There is no current evidence of failure of process or resolve.”

Responding to the report, ACE Chief Executive, Alan Davey, said: “we can see that while the then Arts Council acted with the best motives, it took some decisions that we now see to be flawed. We have learned from this and I believe the issues highlighted in Anthony’s report with this particular project have been addressed in the time that has elapsed since the project was undertaken.”