Rotherham councillors to consider future support for MagnaPublished Thursday, 29th January 2015
Councillors in Rotherham will consider further financial support for Magna to safeguard local jobs – but only if an urgent independent review of the trust’s future business viability is carried out.
A report going to the Council’s Cabinet seeks approval to renew a £250,000 loan to the Magna Trust, to support the organisation with its short-term running costs.
The authority has already agreed an additional emergency loan of £100,000 this month to help the venue cover essential immediate running costs – approved under the Interim Chief Executive’s delegated powers.
Under the terms of that loan, the Council must agree each item to be paid for with the money. Any further support will be contingent on the external review.
Employing 80 people and attracting around 100,000 visitors a year, the Council has supported the venue over recent years as a key part of the local economy.
However councillors must also now consider whether to continue to provide a £250,000 annual loan as the authority has done each year since 2012.
Cllr Emma Hoddinott, Deputy Leader of the Council, said: "As one of the three equal shareholders, the Council has provided significant support to Magna in the past. Magna has loans outstanding to the Council of more than half a million pounds and has not been able to reduce the debt it owes to the Council since the end of March last year.
"Over Christmas, Magna approached the Council to seek further urgent assistance in order to meet a short term cash flow shortfall, and this finance was made available under strict new conditions.
"We are conscious that there are more than 80 people employed by the trust, whose jobs would have been in immediate doubt had provision not been made available. However, we are working closely with Magna on their business plan to assess their future viability."
Under the proposals being put to Cabinet, Magna's business plan will be reviewed by an independent company to assess the future viability of the business.
The Council's Cabinet will consider the recommendations on 4 February 2015.