LEISURE: Finances come under scrutiny

Coun Ian Auckland compared it to holiday company Thomas Cook, which recently went into liquidation.

He said: “There are shades of Thomas Cook here. You are taking in cash well in advance then spending it and when the money is required you have run out of road.

“Should I be concerned about their business model and the competitive pressures they face rather than austerity got us here?

“Is it normal to take money people are handing you for events and just treat it as cash flow? Surely that stores up problems when you need that money for events?”

Ryan Keyworth, director of finance and commercial services, said the two issues which really mattered were the trust’s operating cash flow – the money that goes in and out on a daily basis – and the ticketing cash flow.

He said: “There is a huge timing difference that can exist between selling a ticket for a tour by an international artist and the cost of actually supporting that event. That can create some significant and difficult to predict and manage cash flows.

“Grant Thornton accountants were commissioned to do a piece of work and reported that the trust were not putting sufficient focus in their board meeting on cash flow and their reporting mechanisms were not as good as they could be.

“The trust have since taken steps to improve that and we have seen evidence of it being much improved in recent weeks.”