Coventry City of Culture Trust enters financial administration

Coventry City of Culture Trust has entered administration after weeks of financial difficulty.

On 25 February, The Charity Commission announced that it would be looking into the group, opening a compliance case after it was revealed that the Trust had held talks with administrators.

Three days later, the organisation announced it had appointed administrators, throwing into doubt the future of a three-year legacy project intended to capitalise on Coventry’s status as City of Culture 2021.

It is currently unknown how many partners to the programme will be affected. Meetings about commissioning future projects have been cancelled and there are no events listed on the Coventry 2021 website.

All 50 staff at the trust have been made redundant by the administrators and work has started on realising the charity’s assets.

We have not been able to find a solution to secure the future of the trust

– Coventry City of Culture Trust

The Trust said: “We have been working to find solutions to the trust’s financial challenges and to secure the future of the trust’s legacy programme, including The Reel Store. Despite the efforts of all involved, we have made the incredibly difficult decision to move to the appointment of administrators today.

“We know that this news is devastating for many, particularly for team members and partners. We are also regretful of the impact this will have on the organisations and businesses involved. We have not been able to find a solution to secure the future of the trust.

“However, we have continued to work closely with those who had pledged legacy funding, to try to protect those funds for the city and its cultural organisations. Details of these arrangements are not finalised, but we expect this to be clearer in the next few weeks.”

Last year, Coventry City Council (CCC) provided a £1m loan to the Trust to help with a “short-term cashflow problem”. A report provided to the council at the time said the loan was “not without financial risk” and the trust had only secured 54% of its budgeted income for the legacy period. Staff members from the University of Warwick and Coventry University quit the Trust’s board in protest.

We need to understand exactly how we got into this situation

– Andy Street, Mayor of the West Midlands

Councillors were briefed last month that the loan was unlikely to be repaid.

The Assembly Festival, which ran the Assembly Festival Gardens, has called on CCC to pay out £1.5m it is owed by the Trust, saying its future was at risk and the council should “take responsibility both from a moral and legal point of view”.

Andy Street, the mayor of the West Midlands, has called for an investigation into the Trust: “We need to know why this happened. This organisation has had a lot of public money. We need to understand exactly how we got into this situation.”

A spokesperson from the Department for Culture, Media and Sport said the government was “monitoring the situation” and “hopes to see local partners continue to work on the legacy of Coventry as City of Culture 2021”.