Updated story: The trust running the troubled Woolwich Works venue is to be offered £2m in interest-free loans from Greenwich Council to keep it afloat – and has been told to bring the punters in with more commercial programming.
More than £45m has already been spent by the council in setting up the cultural centre next to the Thames as well as refurbishing other buildings so they can be used by the immersive theatre company Punchdrunk. The main Woolwich Works venue also includes recording and rehearsal studios.
Woolwich Works opened in September and was supposed to break even within its first year. But ticket sales have been disappointing and the council now admits that the original business plan for the Woolwich Creative District Trust is “no longer realistic”.
Sarah Abley, the council’s culture and communications director, said in a report to Greenwich Council leader Anthony Okereke that “the potential for a hugely successful venue remains and can be realised with extra support”. The trust does not have to start repaying the 15-year loan until 2026, while the decision to make the loan interest-free could cost up to £315,000.
Greenwich is blaming the delay to Crossrail, the aftermath of the pandemic – which led to the venue opening a year late – and the cost of living crisis for Woolwich Works’ woes. But it is also temporarily changing its lease agreement with the trust to encourage more commercial programming to help pay the bills.
The council had set key performance indicators – which have never been made public – designed to ensure the local community got the most out of Woolwich Works. Those will now be suspended to allow it to recoup its losses.
Okereke is also demanding the trust offers 1,000 £1 tickets to major shows every year to target those who would not otherwise attend the venue, 50 free hours of studio time for community groups, and up to six days’ free hire of the performance spaces for council events.
While well-received by critics after its opening, Woolwich Works has always been a controversial topic within the council. Many councillors were wary of its publicised £31 million budget, but rumours began to swirl of a big overspend – branded by the then council leader Danny Thorpe as “fake news”.
But the final bill was confirmed at £45.6 million last October, not including the cost of buying leases to the buildings.
There also remains ongoing bad feeling about the closure of the Greenwich Heritage Centre to accommodate Woolwich Works, with the council’s archive now in a warehouse in Charlton.
The report reveals that the wheels were falling off the Woolwich Works business plan while councillors were demanding to see it last December, even threatening to obtain their own legal advice.
“The Woolwich Works business plan was developed in a pre-pandemic world,” the report reads. “It was an ambitious plan that predicted audience levels based on contemporary, real-world statistics and the promise of a new rail link that would be operating long before the venue’s doors opened to the public. Breaking even in the first year was considered to be within reach of a venue set to be of international standard.
“The reality has unfortunately proved to be significantly different from the vision.”
The report also cites Professor Chris Whitty’s warnings about the Omicron variant of Covid-19, saying that ticket sales “fell off a cliff” after the chief medical officer for England suggested that people act with caution if they planned to spend Christmas with their families.
“Ultimately the venue being able to meet the targets and operating levels of the original business plan was no longer realistic,” it says. “In the same way that established venues around the world were being hit, Woolwich Works was not able to generate revenue through ticket sales, bar sales or commercial hire as anticipated.
“Attendance figures have still not fully recovered and are now complicated by a cost of living crisis which will inevitably see people redirecting funds to essentials such as food and energy costs. These same price increases are also impacting Woolwich Works.”
Two Greenwich Labour councillors – Nick Williams (Greenwich Peninsula) and Majid Rahman (East Greenwich) have already called in the decision for further scrutiny, in what appeared to be a co-ordinated move to coincide with its publication.
“Woolwich Works offers so much potential and benefit for Greenwich, but given the amounts involved in the middle of the Tory cost of living crisis, it’s important that scrutiny plays its role as a critical friend and safeguards taxpayers’ money,” Williams tweeted.
Opposition Conservative leader Matt Hartley also asked for a call-in. He told 853 that councillors should be able to scrutinise the venue’s business plan before any loan is made.
“Given the huge amount of taxpayers’ money that Labour councillors have already sunk into Woolwich Works, it is in everyone’s interests to make sure it succeeds,” he said. “However, there are important questions that need answering before the council presses ahead with this bailout.
“I have requested that councillors be provided with the Woolwich Creative District Trust’s full business plan, so this can be fully scrutinised on behalf of Greenwich taxpayers. There also needs to be a discussion of how the council will manage the financial risk created by this loan of up to £2 million, and further scrutiny of the council’s decision to charge no interest over the 15-year loan term – particularly as this bailout will come with a £315,000 price tag to local taxpayers even if the loan is fully repaid.”
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