APPENDIX 2
Memorandum submitted by Glasgow Science
Centre
PROJECT OUTLINE
A resume of the Glasgow Science Centre project is
given in the attached document[1].The
project was originally conceived and developed by the Glasgow
Development Agency, a local enterprise company within the Scottish
Enterprise Network. However, ownership and control has subsequently
passed to the Glasgow Science Charitable Trust, a company limited
by guarantee with charitable status. It is the Trust which is
the recipient of Millennium Commission funding.
ROLE OF
MILLENNIUM COMMISSION
The relationship with the Millennium Commission
has been quite different pre and post grant award. Prior to the
award, the relationship was a little difficult and, from our perspective,
this was a result of a number of factors:
— The insistence of the Millennium
Commission that it should be the funder of last resort and the
resulting clash with European Commission rules.
— The Commission's pre-occupation with
the capital side of the project to the exclusion of revenue matters.
— Insufficient practical experience
of "project management" amongst senior Commission staff.
— Major inconsistencies in the treatment
of different projects across the UK.
Since the award of grant, however, the Commission
has struck a different posture and has been effective in balancing
the need to be an external funder and independent arbiter with
the need to work in partnership to secure a successful project.
Monthly monitoring and administration systems
appear to be working well and Commission staff have generally
been helpful and timeous in their responses to specific matters
arising. Payments are generally received as scheduled.
Clearly, the Commission has encountered problems
over the last couple of years with a number of major schemes.
As a result, it does have a tendency to put all projects through
the same hoops regardless of whether this is totally necessary.
There are times when complying with these demands conflicts with
the general pressure of work involved in managing a project of
this complexity and timescale. A better system of delegated authority
might have been worth considering.
PROJECT BUDGET
At the time of the original application under
Round 1, the application was for £41.1 million out of a total
project cost of £92.3 million. The eventual award, from Round
3, was for £35.0 million out of a total project cost of £71.5
million. No additional Millennium Commission funding has been
sought subsequent to the award.
The latest capital cost and funding for the
project is as follows:
| £m |
| Millennium Commission | 35.0
|
| ERDF | 19.7 |
| Scottish Enterprise | 15.6 |
| Private | 3.8 |
| Total Cost/Funding | 74.1 |
| |
The rise in the capital budget from £71.5 million to
£74.1 million is due to two factors:
— The provision of additional land by Scottish Enterprise
for the car park.
— A pledge of £3 million received from the
Wellcome Trust.
PROJECT TIMETABLE
At the time of the Millennium Commission's in principle grant
award in November 1997, it was anticipated that the project would
be completed by Easter 2000. However, the protracted nature of
subsequent negotiations with the European Commission regarding
ERDF monies meant that final confirmation of funding was not received
until December 1998. During these negotiations, it became clear
that a year 2000 opening would not be possible and the decision
was taken to aim for an Easter 2001 opening.
Since formal funding approval, the project has proceeded
to schedule. A phased opening has always been planned in order
to maximise market impact. The Imax theatre will therefore open
at the end of September 2000 whilst the main building will open
at Easter 2001. There is a possibility that the Tower could be
open ahead of schedule for Hogmanay 2000 and a decision on this
will be taken in June. In this regard, GSC has been in discussion
with Glasgow City Council and the Millennium Commission concerning
possible funding for a family orientated Hogmanay event to coincide
with the completion and lighting of the Tower.
LONG-TERM
VIABILITY
There are well over 500 science centres around the world
and not one operates at a profit. Indeed, very few cover more
than 75 per cent of their costs through earned income. In spite
of this, it was made absolutely clear to GSC from the outset by
all funders that no on-going revenue support would be available.
Ensuring long-term viability has therefore been the most crucial
and testing aspect of the project.
Market analysis suggests that the three elements of the Centre
should attract a total of 625,000 visitors per annum. The original,
detailed business plan submitted to potential funders showed that,
at this level, the Centre would make a trading surplus of approximately
£0.5 million per annum. However, this is before exhibition
renewals which are absolutely essential if the all-important repeat
visits are to be secured. The Science Centre plans to spend approximately
£1 million per annum on renewals, thus turning the trading
surplus into a £0.5 million deficit.
In most science centres, renewals have to be funded by sponsorship,
donations and other unearned income and GSC will have an on-going
fund-raising and development campaign. However, the problem with
this approach is that the results cannot be guaranteed or confirmed
sufficiently in advance to facilitate forward planning.
Rather than rely entirely on future fund-raising, GSC for
the outset proposed the creation of an Endowment Fund, the investment
income from which would help to cover renewal costs. At the time
of the initial application to funders, an £8 million Fund
was proposed but the target was subsequently raised to £10
million. Depending upon interest rates, this should give a sufficient
return, whilst safeguarding the capital value of the fund, to
underpin the long-term viability of the Centre.
To date, £8.5 million has been raised and a further
£1.5 million is under negotiation. Scottish Enterprise has
agreed to contribute £4 million from the sale of adjacent
land holdings promoted by the development of the Science Centre.
A further £4 million has been awarded by Glasgow City Council
and £0.5 million has been raised from a charitable trust.
The remaining £1.5 million is the subject of a capital leasing
scheme currently being negotiated with Royal Bank Leasing.
A Glasgow Science Centre Endowment Fund Trust has been established
to control the Fund and Schroders have been appointed as Fund
Managers.
June 2000
1
Not printed. Back
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