City leaders beg for help as Glasgow Life faces £38m black hole

In a blunt begging letter, council leader Susan Aitken and her deputy David McDonald warned that charity Glasgow Life – which manages the city’s culture and sports facilities – was already facing a shortfall of “tens of millions of pounds” in commercial income from both venues and events.

The Herald understands the financial black hole could be as big as £38 million this year – posing a significant and long-term threat to services crucial to the pulling power of the Scottish economy and tourism industry.

Ms Aitken and Mr McDonald wrote: “While Glasgow Life is committed to doing all we can to continue to deliver as much as possible of our extraordinary cultural output, it is increasingly clear that we will struggle to do so without support from central government.

“The income generated through concert tickets and donations supports Glasgow Life services and all of it has stopped completely. Currently, we predict a shortfall of income running into tens of millions of pounds.”

The fears of Glasgow’s leaders for its artistic and sporting heritage – including its Royal Concert Hall or Fruitmarket with their annual half a million visitors – come as it becomes increasingly clear the sectors are being devastated by the pandemic.

Yesterday, The Herald on Sunday revealed some performing arts venues will be forced to raise ticket prices to cut the risk of Covid amid concerns there is “no such thing as a socially distant theatre”.

At the beginning of this month, Ms Hyslop announced £10m in targeted support for performance arts venues. The UK Government has pledged another £97m to help keep the arts in Scotland afloat.

Sector insiders do not believe this money will be enough, as the scale of Glasgow Life’s financial problems demonstrates.

The charity receives about £75m a year from the council to deliver its core services. But it supplements this core funding with fees for everything from swimming pools and gyms and admissions to concerts and events. Its famous museums do not charge visitors but partly make up for this with money from gift shops, cafes and one-off special exhibitions.

Glasgow Life is understood to have offset some of its fixed costs by furloughing hundreds of workers involved in this commercial operation. But it has to cover the full wage bills of its core workers.

In their letter, Ms Aitken and Mr McDonald, who chairs Glasgow Life, stressed that Glasgow was far more economically dependent on its arts and sports sector than other parts of Scotland.

Moreover, city spending on arts and sports delivers a dramatic multiplier effect.

The city leaders wrote: “Since 2013, tourism to Glasgow has grown from 1.9 million to 2.5 million visitors. Spend has grown from £482 million to £774 million over the same period, helping sustain more than 30,000 jobs in the city.

“One of the major draws for tourists to our city is our world-class civic collection and museums service.

“More people visit Glasgow’s museums each year than in any other UK city outside of London, with visits reaching more than four million last year. Our museums service is perhaps the most efficient and effective in the country, delivering nice museums on a budget of £12 million, with no national funding: compare that to the National Museums of Scotland’s £27.7m budget from Government and 2.7 million visitors annually."

Ms Aitken and Mr McDonald also stressed the value of live music. Glasgow is behind Manchester and London for music tourism but its concerts still generate £75m from visitors to the city every year, they said.

Earlier this month Glasgow Life published a schedule for re-opening its venues. Only a third were included in its first phase. Kelvingrove will open its doors in the middle of August; the riverside transport museum at the end of the month; losing all the income they would have received during the school holidays.

This echoes a nationwide pattern. The Association of Scottish Visitor Attractions last month found that nearly half of the nation’s museums, galleries, castles and other historic sites may remain closed until 2021.

Normally 18 million people would go through the doors of Glasgow Life venues every year.

Mr McDonald told The Herald: “We have always had a great working relationship with the Scottish Government but now we’re asking them to step up more, to ensure that the huge contribution Glasgow Life can make to Glasgow and Scotland’s economic and social recovery is fully realised and not held back by the unavoidable financial challenges that have resulted from this global pandemic and lockdown.”

The city council has been supporting Glasgow Life through the lockdown and is getting some extra money from central governments to cope with extra Covid costs.

Insiders stress that local authorities across Scotland have lost substantial revenue while their commercial centres were closed. Glasgow’s council-owned City Parking already operates at a loss. But during the lockdown it stopped charging for parking as it tried to help key workers get to their jobs safely. Its very future as an arm’s-length body is now up for debate, insiders say.

A Scottish Government spokesperson said it is a “hugely challenging and concerning time" for those in the culture and heritage sector.

"We are doing all we can to support them during the Covid-19 pandemic," added the spokesperson. “Yesterday, we announced a new £4 million Resilience and Recovery Fund for independent museums and we continue to have discussions with Museums Galleries Scotland to understand the support needs of the wider sector, including local authority museums and arms-length external organisations, such as Glasgow Life, which face future funding challenges.

“We are also working closely with other cultural and heritage funders to ensure a co-ordinated response.”