Annual accounts filed by the Manchester theatre show its reserves dwindled to less than a month of operating costs, while Arts Council England has raised its risk rating.
Adrian Lambert
Contact Theatre in Manchester recorded a deficit of £980,000 for the last financial year amid ongoing financial concerns.
Figures published by the Charity Commission show that for 2022/23 the National Portfolio Organisation had income of £1.66m but spent a total of £2.64m. It is the second consecutive deficit it has reported after spending £2.49m against income of £1.98m - a deficit of £510,000.
The charity's annual report reveals that it ended the financial year with free reserves of £26,420, equating to less than one month of operating costs, with that figure continuing to drop into the 2023/24 financial year. It adds that Arts Council England has raised its risk profile from "low" to "moderate".
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Publication of the annual report comes five months after the charity announced the introduction a new leadership and business model, with Artistic Director Keisha Thompson switching roles and cutting her hours to one day-a-week as part of efforts to tackle rising costs.
The report states that inflationary pressures on the cost side, combined with "commercial and fundraising setbacks" had resulted in a greater deficit than anticipated.
"The funding landscape has, in this financial year, been similarly challenging and our applications for both restricted and unrestricted funds face more competition than ever.
"Navigating this, whilst transitioning into a newly opened building has proved complex, however both the Board of Trustees and senior management team have acted swiftly and proactively, often having to make difficult decisions to ensure the financial stability of the organisation."
It adds that the organisation is focusing on ways generating income "in order to build resilience and reflate reserves gradually".
'Resilience and sustainability'
Writing in the report Bella Ikpasaja, who was appointed Chair in November 2023, said efforts to find opportunities to rebuild reserves and adapt to the economic landscape are ongoing.
"Contact has worked hard to create resilience and sustainability throughout the organisation's resources," she said.
"A redesign of staffing structure and devising of new staffing roles took place in March 2023... to ensure Contact’s activity serves its community as best as is possible as well as capacity building within the development and commercial teams.
"Continued review of the economic landscape has led to a further refining of Contact’s staff structure which was carried out in the latter part of 2023."
Artistic Director Thompson resigned in December 2023 though her artistic role continued until March 2024.
Other staffing changes, following resignations up to the end of last year, allowed Contact to restructure and avoid making redundancies.
Jack Dale-Dowd was appointed as Interim Executive Director to oversee the next 12-18 months, while the report states that implementation of technology and digital support across working practices has been "vital in supporting staff and finding new and robust ways to work".
"The impact of the rise in cost of living and inflation has created further challenges to Contact's staff, with whom the organisation continues to reflect with on how we can further improve working experience," Ikpasaja said.
"Reviewing of the artistic and participation program is ongoing, with efforts to find further opportunity to rebuild reserves and adapt to the economic landscape, whilst maintaining our commitment to our vision, mission and values."
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