National Portfolio Organisation Déda has entered voluntary insolvency due to financial issues. The announcement follows research from Arts Professional showing that in 2023, NPOs were collectively in the red by £63.1m.
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Derby-based dance company Déda has announced it is entering voluntary insolvency after “enduring significant financial pressures” since the onset of Covid, making it “impossible to continue” operations in its current format.
Founded in 1991, the Arts Council England-funded charity runs a dance and movement venue and is co-producer of the annual Derby Feste festival, which was cancelled this year due to financial challenges.
A statement posted on the company’s website noted that the pandemic had posed “extraordinary challenges” for cultural organisations worldwide and that, despite “best efforts” to recover, audience numbers had not rebounded quickly enough to offset its rising operational costs, placing an “unsustainable strain” on resources.
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Déda said it hoped that, by working with stakeholders and partners, it could find a way to continue and avoid the closure of its venue. But it added that the situation poses the risk of job losses for its 35 employees and will affect artists that use the space.
“We deeply regret the impact this will have on their livelihoods and careers,” said Déda. “We are committed to providing as much support as possible during this transition period and will be working closely with local agencies to assist them in finding new opportunities.
“It is our sincere hope that another cultural organisation in Derby will step forward to continue our dance programme and the good work we have started.”
A petition to save the venue calling for government and local council intervention has garnered over 2,500 signatures.
Financial and organisational issues
According to the Charity Commission, Déda reported an income of nearly £800,000 for the financial year ending 31 March 2023, while expenditure totalled nearly £1.06m.
As a National Portfolio Organsiation, the company was awarded £349,692 annually for the 2023-26 period. It also received £50k a year from Derby City Council, up to and including this year, towards the running costs of Feste.
In its most recent filing to Companies House in December 2023, Déda said it was in a "strong cash position" despite challenges including “astronomical rises” in energy bills.
However, the accounts also hint at organisational issues, indicating concerns about “overall staff morale” after undertaking a “daunting” staff restructure to prepare for rises in expenditure.
The company noted that the cost-cutting exercise “damaged confidence internally” and that “as a team, the Déda staff are currently a fragile construct made up of various emotional states of well-being”.
Meanwhile, Companies House records show that 10 trustees have resigned in the last year. Of four appointed since June 2024, two are Derby City councillors. Former Director Steve Slater, whose tenure began in March 2020, said in his leaving statement - posted a month ago - that he wished the company a future that is “calmer, more prosperous, and creative”.
'Deeply saddened'
Leader of Derby City Council, Nadine Peatfield, said she was "deeply saddened" by the news and that the council was "fully committed" to working with cultural partners, including ACE "in the hope that they can continue their invaluable work".
An ACE spokesperson said it had been working closely with Déda following news of its "financial and organisational issues" to "explore all available options" and ensure "the best outcome in this difficult situation".
“Unfortunately, it has become apparent to the board that they must take the difficult decision to enter into voluntary liquidation," they continued. "We understand how upsetting this will be for their staff, as well as audiences, and acknowledge the impact this has on the local community and organisations who use the building.
“As a funder of the organisation we are in conversation with them about appropriate next steps. We understand that they have engaged insolvency practitioners to assist with this process."
NPOs under pressure
A recent investigation by Arts Professional and financial benchmarking company MyCake found that in 2023, arts organisations making up the 2023-26 National Portfolio were collectively in the red by £63.1m, with nearly one in five reporting expenditure levels 20% or more above their income.
Acknowledging that its NPOs are currently facing an "increased risk", ACE recently offered its regularly-funded organisations the opportunity to cut their activity by 15% to help them deal with reduced income and rising costs.
Also, Derby-based, the cultural hub and NPO QUAD announced last month that it is in "serious financial difficulty", while in 2023, Derby Museums Trust, funded by ACE, commissioned a review of its operations after saying it was having to use reserves to cover operating costs.
Independent analysis by Data Culture Change has shown that Derbyshire and Nottinghamshire's combined areas - collectively known as D2N2 - receive less arts funding per person than the English average on every metric examined.
Despite various government and ACE initiatives to improve the distribution of cultural investment across the country, the data indicated D2N2 has received £10 less per capita in arts funding compared with the average for English regions, excluding London, amounting to more than £21m in lost funding.
Speaking to Arts Professional, Tony Butler, Executive Director of Derby Museums, said: "Between Derbyshire and Nottinghamshire, there's nearly 2 million people. In general terms, the fact that the Arts Council and local government spend less on culture in these cities is quite marked."
Emergency funding
Butler added that Derby Museums Trust now has "a good roadmap for sustainability", including increasing earned income and development of sponsorships. However, he warned that its financial position was still "pretty fragile" and anticipated a need for emergency support at some point over the next 18 months, and not just for his organisation.
"If nothing happens, what has happened to Déda in Derby is just the tip of the iceberg because there's instability in these organisations, and they won't be able to survive. Emergency support is required in the short term, particularly in museums.
"But beyond that, there needs to be a more systemic approach to regional cultural funding, getting more money into the system because when you take out a huge chunk of funding, i.e. from local councils, you can replace it with earned income to a degree, but that's not enough."
For Derby City Council, Peatfield noted that the council had supported organisations such as QUAD and Déda and was working with ACE, East Midlands Combined County Authority and local MPs to explore longer-term solutions.
“However, the cultural sector is in crisis after 14 years of cuts to local government and further support is desperately needed to meet funding gaps," she said. "We have been supporting ACE in their lobbying to government to provide emergency funding relief for cultural venues."
ACE, which invested over £23m in 31 NPOs across Derbyshire and Nottinghamshire in 2023/24, said it will work with all local stakeholders to "support continued investment in Derby's cultural sector", adding: "We will also work closely with funded organisations who are facing financial challenges and be as flexible as we can be in the way they deliver their funding agreements with us.”
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