The mayor of the West Midlands has called for an investigation into the Coventry city of culture trust, which went into administration this week, resulting in the loss of a three-year legacy programme and 50 jobs.
Andy Street said questions needed to be asked of the trust, which was responsible for overseeing legacy projects from the year-long celebration and received a £1m loan from Coventry city council in October.
“We need to know why this happened. This organisation has had a lot of public money. We need to understand exactly how we got into this situation,” he told BBC Radio Coventry.
The event group Assembly Festival, which delivered the Assembly Festival Garden that acted as the centrepiece for city of culture events in 2021, said the trust owed it nearly £1.5m, and called on the council to take responsibility.
In a letter to councillors on Friday, the company director, William Burdett-Coutts, said: “Assembly Festival is a small organisation and this level of debt prejudices our entire future. We believe from both a moral and legal point of view the Coventry council should take responsibility for this.
“Our position should be of concern to you as we did the right thing by the city. Coventry now faces a situation where all the good that came out of the year will be severely marred.”
The trust said it had called in administrators on Tuesday after months of financial difficulties, with 29 permanent staff and 21 casual workers being made redundant.
Its application for a £1m loan from the council cited a “short-term cashflow problem”, and the then chief executive, Martin Sutherland, said he was “confident we’ll raise the funds required to pay this back”.
A report provided to the council at the time said the loan was “not without financial risk” and the trust had only secured 54% of its budgeted income for the legacy period.
Staff members from the University of Warwick and Coventry University quit the trust’s board in protest, with Coventry University saying it was trying to recover funds it was owed by the trust.
A Warwick spokesperson said: “We did not support additional public money being used to keep the charitable trust going.”
Street said he thought the investigation into the trust should initially be carried out by the local authority: “Whether it needs to be a parliamentary inquiry, I would suggest not initially. I would suggest actually proper investigation, probably led by the city council, is the right place to start.
“Parliamentarians will take their view as to whether, for example, the select committee need to look further but we do need to answer the question: how has this happened?”
It was announced last year that Bradford would be the next UK city of culture in 2025, with the then culture secretary, Nadine Dorries, saying: “Coventry has shown us how powerful the UK city of culture title is at boosting investment, attracting visitors and leaving a lasting legacy for local people.”
A spokesperson from Coventry city council said: “The city of culture trust is a separate, independent organisation to which the council had no direct control over. The council has also not provided any form of indemnity or guarantee to Assembly Festival on the sums they have incurred as a consequence of any contractual arrangement they have with the trust.”
“Coventry city council has been clear that it also wants answers at what has happened at the trust.”
