News / Not a grant…not a loan
SHETLAND Islands Council leader Gary Robinson has defended the authority’s decision to provide £600,000 to complete the controversial Mareel project in the face of widespread public outrage.
Previously a vocal opponent of the council’s decision to invest £6.1 million in the cinema and music venue, he voted in favour of the “bridging facility” after a two hour debate in private on Wednesday.
Struggling to explain the exact nature of the payment, Robinson said it was neither a grant nor a loan, but working capital which he hopes the council will get back at some point in the future. “This is not a blank cheque,” he insisted, adding the council would keep a firm hold of the purse strings.
However he said it was vital that the council secure its initial investment by providing the cash to see the building completed.
The council is insisting on a forensic examination of the history of the project, which has gone 18 months and £1.46 million over its original contract.
Mareel’s operators Shetland Arts Development Agency (SADA) and lead contractor DITT are shaping up for a legal battle over who is responsible for the delays.
On Thursday the arts agency said the independent contract administrator has placed the bulk of the blame with the builders, but DITT disputed their statement.
Robinson said it was a close vote on Wednesday, with 11 councillors supporting the spending and nine voting against. Councillors Theo Smith and Mark Burgess declared an interest and did not participate.
The council was being asked by both Shetland Arts Development Agency (SADA) and DITT to provide the money, but public anger has erupted in the face of huge cuts to jobs and services.
“It’s been extremely difficult for the members balancing the request for funding against a backdrop of cutbacks in just about every other council service,” Robinson admitted.
“But at the end of the day we had a £6 million investment and it was very important we protected that investment by making available this short term working capital.
“The members were clearly under pressure, but the council has been criticised in the past by both Audit Scotland and the Accounts Commission for abortive spending and not seeing things through and I think this would be seen as a classic example of this.
“Personally, in spite of all that I have said about Mareel in the past I think we reached the right decision.”
Part of the decision was to insist on some form of security, and after chief executive Mark Boden met Shetland Arts it appeared the council could take over the building if there is a default.
Boden said that the due diligence exercise to review the entire building project had already commenced and a report would be presented to councillors on 20 February.
One issue that will be examined is what information was passed to the council’s development committee via the sounding board that was created to keep a close eye on developments to make sure the project stayed on track.
“I am reassured by my first meeting with SADA’s management that we will be able to work together on the due diligence exercise,” Boden said.
“There is a lot of work to get through in order to be able to provide a comprehensive picture to members in February.
“However, I’m confident that we will find a way to secure the considerable investment of public money that has been made in Mareel.
“We will keep members – and the public – informed as this process goes ahead.”
The full council decision can be found here.
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