Leading conference venue due to endure £1.6m record losses

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RECORD losses are expected to be made at Harrogate’s showpiece conferencing venue in the latest blow to the spa town’s multi-million pound industry amid warnings more jobs could go.

The latest financial forecasts for the Harrogate International Centre (HIC) have painted a bleak picture over the coming 12 months with a predicted loss of nearly £1.6m.

The HIC, which is owned and operated at arm’s length by Harrogate Borough Council, has been blighted by a downturn in trade in recent years as conference organisers have either cancelled or scaled back events due to financial constraints.

But the council’s leader Don Mackenzie stressed a wide-ranging marketing campaign will be staged in the coming financial year in a bid to attract major events to the HIC, which is credited with generating up to £100m for the wider regional economy each year.

However, he admitted that while the majority of job losses have already been enforced, more posts could go at the HIC.

A further 20 posts, the majority of which are already vacant, are being deleted at the council itself as the authority attempts to balance its budget for the new financial year.

Coun Mackenzie, who is also the chairman of the HIC’s management board, said: “We are experiencing problems which are being felt across all the conferencing and entertainment industry, where business has fallen off a cliff and reduced dramatically.

“One of the biggest issues is that we are a district council and not a big metropolitan authority, so any fall in income from the HIC will hit us hard.

“But I am hopeful this is the worst that it will get, and we will be making every effort to attract new business and sales for the HIC.”

The HIC recorded annual profits of up to £2m when the economy was booming, but it has seen a dramatic decline in recent years.

The HIC had been forecast to register a £600,000 loss in the current financial year, but it is thought this figure will now reach £941,000. It is expected a £1.56m loss will be recorded during the next 12 months, although Coun Mackenzie maintained he is hopeful this will be a worst case scenario.

The HIC has seen a drop in the number of events from 77 in 2010/11 to 64 in the current financial year. It is expected that just 54 events will be staged during 2012/13. But the HIC’s managers have this week secured a major new conference when 1,000 delegates will attend an event in October organised by the British Oncology Pharmacy Association.

The operation of the HIC is under review, and plans are being drawn up for the private sector to help run the venue. The council is considering outsourcing departments including technical services, security and cleaning in a bid to curb running costs.

Staff numbers have already had to be slashed in the last two years after a 100-strong workforce has been halved. Coun Mackenzie admitted more posts could be lost, although he stressed it would not be on the same scale as before and an exact figure has yet to be finalised.

He added: “Our aim is to ensure that we have a business that is fit for purpose, and we do not want to cut back too far. The staff at the HIC are doing a very good job in extremely difficult circumstances. We want to be able to ensure that business is brought in, and we need to have the staff to do that effectively.”

The council is facing an 11 per cent reduction in government funding in the next 12 months, compounding an already grave situation. The Government’s grant fell by 16 per cent in this financial year leading to an overall £2.7m shortfall. But council tax bills are due to be frozen and no frontline services affected in the new financial year as the council plans to accept a one-off grant from the Department for Communities and Local Government to counter the deficits.

email paul.jeeves@ypn.co.uk