Evening Telegraph (First Edition)
V&A Dundee’s £1.1m loss
V&A Dundee’s chairman said high energy bills and visitors spending less than expected were among reasons for a £1.1 million loss before the pandemic hit.
The deficit meant Design Dundee Ltd, the charity established to develop and run the V&A, lost twothirds of its value.
The newly filed accounts show the design museum generated income of £6.23m but incurred costs of £7.34m in the year to the end of March 2020.
The accounts are the first to reflect a full year of trading since the attraction opened in September 2018.
Net assets fell from £1.67m in 2019 to £562,000 at the year end.
Businessman Tim Allan, who succeeded Lesley Knox as chairman in August 2019, last night insisted the finances of the museum were “stable”.
He highlighted the surplus of £780,000 the charity generated the previous year and subsequent increased support from the Scottish Government.
Mr Allan said: “Until the museum opened we didn’t know how it would trade and what the costs would be. The business plan was written years ago. The £1.1m loss is the first indication of what the real costs of the museum are.
“The power and lighting bill was much greater than expected. We discovered evaporation from the ponds was more than expected – it all adds up.
“We had an extraordinary number of visitors to the museum – more than 800,000 in the first 12 months – but they didn’t spend as much individually as the model told us they would.
“In business I’ve invested in more than a dozen start-ups so I’m not surprised that in the first full year of trading a new enterprise like the V&A ended up with a deficit.
“I knew it could be managed. We had a surplus and liquidity facility to deal with it and we were making a profound investment case to the Scottish Government who were amazed and delighted at the economic impact that we’d had in a short period of time.”
In April last year the Scottish Government provided an extra £2m in funding. This was followed by a further £1m in emergency Covid-19 funding in January.
Last month it committed to up its annual funding from £1m to £3m for the next three years.
Mr Allan dismissed any suggestion the additional funding was a bail out.
The government had previously committed £1m a year to the attraction for the first 10 years.
But Mr Allan said it was always the plan for this to be reconsidered after the first year.
“The economic impact of the V&A has been £21m in Dundee and £75m in Scotland,” he said.
“It’s supported hundreds of jobs.” The new accounts showed a dramatic drop in income from grants and donations, which makes up the majority of the V&A’s revenue.
This fell from £5.93m in 2019 to £3.65m in 2020 as many groups that donated heavily ahead of opening did not provide ongoing support at the same level.
Dundee V&A reopens on May 1 with a new exhibition on club culture called Night Fever.