Economics United Kingdom

Massive redundancies at London's ICA, but will senior heads roll?

The contemporary gallery is in crisis with a deficit that has ballooned from £100,000 to £1m in a year

london. The Institute of Contemporary Arts (ICA) in London is fighting for its survival following revelations that its operating deficit could soar to more than £1m, on a turnover of around £5m. The jobs of all staff, directors and trustees are on the line, with up to a third of posts at risk. Meanwhile, Arts Council England is withholding half of a bail-out grant of £1.2m, depending on the outcome of an organisational review “which must demonstrate that the ICA has a sustainable business model for the future”, according to the funding council.

Ekow Eshun, a former magazine editor who has been the ICA’s artistic director since 2005, vigorously denies that the institute could close in May, as reported in some UK newspapers. But he has confirmed to The Art Newspaper that to balance its books, the ICA needs to cut £1m from its current salary bill of around £2.5m. The ICA employs 78 full-time and 32 part-time staff, and has 11 trustees. Alan Yentob, the BBC’s creative director, has chaired the board since 2002. “There isn’t an aspect of the organisation all the way up to the council that isn’t being looked at,” Eshun told us. The organisation has already lost its managing director, Guy Perricone, who resigned in November 2009 before the figures became public.

Founded in 1947 by a group of artists, writers and patrons, the ICA was one of the few organisations to introduce avant-garde art to post-war Britain. It gave debut solo shows to artists from Damien Hirst (1991) to Marlene Dumas (2001). More recently it has been known for its programme of cinema, performance art and talks. But it has struggled to maintain its radical reputation, while a plethora of other such spaces have opened in London.

According to ICA council member and finance committee chair Alan Taylor, alarm bells started ringing in January 2009. “We realised that there were going to be substantial losses made,” he said. He declined to release the accounts for 2008/09, because “they are still being finalised” (the deadline for submission to the Charity Commission was 31 January 2010). The last available figures, for 2007/08, show that the ICA’s budget was £4.9m, of which £2.5m was spent on staff and £127,000 on governance costs. That year, the organisation earned sufficient income to cover expenditure, with around £1.6m coming from various public subsidies, and the rest earned through fundraising and trading.

According to Taylor, by 2008/09 a £100,000 deficit had opened up. This has now escalated to between £600,000 and £800,000. With the prospect of redundancy payments, he said this could climb to more than £1m. But he denied that these grim figures are due to failures of the ICA’s accounting controls. “At no point have I had cause to worry that our numbers are wrong…we have processes which are clunky, perhaps, but they work,” Taylor said. He also added that a charity gala in March might mitigate the final position for 2009/10.

Eshun denied there has been a failure of management. He blamed the recession, creating “a perfect storm of events”. He cited the October 2008 charity auction at Sotheby’s to celebrate the ICA’s 60th anniversary, which raised £673,000 instead of the estimated £1.3m. He also said income from hiring out the institution’s Nash premises on the Mall in 2009 was £200,000 instead of an estimated £300,000, blaming “invasive” building work next door. “Unlike some organisations we don’t have an endowment,” said Eshun, “so there were no reserves to act as a cushion”. Yentob agreed “it was an exceptional year and a number of factors all came together that meant the deficit was significant”.

But others believe the ICA’s instability owes as much to its reliance on income generation, only sustainable during a boom, which undermined the individual programming departments. Writing in Mute magazine, critic J.J. Charlesworth says the ICA had become “dangerously dependent on a high-risk strategy of developing what turned out to be volatile and unpredictable income from sponsorship deals…based on marketing projects increasingly untethered from the ICA’s core programming content”.

Eshun concedes that not all of the ICA’s problems have been caused by the recession. Early in 2009, the board commissioned consultants to review the organisation. “The overall structure of the ICA didn’t stack up,” Eshun said. “We’d managed to make it work over the previous years but it carried too high a fixed cost base to survive. The biggest single fixed cost was the staff…and one reason why it was so expensive was because for many years the ICA had developed quite a siloed way of working where we had lots of departments that couldn’t communicate directly with each other.”

In October 2009, Arts Council England granted the ICA £1.2m over two years from its Sustain fund—on top of its annual grant of around £1.3m. Half of the first tranche of the award, to help arts organisations restructure, has been paid. A council spokesman said the balance is conditional on “the future direction of the ICA”.

Taylor told us that “there will be nobody in this organisation, from the front desk through to the board, that will not have a question mark put against them”. There are no offers of resignations from the ICA’s upper echelons so far. Eshun believes himself “well placed to take the ICA forward in difficult times”. Yentob said he has “been on the board for a long time” so “will be stepping down” but not “leaving the ICA in a situation where it’s not being properly led. These things need to happen in a timely way.”

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Comments

16 Mar 10
2:36 CET

VICKY, LONDON

its frustrating that beaurocracies always protect themselves at the cost of more important factors, namely the art that should be being shown. No wonder mark slaten wouldnt work under Ekow Eshun, he understood fully the nature of the beast that is the current iCA, a venue hopelessly out of touch with contemporary art practioners.

25 Feb 10
15:11 CET

RUDY, LONDON

Ekow has explicitly said that his job is safe - he's not leaving - so it's misleading of him to say that every aspect of the ICA and its staff is being looked at. Ekow also got a pay rise at the end of last year, I'm told.

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