Limerick City of Culture had ‘serious’ cash crisis

Limerick City of Culture ran into "serious cash-flow problems" only weeks before it opened in January.

Internal documents from the Department of Arts, Heritage and the Gaeltacht, obtained by The Irish Times under the Freedom of Information Act, disclose that the City of Culture had none of its €6 million State funding in place by the time of the official opening on December 31st, or indeed well into February.

The records show the scale of the City of Culture’s difficulties in drawing down funding and the uncertainty it caused for the project. Two sources familiar with the process identified three major factors behind the funding crisis.

The first was the 18-month lead-in time which was “wholly inadequate”, according to the sources who spoke on condition of anonymity. The second was that the Government committed no additional funding initially, making it difficult to plan major events. Finally, the organisers had to wait until the budget last October to get the €6 million in funding approved. Even then, new rules on spending and contracts drawn up by the Department of Public Expenditure resulted in a convoluted process, which meant money was not released until February of this year.

The documents show the decision to get Government approval to make Limerick the first Irish City of Culture was made by Minister for Arts Jimmy Deenihan after meeting a regeneration group from Limerick chaired by businessman Denis Brosnan. The meeting took place in April 2012 and officials from the Department of Arts were then asked to prepare a memorandum for Cabinet putting the case for awarding the title to Limerick in the absence of any competition.

In internal correspondence of May 2013, a department official emphasised the City of Culture “cannot cost anything” and that the memo for Government will need to “put some rationale” behind the proposal. “We can refer to the European Capitals of Culture which both Dublin and Cork were, so they can be ruled out.”

Concern
At a meeting with the Minister in March 2013, Limerick city and county manager Conn Murray expressed concern finance was not in place. He said "progress was being hampered due to lack of commitment in terms of State support. The lack of definite support is also affecting the ability to raise funds from philanthropic sources."

Mr Deenihan responded that funding would not be decided until the budget; in the event, some €6 million was granted. Documents show the urgency and concerns over funding in the weeks prior to the opening. In an internal email in November 2013, a Department of Arts official said the City of Culture had a “serious cash-flow problem”.

A week later, assistant secretary of the Department of Arts Niall Ó Donnchú emailed colleagues to say: “Conn Murray is under huge pressure for any help we can give pre Xmas, and scale is irrelevant.”