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The Eyre Report: a Summary - Part VCurrent finance; future financial stabilityThe Royal Opera House and ENO do not operate user-friendly accounting systems. However, while not easy to extract, the necessary financial data does exist, so I do not accept any excuse for previous and current Boards and senior management of the companies not properly informing themselves of their financial position. I recommend that the companies introduce more transparent methods of financial reporting and monitoring, including the production of improved monthly management accounts to be submitted to the Arts Council for scrutiny. The ROH must review its systems of financial control and reporting so that it can be effectively managed. He compares the level of subsidy of other companies in other countries, instancing the £34m that La Scala receives and the £30.7m for the Berlin Staatsoper. He believes that the ROH and ENO are providing excellent artistic product at a low cost to the public purse. He mentions, too, the high level of private funding on which both ENO and the ROH depend, and recognises the vulnerable position this places them in. On ticket-pricing, he also recognises the importance of the high level of income from the box office and that selling more seats at a lower price would have to be compensated for. He suggests the option of premium rates for special performances and instances the current policy of Sadler's Wells as a useful avenue to explore. He believes that production costs are reasonable. However he is very concerned that the ROH does not seem to have budgeted for the greater running costs which will be associated with the new building, when it is open. I recommend that Royal Opera House management salaries are brought in line with the rest of the subsidised sector; there is no justification for higher salaries than ENO - or for that matter the Royal National Theatre or Royal Shakespeare Company - simply because it is the Royal Opera House. The ROH's stage running costs were much higher than those if ENO pre-closure, and Eyre suggests that this means that working practices need to be reviewed. Both the ROH and ENO need to try to cut the cost of their marketing budgets, perhaps by contracting out functions like design In both companies the productivity of the chorus should be reviewed and more flexible arrangements introduced. The ROH's orchestra working agreements need to be reviewed to increase flexibilty, particularly in view of the increased demand that will occur after the re-opening. I recommend that as it will have a profound effect on the overall funding requirements of the Royal Opera House, plans are immediately researched and costed for the studio theatre. Future Financial Stability The Royal Opera House has submitted no business plan for the re-opened Covent Garden. (Both) companies are running substantial accumulated deficits. ENO’s is being addressed as an element of stabilisation; it is not clear how the Royal Opera House intends to tackle theirs. Costs are not disproportionately high at any of the companies, but there is scope for making savings. There will be new calls on the budget and it is for the companies to find the resources they need to deliver their artistic objectives; by creating savings; reallocating resources; generating income; raising private funding; and growing the audience. I recommend the companies conduct fundamental reviews addressing the areas identified by this Review, setting out how they intend to implement the recommendations. The companies’ reviews should be accompanied by an accurate and convincing assessment, which must satisfy the Arts Council, and ultimately Government, of the levels of funding required to deliver the Review’s objectives. My belief is that at the end of this process, additional funds will be needed, if the companies are fully to deliver the objectives of this Review. If the companies can support this with rigorous budgets that the Arts Council considers to be indisputable, then it is for the Arts Council and ultimately Government to decide how to address this, within the context of its overall policy for the arts. Index
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