20 August 2016

hawks at the fringe: Paines Plough 2015

Regular readers may recall that Paines Plough were indirectly responsible for instigating this blog, largely because what they do sounds like it can't be done. Sustainable small-scale touring with new writing? Ignoring London? Building a pop-up theatre? All now standard practice for the 'UK's national theatre of new plays'.

Roundabout (Paines Plough's pop-up in-the-round theatre, shown above in Stoke-on-Trent) is back for another residency at Summerhall this year. Paines Plough now seemingly have such a strong presence at the Fringe that it could be easy to consider them ".. a huge company". Their presence at the Fringe is undoubtedly influential but with only 6 employees and annual income of under £900,000, Paines Plough are theatrical minnows compared to the likes of the National Theatre (£138m income) or BAC (£6m income).

2014 was an interesting year for Paines Plough, who have been taking great leaps forward since 2011's strategic decision to expend reserves to expand programming. From the outside, 2015 was largely about how Roundabout could be used to support and expand the activity of the charity in their 40th year. Over the period, the number of productions grew from 8 in 2014 to 12 in 2015 and the number of performances ramped up from 204 to 312. Excluding streaming and radio figures, audience numbers increased from 22,157 in 2014 to 27,811 in 2015 (around a 25% increase) so the Roundabout auditorium certainly appears to have been put to good use.

The bulk of the Voluntary Income figure is the £315,620 Paines Plough received as an ACE Portfolio organisation. This represents about 36% of their overall income figure and the £ amount received from ACE puts them on the same sort of funding level as Tamasha (2015 income of ~£400k, 46 performances, audience of 3,577) and Pilot  (2015 income of ~£700k, 88 performances, audience of 14,776). The jump in Paines Plough's Theatrical Income almost all comes from the box office, moving from £124,731 in 2014 to £233,656 in 2015 (an 87% increase and worth noting that due to Paines Plough's collaborative approach, this does not reflect a true box office figure). 5 years earlier (2010), Paines Plough had box office receipts of just £27,475, which gives a very clear indication how much activity has expanded under James Grieve and George Perrin.

Project Specific Funding increased 37% in 2015. This was helped by ACE roughly doubling their small-scale touring network contribution (£60,675 in 2014, £121,346 in 2015). A similar amount (£121,625) was received for construction of Roundabout from a combination of the Andrew Lloyd Webber Foundation, John Ellerman Foundation, J Paul Getty Jnr. Charitable Trust and the Garfield Weston Foundation. In addition, contributions were also received from the Esmée Fairbairn Foundation (£24,152 to develop a new small-scale touring model over three years), Creative Access (£12,500 to recruit an individual via Creative Access) and donations/grants for The Big Room (£38,035 to develop five emerging writers).

Before discussing 2015's expenditure, it should be mentioned that Paines Plough have done something a bit unexpected with the balance sheet:

There's no sign of Roundabout.

Ordinarily, an organisation would capitalise such significant expenditure (this would involve adding it as a fixed, tangible asset to the balance sheet rather than listing it as an expense on the financial statement). Capitalising Roundabout would do two major things: firstly, it would smooth out the performance of the organisation in the annual accounts (arguably more relevant to companies with shareholders) because the expense wouldn't show up as spend, only the annual depreciation charge would be shown. Secondly, it would paint a much more accurate picture of the organisation: this is particularly important for charities because if they close, assets must either be used for their charitable objectives prior to closure or redistributed to another similar charity. By expensing Roundabout rather than capitalising it, Paines Plough appear to have spent a lot of cash on productions in 2015 but have nothing to show for it. In reality, they have a 168 seat theatre that isn't on the books (but would have to be redistributed to a similar organisation in the event that Paines Plough ceased activity).

In 2011, Paines Plough estimated the cost of Roundabout to be £90,000:

Labour: £30,000
Seating: £35,000
Stage: £10,000
Lighting: £5,000
Sound: £5,000
Steps into the space: £3,000
Outside wall / casing: £2,000

TOTAL: £90,000

Up to and including the 2015 period, £391,092 of specifically restricted funds were spent on building Roundabout. Perhaps costs spiralled, but it seems more likely that the initial design was improved upon and additional funds secured.

If (and this is a huge, hypothetical 'if'), Roundabout actually ended up costing substantially more than £400k to construct, there might be an argument for not listing it on the balance sheet as any decent auditor would quickly uncover the true cost of the asset and force a revaluation. However, expensing it would allow that extra cost to be buried in any vague category of expenditure ("other costs" for example). There's not really any reason to do this though, unless Roundabout cost £1.5m (clearly, it didn't) and Paines Plough decided to use all funds at their disposal to build it (clearly, they haven't).

Knowing that Roundabout is included in the 2015 expenditure (£293,968 on auditorium costs) and that Paines Plough significantly increased their activity over the year, the deficit of £166,904 certainly doesn't seem as bad as perhaps it looks at first. Support costs (mostly salaries and office overheads), governance costs and fundraising costs stayed about the same. Production cost changes are shown below:

Several of these increases would be expected given that the number of performances has increased by 50%: actor salaries, travel costs, accommodation and publicity for example. It then seems likely that the costs for Roundabout are buried in Sound/electrics and Other fees. The lack of significant increase to the Storage figure is good to see since it implies Roundabout is in constant rotation.

It seems most likely that Paines Plough will enter a (brief) period of consolidation in 2016, reducing activity (and production costs) slightly and seeing a resulting slight decline in box office income. With Roundabout now constructed and out on the road, it will be interesting to see what sort of additional project specific funding the organisation can attract and whether this can be used to maintain (or even increase) activity levels. Paines Plough are a great example of what a lightweight organisation can achieve without the tyranny of a building and I very much look forward to taking up a perch inside Roundabout at next year's Fringe.