The National Botanic Garden of Wales

With your permission, Llywydd, I will make a further statement on Middleton—the National Botanic Garden of Wales. Since my last statement on 10 December 2003, I have made regular reports to the Culture Committee, and I have answered questions on the garden during questions. However, in view of the recent statements by the garden’s trustees and management regarding possible closure next week, and in view of the wide interest in this matter, both inside and outside this Chamber, it is appropriate for me to restate the Government’s position. We need clarity on this matter, rather than the absurd rhetoric that we have just heard from the leader of Plaid Cymru. Despite the £1.6 million of Assembly funding provided to the garden’s trustees over the last 15 months, its financial position remains critical. Despite several substantial injections of taxpayers’ money, and a considerable amount of non-financial support, the independent trustees who are responsible for the management and the operation of the garden have not been successful in resolving the financial problems, which are considerable.
A huge bank overdraft of nearly £2 million remains. The creditors who supplied goods and services to the trustees in good faith, and who were unpaid at the time of my last statement, remain unpaid. Millions of pounds of long-term liabilities add to the financial troubles. A series of dates for closure and deadlines have come and gone, and I understand that the trustees are now considering closing the garden on Monday of next week. The financial problems are not new. They date back to 2002, when it became clear that the numbers of visitors, the key driver of the garden’s finances, were well below target and falling. With no marketing strategy, and no comprehensive vision for the garden, owned by all of the trustees collectively and backed by a business strategy, it was clear then that there was serious trouble ahead. That is why the Assembly Government provided the trustees with taxpayers’ money. That bought time to allow the trustees to develop a business plan and to produce a marketing strategy.
At the end of June 2003, the trustees had not completed a workable business plan. Fortunately, the normal seasonal growth in the numbers of visitors across the summer provided a temporary respite to the longer-term financial difficulties and the garden was able to continue to trade at that stage without further funding from the Welsh Assembly Government. In August 2003, the garden presented a business plan to the Welsh Assembly Government. This plan was based on a capital investment of £8 million, with ongoing revenue support of around £750,000 per annum. I have consistently made clear that the Welsh Assembly Government is not prepared to fund such an ongoing subsidy, and for this reason, Ministers were unable to support the business plan.
In October 2003, the trustees informed us that they were in a critical financial position again. We were told that they would face closure without immediate financial support. In the light of this, we provided further funding in conjunction with Carmarthenshire County Council and the Millennium Commission. We contributed £150,000 towards a total grant of £353,000. It was made clear at the time that this funding was a final attempt to buy the trustees the necessary time to develop a workable strategy to secure the garden’s future.
In early December 2003, the trustees provided me with their latest recovery strategy for the garden. At that time, we were told that if the Assembly Government would not bankroll that strategy, the garden would again face immediate closure. In presenting their recovery strategy, the trustees acknowledged that they had not been successful in developing the organisation in key areas. They acknowledged that they should have focused resources on achieving the founding principle of the garden, that income—primarily from visitor numbers—would match the day-to-day costs of running the garden, and that the trustees would provide an informative and pleasurable day out for the general public, for families as well as botanists. The relentless fall in visitor numbers tells its own story.
We listened carefully to the trustees and after due consideration of the proposals, and as outlined in my statement on 10 December, Ministers concluded that we could not provide the support that was requested. The strategy was not viable. It was dependent on far too many financial uncertainties. Effectively, we were faced with a demand for £3 million of taxpayers’ money, with a potential open-ended subsidy. The forecasts of revenue from other sources were based on speculative propositions, and we would have faced the same situation in a year or so.
The trustees and their financial advisers then revisited this strategy. We received a two-page proposal from the Millennium Commission two weeks ago; only today were we given a copy of a more detailed and independent analysis of the trustees’ recovery strategy. As the trust is an independent body, we cannot compel it to put such reports, which are naturally commercially sensitive, into the public domain. From the summary received, and our reading of the plan today, it appears that little has changed since December. The trust’s strategy still depends on long-term revenue subsidy, now and in the future. Also, if any of the other potential income streams fail to materialise, the Welsh taxpayer will also be expected to foot every bill. That is simply unacceptable to any responsible Government.
It is also unacceptable to suggest that we have not done enough to help the trustees, or that the Welsh Assembly Government has washed its hands of the garden. That is simply not true. We have been entirely consistent on this matter. No-one wants the garden to close. In fact, a number of individuals and organisations have looked closely at the garden and presented a range of possible outcomes. Ministers and officials have met potential investors personally; some options include sale, some include partnership, some involve maintaining the garden in its current form, some focus on property development opportunities. These negotiations have not yet resulted in viable proposals that will secure the financial future of the garden. There are many reasons why this is the case. There are real issues with the high level of debt faced by the trust, significant uncertainties over the development potential, and a lack of agreement over the future direction of the garden. If the trustees decide on Monday to close the garden, it will not be because the Welsh Assembly Government has not shown commitment—it has. It is not because we have not provided funding, as more than £1.6 million of public money rebuts that argument. Ultimately it will be because the trust has not delivered its original plan, which was the basis for the original lottery funding proposal. It has still not been able to produce a workable plan. If the garden closes, it will be the end of the trust, but it need not be the end of the garden. The Welsh Assembly Government remains committed to working with anyone who can make this project work.