Eden Project in line for a cash injection
The Government is being urged by business leaders to throw the financially stretched Eden Project a multi-million-pound loan.
They have declared the flagship tourist attraction a "regional treasure" and backed plans for an emergency cash injection of between £5 million and £7 million to ease cash flow problems.
The iconic Cornish environmental centre, famous for its futuristic biomes, is currently deciding how to axe 70 jobs as part of £2 million worth of cuts across "all areas of its operation".
Last night the Eden Project confirmed it was applying for funding but declined to disclose the specific details. However an application to the £2.6 billion Regional Growth Fund (RGF) is expected this month for a loan of around £3 million, towards building a new £19 million campus at the former China clay pit, near St Austell.
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And the Western Morning News can also reveal that the Local Enterprise Partnership (LEP) in Cornwall has this week supported plans to access an emergency fund set up to deal with sudden "economic shocks".
The Eden Project, which currently has 445 full-time equivalent posts, is expected to ask the Department for Business Innovation and Skills (BIS) to dip into its exceptional fund (eRGF) – a separate £100 million reserve set aside for extreme circumstances.
The little-publicised funding caters for one-off problems – such as loss of jobs in vulnerable areas – by means of a cash injection.
Tim Jones, chairman of the Heart of the South West LEP and the Devon and Cornwall Business Council, said the money would be "repaid ten times over" in benefits for the region.
"They have got to be run on business-efficient lines to justify their existence but we have got to recognise that they bring much more than a standalone business to the regional economy.
"The phrase 'too big to fail' tends to get put alongside big banks – I prefer to describe Eden as a regional treasure and we have got to take the long-term view."
In February last year, the Eden Project confirmed it was to make up to 35 staff redundant after posting a loss of almost £2 million in 2010-2011.
Eden Trust charity accounts posted on the Charity Commission for England and Wales' website showed it recorded a small surplus of £136,052 in 2011-12.
The previous year it lost £1,778,347 with its income of £31,849,974 lower than its outgoings of £33,628,321.
The trust's net debt in March 2012 stood at £5.3 million compared with £7.7 million in March 2011.
Research for Eden Project's tenth anniversary in 2011 showed it has hosted 12.8 million visitors since it opened and generated £1.1 billion for the regional economy.
Visitor numbers for 2012 are not yet known.
But the head count rose slightly in 2011, after totalling just over one million in 2010.
This was 2.7% down on 2009, which in turn was 6% lower than the previous year.
Just over a month ago, Sir Tim Smit, Eden's chief executive for development, wrote to staff alerting them of a second round of cost-cutting, adding that "no sugar-coated pill will ease the anguish for those affected".
This week members of the Cornwall and Isles of Scilly LEP board, which include Smit's partner, Gaynor Coley, Eden's chief executive for Enterprise, are said to have supported the application for emergency funding.
Eden has blamed the weather, the Olympics and poor trading conditions for a bad trading year. It hopes the cash will solve a cash-flow problem and halt any dramatic job losses.
Both loans will need to be approved by an independent panel set up by BIS.
The department said the RGF funds had allocated £2.4 billion of a total £2.6 billion allocated in its first three rounds.
Applications must be submitted by March 20 to qualify for the fourth round – RGF4.
Business Secretary Vince Bale said of the scheme this week: "We expect that competition will be tough but the payoff is significant.
"This is part of the Government's commitment to encourage investment and lead to a more balanced economy."
A BIS spokesman said the exceptional fund was not widely publicised. But he said it contained around £100 million for "short-term economic shocks. "If a company was in trouble they would speak to us and we would offer the chance to apply," he added.
27 Comments
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by 12benbows
Thursday, April 18 2013, 9:41PM
“From a old clay pit to a bottomless money pit .”
by ucsweb
Tuesday, March 12 2013, 1:30PM
“This is a private company funded with public money. If they can't declare a profit they should close. A lot of good companies have gone to the wall over the last few years and the jobs with them. They were not funded as Eden has been.
I don't see why my money should support them any more. As for bringing so much into the local economy, where on earth do they get those numbers? There must be some very successful businesses in the area (Hotels, guest houses, pubs, resturants and cafes), thing is, I have never heard of them!
A very expensive, public funded hobby for Tim Smitt.”
by Phil_lip
Monday, March 11 2013, 3:14PM
“Out of the 24 comments only 1 person has mentioned the write off off the loan earlier last year to the sum of £25 million which they should have also paid interest on but didn't. It seems that the Eden project has almost run its course, and with respect to the professors that had so many issues to deal with when it was first set up and all the employees currently on the edge this needs to stop. As has been pointed out this is a business, if they want to set up another project combining knowledge and skills from other colleges or universities then this funding should not be allowed and it should stand on its own 2 feet as others have pointed out. By now any small business owner would have been declared bankrupt by the bank and it is not good enough for it to continue. Live within your means Smitt and slow down or close the damn thing down if it can't hold its own in the current market.”
by Lafrowda
Monday, March 11 2013, 11:46AM
“Just close the drain.”
by Jonny2010
Sunday, March 10 2013, 7:49PM
“"In February last year, the Eden Project confirmed it was to make up to 35 staff redundant..."
Let me guess, this doesn't include Tim Smit or any of the senior management team?”
by todge91
Sunday, March 10 2013, 7:02PM
“MAke a good cornwall center Parcs”
by Jonny2010
Sunday, March 10 2013, 5:52PM
“Perhaps the Duchy of Cornwall should bail Eden out? They've certainly got enough money, especially since the duchy corporation pays NO CORPORATION TAX!!! We are told that the 'Prince' voluntarily pays income tax instead, how grateful.”
by Trurolady
Sunday, March 10 2013, 4:12PM
“If Eden was a viable business it would not need endless cash injections. Turn it into Cornwall Disney and lets get some real tourists down spending real money. This would help Newquay Airport too. Simples. If you want to see some plants support your local garden centre and if you want a course go to your local college.”
by kernewekonan
Sunday, March 10 2013, 3:33PM
“more than likely, like most other such organisations the top brass are going away with extremely high salaries and perks yet they never take a reduction, but still get rid of the ground staff and expect the tax payer to bail them out.”
by poldice
Sunday, March 10 2013, 12:47PM
“As a businesman weathering a deep recession without subsidy by cutting costs and being ever mor efficient by investing in the best equipment how dare they even think of bunging Eden any more hard pressed taxpayers money, after a decade of mega handouts if the thing still cannot stack up then tough, thats what they would tell me.”