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.