Red alert: ENO will run out of money in 13 months

Over coffee at the end of last year, I asked Cressida Pollock, chief executive of English National Opera, when she would not longer be able to pay the wages. She assured me it would never come to that. I reminded her of the day, 20 years back, when Mary Allen at Covent Garden was told by the bank it could not honour her payroll.

Cressida immediately came up with a date: April 2017.

It was confidential at the time. I kept the secret. Now she has gone public in an open letter, seeking to explain how she is trying to steer ENO clear of the cliff-edge that beckons 13 months from now.

Here’s the relevant passage from her letter:

Why do we have to make changes to how ENO operates?

Over the past 20 years, we have received £33m of additional public funding from ACE above the amount given to us to operate as a fully funded company. As Darren Henley (CEO of Arts Council England) put it recently – opera companies need to adapt, or die. While we have received bailouts in the past which have ‘topped up’ our funding, ACE have made it clear that future bailouts will not be forthcoming. We need to be able to live on £12.38m public subsidy or we have a real risk that we will not meet our payroll obligations in April 2017.

As I look at the decisions that need to be made in order to save ENO from bankruptcy, it is clear that we face difficult choices. There have been suggestions that if we ask the whole company to take a temporary pay cut, or produce cheaper productions, we can weather this storm and be back to “business as usual” in 2-3 years. I wish the solution was that easy. Our significant funding reduction is not a temporary situation. As a responsible CEO, and as the head of a company that employs over 350 people and engages many more on temporary contracts, I owe it to hundreds of individuals and families to ensure that ENO can withstand this change in our funding and that we do not face a crisis next year which could risk every member of staff losing their livelihood.

We cannot move to an ‘austerity year’ and hope that we buy ourselves some time for a magic solution to materialise. ENO, in one way or another, has adopted this approach for over 30 years. ENO is a solvent company and will remain that way but it can only remain so by fundamentally changing how it works. We are not simply trying to find £5m of savings. The company will have to save £5m every year. Over the next four years, we have to find £20m worth of savings to ensure we can get through this period and be resilient in the years to come.

When ACE confirmed our £12.38m annual subsidy (following the Opera and Ballet Review in 2014), our level of funding was set as one which would support an opera company with performing forces engaged for 30-40 weeks per annum, staging 7-8 productions and 75-80 performances per year. Our plan has always sought to do as much as possible above this level – to ensure a permanent presence throughout the year and to protect our permanent forces. As we have gone through all the options available to us, we have had the following priorities in mind.

ENO needs to:

1. Deliver artistically excellent work which as accessible to the broadest possible audience
2. Retain the ability to grow, to experiment and to innovate
3. Ensure utilisation of our performing forces and permanent staff
4. Operate on a resilient and stable financial basis