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Gloucestershire Business News

Who is blowing the storm clouds towards Marketing Gloucester?

The organisation responsible for Gloucester's Tall Ships Festival, and for putting the city on the tourist map, finds itself under fire.

An anonymous letter circulated to the media is just one of the catalysts which has pushed the finances of Marketing Gloucester Ltd into the spotlight, most notably prompting a BBC Radio Gloucestershire report today.

Whether the dark forces at work only aim to damage the stock of Marketing Gloucester, which can lay claim to helping bring in millions of pounds of money into Gloucester, as well as deal a blow to the Conservative-led city council which supports the organisation, is a moot point.

What is clear is whoever wrote the letter had Jason Smith, the boss of the marketing Gloucester, in their sights - its contents turning a £240,000 loan from the council to the organisation to cover running costs into a blame game.

"Jason Smith, chief executive must go after running up this huge debt over the last few years. It is not the first time the council has had to bail out their private company. Where has the income gone from (as claimed) the successful Tall Ship's Event?" said the anonymous letter, which included the names and phone numbers of board members - albeit a tad out of date.

"Gloucester City Council surely can not justify using £240,000 of council tax payers' money to bail out their private company. It is not good use of cash strapped council money."

With no contact number, Punchline was unable to ask the sender what they meant by this. And neither would the council tell us whether "bail out" was a fair description, or whether it considered the loan 'running costs' or 'value for money'.

Marketing Gloucester Ltd was founded in May 2008 and describes itself as a "public private partnership". Its board is made up and, and has been made up of, a broad mix of men and women from the city's business community, from major PLCs and shopping centre managers to heads of family-run businesses, law firms and senior figures from the hospitality trade.

It is no secret its funding from the council has been consistently cut - from £464,000 in 2016 to £348,000 in 2017 and £249,000 in 2018 as the organisation moves successfully towards a self-funding model.

Marketing Gloucester has been meeting that funding challenge. Two thirds of its income - and growing - now coming from other sources.

Yesterday Marketing Gloucester re-released figures first referred to in Mr Smith's blog of October 11.

Quoting data from the South West Research Company Mr Smith said: "It can hardly have passed anyone by who visits Gloucester today, that there have been massive changes in the last 10 years.

"Nowhere have these changes been reflected more than in the massive growth in the number of day visitors and tourists visiting the city from elsewhere in the UK and abroad.

"The growing success of Gloucester Quays and its events, the beautiful regeneration to the Cathedral quarter, the beautiful historic docks, the refurbished Waterways Museum and this year the restored Llanthony Secunda Priory along with successful events such as the Gloucester Tall Ships and Adventure Festival, Aethelflaed celebrations, SoMAC, Siblings Distillery Art in The City, Gloucester History Festival and Gloucester Goes Retro have all contributed to providing activities and attractions for visitors that has led to a phenomenal growth in visitors to the city.

"In 2015 Gloucester overtook Cheltenham in terms of the number of day visitors and total spend of visitors in the city, with nearly £212 million spent by visitors in 2018, a 68 per cent increase on 2010."

Some highlights from the independent South West Research Company show that in 2018 there were:

* 3,456,000 day visitors to Gloucester and increase of eight per cent on 2017

*1,004,000 nights stayed in Gloucester Hotels, B&Bs and so-on - a significant increase from 920,000 in 2017

* A 23 per cent growth from 2017 to 2018 in foreign visitors staying overnight

* Six per cent of all employment in the city related to tourism.

For 2018, staying visitor spend in the city was estimated as £72,526,000, day visitor spend at £132,981,000, direct visitor spend at £205,507,000, total visitor related spend at £212,197,000, and total business turnover supported, at £270,472,000. Estimated actual employment created by tourism was estimated at 4,373.

A good return on a £240,000-plus loan, some might think, if you agree that Marketing Gloucester has indeed been key to raising the cultural bar of the city to its current heights.

Paul James leader of Gloucester City Council, and someone who sat on the board of marketing Gloucester until earlier this year, quoted in the same blog, said: "All of the efforts that are going into regeneration of the city by the council, cathedral and private sector partners such as Peel, alongside the high profile promotion for the city which has been led on by Marketing Gloucester are really bearing fruit, bringing money and jobs to the city."

When Dowdeswell Estate revealed it planned to step forward to take on renovation of the long-dilapidated Fleece Hotel in the centre of town it referenced the likes of the Tall Ships as creating an environment conducive to a hotel investment.

News is also afoot on which company will be taking ownership of the former city council-owned Docks Warehouse. Rumours are strongly in favour of a hotel group. Attracted by the successful cultural events of the city? Until we know who it is, we can't ask them directly.

Mr Smith was unavailable when Punchline attempted to reach him today.

Chairman Jennie Watkins did speak to Punchline, but said the organisation had no comment.

Whatever is going on, it has clearly touched a nerve at the council, which refused to answer any questions about the situation, confirm the conditions of any loan or amount of, what its views were on Marketing Gloucester going forward, whether it considered it value for money, whether the 'special meeting' on October 14 in which the loan was agreed could be called 'emergency' meeting, what it considers the best plan going forward for the city's events, or anything else for that matter.

A spokesperson for Gloucester City Council did say this, stressing it would be "unable to provide anything else".

"We don't discuss commercially confidential affairs of independent companies, such as MGL. Over the last three years we have reduced the funding we provide to a number of organisations we work with, including MGL.

"Reductions happened with the expectation that MGL and others would find other sources of income or review activity. Advance notice was given but there was no reduction in the funding allocated to events."

Punchline understands Gloucester City Council holds the entire shareholding of the business.

Talk is this most recent missive is groundwork for those at the council who think some of Marketing Gloucester's services can be provided in house to board the business and take what they think they can do better.Whether that includes a review of the structure and finances of Marketing Gloucester as well - or even what it spells for the future - is unclear.

Liberal Democrat city councillor Jeremy Hilton, said the work of Marketing Gloucester and the events it staged should be lauded, and was not the issue.

"I have been concerned for some time about the financial health of Marketing Gloucester. That stems from £122,000 deficit in 2017 rising to £220,000 in 2018. We have been concerned about the lack of information provided  and have requested more details copied of the accounts for 2017 and 2018.

"We have been promised by the cabinet member that the review being carried out into Marketing Gloucester will be in the public domain."

So, we are no further forward in knowing whether the loan has to be returned over time - or ever - whether it would consider writing it off, or considers it value for money when the bigger picture is considered.

Up the road in Cheltenham, the town has been impressed with Marketing Gloucester and decided to copy the model.

What it has not copied is the funding element, with the organisation having a five-year budget - unlike Marketing Gloucester's year-on-year allowance.

Anyone would think we have an election up ahead.

* Punchline says the council should take some considerable credit for having the foresight to set up Marketing Gloucester - brave enough to acknowledge that the local authority itself was not capable of achieving what an independently run organisation could. Marketing Gloucester rose to the challenge during a time of economic uncertainly and from a point at which Gloucester perception of itself, and the perception of the city from those outside, was at an historic low. It has battled on with an unenviable year-on-year funding model and created strong links with city business. Those with longer memories that pre-date the likes of the Tall Ships will recall how culturally barren the city was before its resurgence.

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