Huge cost to taxpayer of Gosport's Criterion revamp laid bare - new venue might never make a profit

The proposed flexible, multi-purpose arts space is set to lose money for years and it is uncertain when it will breakeven.

Gosport Borough Council’s policy and organisation board councillors were told that to start renovating the Criterion would cost £1.42 million. On top of that, it would then cost hundreds of thousands of pounds to keep it afloat for years to come.

The Criterion, in Forton Road, was bought by the council for £600,000 in 2022 as it wanted to create a new entertainment venue for the area funded by grants. It operated as a cinema and theatre until 1968 and was then a bingo hall until its closure in 2020.

Consultants Counterculture and Gosport Borough Council officers agreed that even after refurbishment, the Criterion would make losses and the cost to keep it trading could fall to the taxpayer. Opinions currently vary on when it may breakeven.

To kick-start the project, an estimated £1.42 million is needed for the ground floor to be opened as a cinema and live pop-up venue.

In a previously secret document, revealed to the public as part of a freedom of information request, Counterculture said as much as £325,000 would then be needed to support the venue in total for the first three to five years. It could breakeven after three-and-a-half years, it added.

Plans also assume a suitable charity can be found or established to run the venue which is hoped to open in September 2025. Time has been allowed to grow an audience of 44,000 visitors each year which is needed for the venue to work.

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However a report from the council’s own officers said the council could have to spend £1.4 million propping up the venue for the first five years. That is a worst-case scenario though; it could be as low as £400,000 but is expected to be around £800,000.

The report gave an estimated but what it dubbed a realistic cost for refurbishing and operating the Criterion of £1.38 million. However, it said the cost could range between £300,000 and £3 million.

Council documents said in a realistic scenario, the Criterion is not anticipated to breakeven, and would need a subsidy of £113,000 every year from 2028/29 onwards.

Counterculture’s document said the venue could make £27,000 profit a year – or a loss of £203,000 from 2028/29.

While the action to spend the money was approved by the board overall, Councillor Philip Raffaelli (Con, Anglesey) and Councillor Stephen Philpott (Con, Peel Common) voted against giving £100,000 to Counterculture.

In a long statement about the history of the project, Cllr Raffali said: “We strongly believe that the sums of money and risks that this project is placing on Gosport Borough Council, and hence Gosport ratepayers, is unacceptable and unnecessary and unlikely to ever deliver a successful financially sustainable venue for Gosport.

“Our view, therefore, informed by the shocking financial implications for GBC, was, and is, that the project should be cancelled and the Criterion sold for commercial development which was option one the paper presented to the policy and organisation board meeting on September 30, 2024. Instead, the administration voted to continue with the project and to release a further ‘£100,000 in capital funds to continue the development of the Criterion project to full business case’.

“Both Councillor Philpott and I accordingly voted against the recommendation and asked that our votes against be formally recorded in the minutes.”Councillor June Cully (Lab, Harbourside and Town) said she did not support the item but asked that it go to full council for a decision.

On the other hand, Councillor Peter Chegwyn, Liberal Democrat leader of Gosport Borough Council, said: “This is a major step forward in bringing the historic Criterion building back into use as a multi-purpose live entertainment venue for Gosport.

“We are progressing towards our vision of providing Gosport residents with a new cinema, theatre and live entertainment venue – which should also support shops, pubs, cafés and other businesses in the surrounding area.”

Counterculture will now bring forward a full business plan. These steps include: design development to RIBA stage 4 – appointment of a design team, architect, quantity surveyor, engineers, surveys etc. Selecting an operator, a charity or community interest company, developing a community engagement programme and sourcing project management and procurement support.