Merging the two culture bodies in Perthshire into a single organisation could cost more than it would save.
Perth and Kinross Council has agreed to start a massive review of culture services in the region, including bringing together the two current providers, Culture Perth and Kinross and Horsecross Arts, responsible for Perth Concert Hall and Perth Theatre.
If the move happens, one arm’s length external organisation (ALEO) would oversee the city’s theatre, hall, museum, concert hall and libraries.
But at the strategic policy and resources committee, concerns were raised that due to business rates changes – the Barclay Review – any new organisation would not benefit from tax relief.
It is thought Culture Perth and Kinross and Horsecross Arts currently saves at least £330,000 in non-domestic rates relief.
SNP Strathearn councillor Stewart Donaldson said: “The last time the council took legal advice on this was before the Barclay review.
“No new ALEOS or properties transferred to existing ALEOS from April 2018 will be eligible for relief. If a new organisation is created, any savings may be offset by non-domestic rates.”
Five options will be considered, including keeping the status quo, a single ALEO, a single independent trust, or a council-led single trust.
Mr Donaldson warned that “bigger is not always better” and a merger may not be the best way forward.
“Structural change is expensive and can be demoralising for staff.
“Both trusts are carrying out different functions and there is a real danger if we go forward that one trust could suffer as the poorer cousin. There’s a belief that bigger is better but sometimes mergers don’t work.”
A previously considered option of one organisation for all culture and leisure services including public swimming pools and gyms, has been ruled out.
Fiona Robertson, head of culture and public service reform, said a review will run until November, when final recommendations will be presented to the committee.
“The five options are intended to be so we can be completely open-minded,” she added.
“Any new ALEO will not be eligible for non-domestic rates relief so it may be that we need to consider keeping one of the existing structures in place to benefit from the tax efficiencies. We don’t know yet, we need to look at all of the options.”
A single trust was the preferred option when a shake-up was last considered in 2016, but this could not be set up quickly enough to make required savings of £542,000.
Council leader Murray Lyle said: “Our level of ambition for culture has increased hugely and is central to economic growth for our area so it is right that we consider what kind of delivery structures we need to achieve that ambition.
“We also need to achieve more efficiencies from all the services which we fund and act wherever we can to protect frontline investment.”