A council loan of £200,000 given to Pitlochry Festival Theatre (PFT) four years ago is to be written off.
The money was paid when arts funding to the theatre was unexpectedly removed but councillors decided this week that they would not seek repayment.
“This loan was made during a period of financial challenge for the organisation,” said John Symon, the council’s head of finance, in a report to the strategic policy and resources committee.
“It has taken steps in recent years to improve financial monitoring (it uses much more detailed box office data, for example) and has looked to achieve savings where possible.
“PFT has a £20 million-plus capital vision, which it is working to achieve by 2021, and the write-off will provide immediate additional revenue stability while it prepares its fundraising strategy and full business case with which to approach major external sources for capital.”
Committee convener, Councillor Ian Miller, said the loan had been made in an emergency situation and given that the theatre was now in a relatively stable position with ambitious plans, they did not want it to become an “unnecessary encumbrance”.
He agreed with Councillor Dave Doogan that, with hindsight, it would have been better to have given a grant rather than a loan.
Councillor John Kellas said the theatre is a major contributor to the local economy and to write the loan off is a reflection of the belief it is moving in the right direction.
He said he had been involved with the theatre for the past eight years and had seen a “positive change” in management over that period.
The committee heard that unlike other loans they had been asked to write off, there would be no attempt at a later date to recoup the money from PFT.
“Pitlochry Festival Theatre is an exception we will not pursue this in the future,” said Mr Symon.
This, however, did not apply to the remainder of the debts, which included £530,000 of council tax debt, £180,000 in service charges and £60,000 in rent owed by former tenants.