100 firms make claims for £1.5m, with £2m to come, following cancellation of harbourside scheme.
One hundred firms are claiming compensation totalling £1.5m from the Arts Council, after Bristol's £58m lottery-funded theatre and harbourside rejuvenation scheme was cancelled.

It is understood to be the biggest and most complicated claim that the Arts Council has ever had to deal with, and further claims for £2m for work are still to come.

The creditors began negotiations with the council earlier this year, and an Arts Council spokesperson said it hoped to make a quick decision, possibly in the next three weeks, on whether or not it will pay up. She added that the council hoped to resolve the matter in one go.

Accountant Deloitte & Touche was called in to handle the claim after the creditors' client, the now defunct Harbourside Centre, took on creditors voluntary arrangement status. This allows the accountant to negotiate directly with the funding body on behalf of the creditors.

A Deloitte & Touche accountant working on the case said that a £1.5m claim for unpaid fees was only an interim claim, and that an application for a further £2m would be made in due course. He declined to say when this would be put forward.

The problem arose because the Harbourside Centre was set up to administer Arts Council funds for the Bristol project and had no assets with which to pay its creditors when the council announced that it would not be funding the scheme in July 1998.

It does happen that projects don’t get built. It hurts. We hope the money will eventually come

Stefan Behnisch, Project Architect

This followed a government announcement that more lottery funds had to be directed at revenue rather than capital projects.

The creditors had all started work on the understanding that the initial work would be paid for by the council, which had agreed to fund the project.

The major creditors on the project are German architect Behnisch, Behnisch and Partner, Buro Happold, Max Fordham Associates, Gleeds and Arup Project Management.

The biggest single creditor is architect Stefan Behnisch, whose firm is owed between £700 000 and £800 000. Behnisch said he had to make eight of his 60 staff redundant as a direct result of not being paid for design work.

He said the loss had also meant he could not afford to take on any new staff. "It does happen that projects don't get built, but normally we wouldn't have to wait so long for the money.