Executive's £1.7m deal to bail out struggling arts groups

TWO national performing arts companies will be bailed out by the Scottish Executive in a £1.7 million deal to clear their debts.

Officials with the Royal Scottish National Orchestra (RSNO), which is 1.4 million in the red, have been told that the soon-to-be-scrapped Scottish Arts Council (SAC), which has carried the debt, will be allowed to clear the sum.

The move comes as the Executive is set to take direct control of funding for the companies. But the RSNO has been warned that it will have to balance its books better in the future.

The Executive will also clear the 300,000 debt of Scottish Ballet. A spokesman for the Executive said last night: "It is in everyone's interest that our world-class national performing companies operate on a stable financial footing."

However, he stressed that the Executive expected the groups to meet criteria including "sound financial governance".

Simon Woods, the RSNO's chief executive, confirmed: "The company's accumulated deficit would be cleared on the condition certain financial conditions laid down by the Executive were fulfilled."

It is understood that among the requirements is that the RSNO balances its books. A spokeswoman for Scottish Ballet said its debt was "historical and stable".

She added that the dance company's debt would be paid off before funding power was taken away from the SAC.

As part of the Executive's shake-up of arts, film and TV agency, Scottish Screen is set to be merged with the SAC to form a new quango called Creative Scotland.

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