A TWEEDDALE theatre in a perilous financial  position has received a £120,000 emergency loan from Scottish Borders Council (SBC).

But concern was raised at a meeting of the full council on Thursday, August 31, that the interest-free loan to the Eastgate Theatre in Peebles, to be paid back over four years, is unsecured.

Members were told that the theatre has had “significant cash-flow issues” over recent months and that the loan would support its financial recovery.

The loan, allocated under the council’s emergency powers, has no budgetary impact on the local authority as it will be financed through “surplus cash”, the meeting was told.

But Melrose councillor David Parker raised concerns.

The agenda item was originally to be considered ‘in private’ but Mr Parker won agreement from members that it was in the “public interest” for it to be put on the public element of the agenda.

He said: “This is a judgement call and I completely accept that in funding there will be those who make the judgement that we should fund it and those who make the judgement that we should not.

“What concerns me is that the loan at the moment is unsecured and I would have been very nervous in signing it off if I’d been asked to do so as it is unsecured, and I am also not seeing an analysis of their financial position and whether we have confidence that the loan will be repaid.

“I am concerned about the level of refinancing because paying this back over four years for an organisation which is already financially challenged could of itself be of great difficulty.

“The big question in the room is that we keep saving, or intervening in, the Eastgate Theatre because it keeps falling over financially and there’s going to come a time when we have to be very careful. I wish the theatre all the best but I do wonder if we have gone too far on this occasion.”

In response, Suzy Douglas, SBC’s director of finance and procurement, defended the financial intervention.

She said: “I think the key point that has come across in all the discussions we have had so far is around a real cash flow issue and there are really a number of quite positive steps they have taken in around engaging with insolvency experts, there’s a turnaround plan, there’s Crowdfunding planned to supplement grant applications that have been submitted. So we very much judge this as a cash-flow issue and expect the Eastgate will be able to turn round its operations and get back on a sustainable footing.”

Tweeddale West councillor Drummond Begg called on “people power” to help the theatre.

He said: “The decision not to assist would have led, almost certainly, to the closure [of the theatre].

“I’d ask people in Tweeddale and beyond to get behind the Crowdfunding because that’s the way to resolve this issue, alongside grant applications. Let’s have people power here and I hope people get behind the Crowdfunding.”