Britain's top orchestra starts centenary by plunging into debt

Britain's leading orchestra has slipped into debt just as it prepares to begin a year of glittering celebrations to mark its 100th anniversary.

News that the world-renowned London Symphony Orchestra (LSO) is in deficit for the first time in two decades will shock many who regard it as one of the most innovative, enterprising and best-funded orchestras in Britain.

The extent of the gap in the orchestra's resources will not be officially confirmed until the annual general meeting on 29 January but it is understood to be in excess of £500,000.

But the orchestra claims it has gone into the red as a direct result of its commitment to an innovative education project, based in a 270-year-old Hawksmoor church, St Luke's, which is winning international acclaim - and is just what the Government is keen to promote.

Clive Gillinson, the orchestra's managing director, said: "It's a huge sadness. We've put our neck on the line in every way with St Luke's. But there isn't a funding system at the moment that can respond to the extraordinary. It responds to the standard."

More than 30,000 children have benefited from educational projects with the orchestra since St Luke's opened in Old Street, London, last year. But the project has proved more expensive than anticipated, with the cost of establishing the centre exceeding the original estimates of £14m by £4m.

Although most of the £17m capital bill has been met, a £1m endowment is still required to ensure its long-term viability. Cut-price concert tickets of £5 designed to attract new audiences last year also contributed to the deficit.

Mr Gillinson said: "Everybody is now acknowledging that the arts are central to how we enable people to fulfil their potential. Everybody, including people from the department for education, says St Luke's is incredible. But everyone then says it doesn't fit within the way they fund."

His words echo criticisms made in The Independent last year by Lord Moser, the former chairman of the Royal Opera House and warden of Wadham College, Oxford, who said efforts to increase public access to the arts was being undermined by the Government's refusal to pay.

"[The Government] should recognise that to do what they ask the arts to do - increasingly widen audiences - costs money," he said. "I get a little bit fed up with the pressures without the price tag attached."

Yet in many respects, the LSO should be in a strong position. It received £1.66m from the Arts Council this year, rising by 14 per cent next year and a further nine per cent to more than £2m by 2005, making it one of the best-funded orchestras in the United Kingdom. This support is matched by the wealthy Corporation of London, which funds the Barbican where the orchestra is based.

The LSO is in demand for film work and has established its own music label which has sold around 250,000 CDs - a huge number of sales for a classical label.

One funding insider suggested there was an issue of how well the orchestra was managed and that it had contributed to a deficit which would have existed even without the development of St Luke's. "Artistic excellence is not synonymous with good governance," he said.

Nonetheless, it is clear that despite an injection of £30m in recent years intended to stabilise Britain's orchestras - several of whom had been on the point of collapse - times remain tough.

Even a sell-out concert at a major venue such as the Royal Festival Hall in London's South Bank Centre yields a loss that can run into thousands of pounds. And fewer orchestras are working for the major record labels, many of whom have stopped releasing new versions of classics pieces.

Russell Jones, the director of the Association of British Orchestras, said this government had done much to support the orchestras, and more than had been done in the past, but that Britain still lagged seriously behind the support offered in other countries - from the level of music in schools upwards.

He added that education work, such as St Luke's and similar projects run by the City of Birmingham Symphony Orchestra and the Royal Philharmonic, was vital not only to make amends for the 95 per cent of primary schools without a music specialist, but also to help create tomorrow's audiences. "It's a survival mechanism," he said.

But with a sell-out audience expected at the Barbican tonight for a performance of Benjamin Britten's Peter Grimes, Mr Gillinson said he remained optimistic for the future and that the LSO fully intended to celebrate its anniversary year and would deal with the deficit afterwards.

"The most important thing to say is it's a sensational orchestra. I think it is the best orchestra we've had in Britain ever and it genuinely compares with the best in the world," he said.

A century in the life of the LSO

The London Symphony Orchestra gave its first concert in London on 9 June 1904, opening with Wagner's "Prelude" from Meistersinger and concluding with Beethoven's Fifth Symphony.

It has made thousands of recordings in the last century including more than 100 film tracks such as Star Wars, Brief Encounter, Harry Potter and Braveheart.

The orchestra comprises more than 100 players and gives about 90 concerts a year in the Barbican, its London home.

Its first tour abroad was to Paris in 1906, in 1912 it became the first British orchestra to visit the United States and in 1964 it undertook its first world tour.

It now tours about a dozen times a year and will visit America, Japan, Singapore, Hong Kong, and Beijing - for the first time - as well as several European cities this year.

The 100th anniversary season includes a line-up of international stars including Pierre Boulez, Valery Gergiev, Bernard Haitink, Mstislav Rostropovich Maxim Vengerov and Evgeny Kissin.