Nigel Freedman reports on the deepening crisis at The Old Market arts centre in Hove amid fears the Hanover Band, which it was relying on for support, could collapse.

The trustees of The Old Market had a dream to turn it into one of the best-performing arts centres in the South East.

They drew up plans to transform the crumbling 176-year-old building in Upper Market Street with a mix of public money and private donations.

The £5 million restoration project was completed in 1998, with the help of a £3.9 million grant from the Arts Council Lottery Fund.

At the time, it was the largest ever National Lottery award made by the Arts Council in the South East.

However, The Old Market ran into financial difficulties almost as soon as it opened and, by the end of last year, had run up debts of £1.4 million.

A report to Brighton and Hove City Council suggested its main creditor, the building firm Bovis, would seek a winding up order if its debts were not paid.

The council had agreed to loan the Old Market Trust £275,000 to keep it going while a rescue plan was drawn up and South East Arts was asked for further financial support.

Trust chairman Robert Minton said talks were held with the Arts Council and Hove MP Ivor Caplin in the week before Christmas about the centre's future.

He said: "Before the recommendations set out at that meeting could be finalised, both the Arts Council and the city council withdrew their financial support.

"We began a new programme last year to turn The Old Market around and we made it clear to everyone that it would take three years to achieve.

"Here we are, just six months into the programme, and they have decided to pull the plug and we are having to make people redundant."

Mr Minton said with the loss of its financial lifeline, the trust could no longer afford to meet the £10,000 a month wages bill for its seven permanent staff.

The were told just four days before Christmas they were being made redundant and the centre would no longer stage performances by major artistes.

Instead, it would focus on hiring the hall for shows by community groups and for functions such as weddings.

Mr Minton said the centre would reopen early in the new year for a growing programme of events which were self-financing and which would eventually provide an income of £100,000-a year.

There are also plans to open a restaurant in the basement, for which there is already planning permission.

Mr Minton said: "To attract a good quality restaurant, we would probably have to offer the first two years rent free and would not start generating income until the third year.

"Money we receive from tenants who rent offices in the building and from hire of the hall for concerts, weddings and other events should generate about £50,000 a year.

"It is not the end for The Old Market and we are not closing down, as South East Arts initially implied.

"They had no right to make that statement as they have no say in the daily running of the building.

"I am pleased to say they withdrew their statement almost as soon as I complained to them about it."

The Old Market building also houses a number of private businesses, community groups and public organisations.

Brighton and Hove NHS Trust runs its district nursing services from there and it is home to voluntary groups, including the Brunswick Project and Springboard.

Springboard is behind the annual Brighton and Hove Competitive Music Festival, which was due to take place at The Old Market in April.

This year's festival may now be in doubt unless it can find another venue in time.

The future also now looks uncertain for The Hanover Band, which has offices in the building and holds regular concerts and workshops there.

Mr Minton said the band had always paid for use of the concert hall and he had hoped it would continue to be a major attraction.

The band was one of the main backers of the venue and pumped £225,000 into the restoration project, along with other private backers and the former Hove Borough Council.

It continued to back The Old Market, despite South East Arts and the city council insisting on a major financial reorganisation of the centre.

News that it, too, has debts of £150,000 and faces being disbanded is the latest bitter blow for the centre.

It had been relying on a regular income from the band for the hire of the theatre for concerts as part of its new financial future.

The band had organised a fund-raising concert by Dame Felicity Lott and Graham Johnson in support of The Old Market on January 22.

Tickets for the concert will be sold by The Dome box office, where a spokeswoman said yesterday it was still planned to go ahead.

Private businesses based at The Old Market include management consultant Jeff Rodrigues and violin maker Peter Ratcliff, who has a workshop.

Mr Rodrigues said: "We have been told that rents will rise by up to 90 per cent in March but, already, we are not getting the service we pay for.

"Whenever I try to contact the trust management, they do little or nothing about the points I raise.

"It took 14 months just to get an acknowledgement from them on one matter and I am still waiting for something to be done.

"If The Old Market was being run in the same way, it is hardly surprising things have turned out the way they have.

"I know the staff there are very angry about the way they have been treated."

Mr Ratcliff said: "You could say we have been kept in the dark about what is happening here.

"When I asked the trust secretary if I would have to leave the building, she said she could not tell me anything.

"I have still not been told if I am going to be allowed to stay here."