Whether it has any plans to provide additional financial support to Scottish Opera and whether it will make a statement.

In May of this year the Scottish Arts Council (SAC) notified 3 year funding allocations to Scottish Opera and Scottish Ballet. These allocations assumed, on the basis of plans and forecasts prepared in discussion with each of the companies and subsequently agreed by their boards, that there would be an accounting deficit at 31 March 2000 of £1,226,000. This figure includes an accumulated deficit of £742,000 brought forward from the previous year, as well as the net costs of £47,000 incurred in setting up the joint company, which both companies had agreed to form as part of the strategy to secure a stable future for both of them.As part of the progress towards the creation of the joint company, Mr Adrian Trickey was appointed Interim Chief Executive of that company on 1 September 1999. He undertook an assessment of the financial plans for the joint company and the current financial position of the 2 constituent companies, which have retained their separate identities pending the creation of a joint board and management structure. He informed the SAC on 29 September that the accounting deficit at 31 March 2000 would be £2.5million and that there would be a cash deficit in the current financial year of £3.3million, which would substantially exceed the overdraft facility available to the company. The scale of the cash deficit facing Scottish Opera, within the overall total, suggested that it was faced with imminent insolvency.On 30 September the Chairman of the SAC informed the Deputy Minister for Culture and Sport of the deteriorating financial situation at Scottish Opera. On 5 October the SAC telephoned the Scottish Executive Education Department to convey the assessment provided by the Interim Chief Executive of the joint company. This led the Education Department to arrange a meeting on 8 October with the Chairman and officials of SAC to discuss the financial assessment and the options for action by the SAC.The SAC indicated that, at this stage of the financial year, their budget of £28 million was fully allocated; and that any decision to provide additional financial assistance in the current financial year would require the Scottish Executive to increase the resources available to the SAC.In considering the way forward, the Scottish Executive has taken the view that the preservation of national companies for opera and ballet remains an important objective. This judgement reflects the importance of national companies within a strategy for encouraging participation within Scotland in these aspects of the arts. It also takes account of the capacity which has been demonstrated for valuable educational and outreach work, which enriches the cultural experience of people of all ages throughout Scotland, and the potential benefit to international perceptions of Scotland arising from the reputation for artistic excellence by the national companies.The Scottish Executive has also decided that formation of a joint company remains the model which should be pursued as the best option for providing effective overall management of separate artistic companies for opera and ballet.These broad strategic decision are without prejudice to the need for full examination of a range of more detailed issues about the role and funding of the national companies as part of the commitment by the Scottish Executive to produce a National Cultural Strategy. Consideration of these issues is still in progress and will be informed by the continuing process of wide public consultation which the Scottish Executive initiated in August and the recent decision by the Education, Culture and Sport Committee of the Parliament to undertake consideration of the issues relevant to the national arts companies in Scotland.Before the Scottish Executive would agree to provide additional resources to contribute towards the forecast cash deficit