The charity that runs the Fairfield Halls theatre in Croydon, south London, will be wound up after being forced to lay off more than 200 staff while the theatre closes for a two-year refurbishment.
The Croydon Council-owned theatre is currently run and managed by the charity Fairfield (Croydon) Ltd, but it is unclear who will take on this role when the building reopens in 2018.
Despite opposition from the charity's management, which had previously called for the £30m revamp to be carried out in stages over a longer period, the council has pressed ahead with plans to close the entire venue at once.
A total of 220 staff – including 70 permanent, full-time employees – will lose their jobs when the centre closes in July.
The council has yet to announce plans for rehiring staff or hiring new staff when the venue reopens.
Simon Thomsett, the charity’s chief executive, told Third Sector: "Although the council has been pressed, it hasn't published any plans for reopening, so it’s all in the dark."
He confirmed the current charity would be wound down after vacating the hall in July.
But, he said, trustees from the existing charity were in the process of forming a new one, which he hoped would be up and running before the theatre’s closure.
"The objects will be similar to the existing ones," Thomsett said. "To provide the sort of service we’re providing now to the people of Croydon and south London, and to continue the work of Fairfield, which can be moved elsewhere."
He said he hoped the new charity could be approached by the council to run the building once it was re-opened.
However, he said the new charity had limited funding, so he was unable to say whether staff from the existing charity would find employment there – initially, he said, the model was likely to include one permanent member of staff and freelancers hired for specific projects.
He said he believed it would have been better to carry out the refurbishment in phases, and warned that the council would find itself starting from scratch when the building reopened – in terms of hiring staff, booking shows and regaining an audience.
"My understanding is that the budget doesn’t take into account plans for reopening," Thomsett said.
"It’s a big machine and losing that momentum means you have a long period when you reopen where you’ll have to put in additional investment to attract audiences."
Councillor Timothy Godfrey, cabinet member for culture at Croydon Council, said the measure would in fact be helping those facing redundancy, the Croydon Guardian has reported.
According to the Croydon Guardian, Godfrey, cabinet member for culture, leisure and sport, said: "We don’t just employ people to not do anything."
Godfrey described the finances of the charity, which had an income of £6.5m for the year to March 2015, as "very difficult".
"If the Fairfield had fallen over without council support at any time in the past few years or in the future, those staff would have lost their jobs and had to claim statutory redundancy pay from the government," he said.
"This way ensures they are all treated fairly and properly."
Asked if he believed the two-year closure was the best option for staff, Godfrey told the Croydon Guardian: "It is hugely helping them, putting in money to clean up their balance sheet and enable the charity and the trustees to undertake their responsibilities."
The charity has previously been at the centre of friction between the trustees and the council. In 2014, a Charity Commission operational compliance case accused the council of attempting to gain control of the board by requesting 75 per cent of the voting rights.
The commission report into the incident said the takeover of the charity by the local authority would have, in effect, turned it into a local authority-controlled company and put its charitable status into doubt in the future.
Godfrey did not respond to requests for further comment from Third Sector.