OBJECTIVES AND PERFORMANCE OF THE DEPARTMENT
FOR CULTURE, MEDIA AND SPORT: GOVERNMENT RESPONSE TO THE FIFTH
REPORT FROM THE CULTURE, MEDIA AND SPORT COMMITTEE, SESSION 1997-98
GOVERNMENT RESPONSE
The Government welcomes the Committee's Report. Its
response to the main recommendations and conclusions of the Committee
are set out below, in the order of the Report. The new objectives
for the Department are those provided in evidence to the Committee
in draft form, and are included in the consultation paper which
is attached to this response.[2]
(i) We are deeply
concerned that, in policy statements by the Department and in
public statements by Ministers, tourism is subordinated in favour
of more glamorous and trivial matters. We recommend that the Department's
economic objective should be to foster the tourism, creative and
sports industries. The Department's Annual Report should provide
specific information on how its sponsorship results in enhanced
economic performance yearonyear in each of its sectors.
Clearly, the economic objective that we recommend must have repercussions
not only upon the work of the Department, but also upon its title.
We consider the latter issue later in the Report (paragraph 8).
No one can doubt the importance of tourism to the
national economy, and it is at the heart of the work of the Department
for Culture, Media and Sport (DCMS). Some members of the Committee
may have been under a misapprehension in believing that this is
not the case. Fortunately the tourism industry itself does recognise
the commitment the Department shows, and this is evidenced by
a number of responses to the Committee's Report which are attached
at Annex A.
The Secretary of State for Culture, Media and Sport
personally chairs every month a working group of senior industry
representatives. He has expanded the Tourism Forum, which he also
chairs, to include almost 60 representatives, and with these bodies
DCMS is preparing a tourism strategy to be published later this
year. The strategy will set out in detail the Government's plans
for promoting quality tourism development which is economically,
environmentally and socially sustainable and which supports its
employment and social inclusion objectives. This work has been
widely welcomed by the industry. Tourism plays an important part
in supporting most of the Department's other sectors—museums
and galleries, the arts, historic buildings—just as these
form part of what attracts visitors here and makes them want to
return. DCMS is in no doubt about the economic benefits which
flow from all its sectors, and its aim is to create the environment
in which they can flourish. The Department's objectives include
specific ones on competition and economic growth. And the work
of the Creative Industries Task Force, with the forthcoming publication
of a full and detailed mapping exercise of the economic value
and prospects of the creative industries, will focus specifically
on the economic benefits that can flow from our various sectors.
DCMS will look at ways in which its annual report
can in future be adapted to report on economic performance.
(ii) The distribution
of Ministerial responsibilities within the Department for Culture,
Media and Sport appears likely to distort fulfilment of the Department's
objectives. We recommend that Ministerial responsibility for all
media should be unified. We recommended in our most recent Report
on The MultiMedia Revolution that such
responsibility should be located in a new Department and we hope
that recommendation will be accepted. If not, the need for the
unification of media responsibilities in the Department for Culture,
Media and Sport will be all the more important. We further recommend
that tourism should be the lead responsibility of a Minister in
the Department, and that the Secretary of State should concern
himself with it far more, in actions, in policy and in public
statements (paragraph 11).
The precise machinery of government is of course
a matter for the Prime Minister. For the reasons stated in the
"Government Response to the Report of the Select Committee
on Culture, Media and Sport on the Multimedia Revolution"
(Cm 4020), Ministers believe that the DCMS, DTI and Cabinet Office
will continue to have an interest in this area. DCMS does not
compartmentalise these matters: all media policy at official level
within the Department is part of one group, and there has hitherto
been close liaison between the two Ministers concerned. The Secretary
of State has, however, noted carefully the Committee's point about
Ministerial responsibilities, and arrangements have now been made
for both film and media to be within the portfolio of one Minister.
DCMS has in fact had a Minister of State with specific
named responsibility for tourism since the general election. The
Secretary of State has taken a considerable personal interest
in tourism as explained in the answer to recommendation (i); and
he will continue to do so.
(iii) We do not doubt
the enthusiasm of Mr Banks on relations with the Department for
Education and Employment. Nevertheless, simply noting the influence
of the Department for Education and Employment is not enough.
There ought to be coordination between Departments in which
the knowledge and experience of the Department for Culture, Media
and Sport in sporting matters is fed into decisions by the Department
for Education and Employment (paragraph 13).
The Minister made clear his determination to coordinate
work and supply expertise in the way the Committee proposes. The
DCMS annual report gave ample evidence that the Department and
its Ministers have a close working relationship with many parts
of Government across the range of their activities. This includes
working with DfEE on sport, arts education, libraries, on the
New Deal, and in decisions on shaping the educational initiatives
to be delivered by the New Opportunities Fund, which will bring
important new benefits to libraries, cultural and sports education
and play. The DCMS Youth Sports Unit works closely with DfEE to
promote physical education, sport and play for young people. It
was by working closely with the Department of the Environment,
Transport and the Regions and with DfEE that an effective policy
and action on the manifesto commitment to stop the unnecessary
sale of school playing fields was developed, and is now being
implemented.
(iv) We note the Department's
commitment to enhance its influence within Whitehall and to highlight
the economic and cultural importance of the sectors which it sponsors.
However, a commitment is not an achievement and unfortunately
the Department has not enhanced its influence in the way it says
it would like to do. The Secretary of State should now make it
his highest priority to advance the Department both within Cabinet
and by taking a much tougher attitude in his negotiations with
the Treasury which has certainly not been achieved and may not
even have been attempted. There is considerable potential benefit
to the sectors which the Department sponsors from being at the
heart of one Department's objectives rather than at the periphery
of several. Nevertheless, we are concerned that "creative
Britain" provides an inadequate label for what should be
the Department's focus. In our most recent Report we judged that
the intertwining of technological and cultural factors in the
media and information technology sectors justified the establishment
of a separate Department of Communications. Concentration on "creativity"
also leads to a perceived undervaluing of tourism. The switch
from a symbolic to a descriptive title for the Department, while
understandable, has led to the omission of tourism from the title.
Although the Department has only recently been renamed,
we believe that a new name should be found for it which combines
euphony with a more comprehensive description of its responsibilities.
Since we are awaiting a response to our recommendation in our
most recent Report that parts of the responsibility of the Department
should be transferred to a new Department of Communications, we
do not regard it as appropriate in this Report to suggest a new
name for the Department for Culture, Media and Sport. However,
depending upon the Government's response to that recommendation,
we recommend that this Committee should be consulted prior to
any decision being made about a new name (paragraph 17).
The importance of the work of the Department for
Culture, Media and Sport within Government was recognised by its
success in securing a place in the first legislative session for
a landmark piece of legislation which has now become law as the
National Lottery Act 1998. DCMS has secured an excellent outcome
for its sectors from the CSR, with a 5.7 per cent real terms increase,
threeyear stability in funding and the maintenance of their
Lottery shares after 2001. The announcements arising from the
CSR represent the biggest Exchequer boost ever given to the cultural
life of the nation. There could be no clearer demonstration of
the value which the Government places on what DCMS does and the
priority which the Government gives to these sectors. The Committee's
assessment of the Department's "negotiations with the Treasury"
has been, quite simply, incorrect. The Government has made absolutely
clear that it recognises the economic, social and cultural importance
of DCMS and its sectors.
The machinery of government is of course a matter
for the Prime Minister. Ministers have already commented on the
Department of Communications suggestion. The name given to the
Department for Culture, Media and Sport only last year gives it
a more modern title than the somewhat backward-looking name it
had previously. Ministers have no intention of changing the name
again in the foreseeable future.
As the DCMS annual report made clear, the Department
has a close working relationship with many parts of Government
across the range of its activities. DfEE has already been mentioned
in response to recommendation iii. DCMS also works with DfEE across
a range of arts education issues, including in looking for a long
term funding solution for dance and drama training and on music
education, where the new Youth Music Trust will build on the steps
DfEE are taking
to support music services.
The Department also works, for example, with DTI
on DCMS interests in employment issues, competitiveness and on
the regulation of the converging broadcasting and telecommunications
industries; with DTI and FCO on export promotion; with the Home
Office on licensing and supporting the voluntary sector; with
DSS on performers' access to benefits and DETR on regional matters
and on sustainable development. Through the Creative Industries
Task Force, which the Secretary of State chairs, DCMS is making
constructive progress with Ministers in other Departments across
a whole range of issues which are vital to the economic performance
of the creative sector, including education and training, venture
capital, business support, the impact of new technologies, export
promotion, protection of copyright and the detailed operation
of the New Deal. DCMS plays a full part in discussions on issues
which cut across Government, such as work on policy on older citizens,
on volunteering and on social exclusion. DCMS's role as the sponsor
Department for the New Opportunities Fund means it plays a leading
role in pulling together thinking across Government on Lottery
funding for health, education and, in due course, the environment.
(v) We regard
the autonomy in certain areas of budget allocation granted to
the Arts Council of England and English Heritage and, no doubt,
other bodies as letting the arm's length principle go much too
far. While Ministers ought not to interfere in the allocation
of grants by such bodies, it should be their duty to ensure that
these bodies are administered in the most economic and costeffective
way possible (paragraph 28).
&
(vi) In general terms,
the arm's length principle has the potential to create a situation
where Ministers are assumed to have responsibility but in fact
lack the power to assert that responsibility. Lack of strategic
control might lead to piecemeal intervention. For these reasons
we support in principle the continued strengthening of Funding
Agreements between the Department for Culture, Media and Sport
and the bodies which it sponsors to ensure that their work is
aligned with the Department's overall objectives, that measurable
and meaningful targets are set related to those objectives, that
money is not wasted and that top-heavy bureaucracy does not result
in administrators creating and safeguarding their own individual
power bases (paragraph 29).
As the consultation papers issued as part of the
CSR announcement make clear, the Secretary of State acknowledges
that, in DCMS's relationships with sponsored bodies, arms of different
length have been involved. Ministers do not intend abolishing
the arm's length principle, but they do intend that the Department
should give strategic leadership, and should set a clear policy
framework within which its bodies can operate. Building on the
points made by the Committee about the need to ensure that measurable
and meaningful targets are set and met, Ministers have decided
to set up a tough new watchdog to monitor and improve standards
of efficiency and financial management across all DCMS areas of
responsibility, and to help ensure that DCMS objectives are being
met. As one of its early priorities this body will provide good
practice guidance on commercial activity to help sectors and institutions
maximise the commercial possibilities of their collection and
activities. Ministers also want to establish clearer lines of
accountability between the Department and its sponsored bodies
by improving planning arrangements, building on the new public
expenditure structure. Ministers will introduce three year funding
settlements for the majority of DCMS sponsored bodies and develop
existing funding agreements to place a clear responsibility on
bodies, in return for funding, to deliver improvements in efficiency,
access and private sector sponsorship, and quantified targets
for access, education work and audiences.
Under the new National Lottery Act, the distribution
bodies will be required to produce strategic plans for Lottery
spending in their sectors. These plans, on which the Secretary
of State will be consulted, will among other things need to show
how the bodies are taking into account the Policy Directions which
he issues to them. Without seeking to intrude in casebycase
grant decisions, which are entirely for the bodies themselves,
Ministers are bringing about fundamental changes to the way these
bodies operate through the new Act and the comprehensively rewritten
Policy Directions which the Secretary of State issued to them
on 1 June.
(vii) We recommend
that there should be a presumption that instructions or requests
by Ministers to public bodies in addition to Funding Agreements,
including notes of meetings between Ministers and members of those
bodies, be placed in the public domain (paragraph 30).
Funding agreements, accounts directions and annual
reports are made public as are directions to the National Lottery
distributors, as will the new Lottery strategic plans. All DCMS
nondepartmental public bodies comply with the open government
initiative. The work of the new watchdog body will be published,
and this will be an important means of disseminating best practice.
This will make improve the transparency of the process without
it becoming overly bureaucratic or hindering effective administration.
(viii) We recommend
that short commentaries on the work of the Department's nondepartmental
public bodies should be included in the main body of the Department's
Annual Report rather than annexed to it and that these should
include key performance targets for each body for the current
and forthcoming years and an account of performance against targets
in the preceding year (paragraph 31).
The general structure of annual reports for all Government
departments is set by HM Treasury. However, DCMS will bear in
mind the Committee's recommendation when its next annual report
is prepared.
1Lottery (paragraph 43).
The principle of additionality has been affirmed
by the Prime Minister in last year's White Paper on the National
Lottery, and by the Secretary of State for Culture, Media and
Sport and his Ministerial team in Parliament throughout the passage
of the recent National Lottery Act. The increased level of public
expenditure on DCMS sectors, together with the confirmation of
continuing National Lottery funding beyond 2001 at current shares
for arts, sports, the heritage and charities, demonstrates the
Government's commitment to the principle. The Memorandum to the
Committee indicated that the Government hoped that the reduction
in funding for the National Heritage Memorial Fund (NHMF) would
be for one year only. Ministers continue to recognise the importance
of the NHMF as a separate body able to assist with particular
occasional acquisitions of heritage importance, and have therefore
decided to make good the reduction over the next three years.
Its future allocation will be announced in the autumn, following
the DCMS consultation on the CSR. At times of stringency in public
expenditure control, reductions can occur in Exchequer funding
in areas which also receive Lottery funding, just as they occur
in areas which do not. There is, however, no evidence of which
the Government is aware to support any conclusion that the availability
of Lottery funding has had any direct effect on decisions about
Exchequer funding. Indeed, the outcome of the CSR seems to indicate
precisely the opposite.
(x) We expect
to consider the outcome of the Department for Culture, Media and
Sport's Comprehensive Spending Review in due course. To assist
in Parliamentary and public debate on the outcome, we consider
it essential that the product of the Review does not simply provide
a series of figures and objectives, but sets out in detail the
Government's conclusions on the rationale for the distribution
of public funds to the Department (paragraph 42).
The Treasury White Paper set out the broad rationale
for the funding of DCMS and its sectors. The Secretary of State
has subsequently issued consultation papers setting out the overarching
conclusions of the DCMS Spending Review, his plans for DCMS sectors,
and proposals for regional structures. These have been made available
to the Committee.
(xi) See above under
(ix)
(xii) In our view it is incontestable that
many sectors within the responsibility of the Department for Culture,
Media and Sport are underfunded. We expect the Government
to demonstrate in the outcome of the Comprehensive Spending Review
that it has recognised this. That outcome must reflect the value
of expenditure by the Department as investment with economic and
social gains, as well as benefits which will be felt in the minds
and bodies of people across the country, but cannot easily be
measured and matter no less for that (paragraph 44).
The Government has allocated an extra £290 million
for DCMS sectors, to deliver the Department's new principal objectives
of access, excellence, education and economic benefit, as well
as future stability in the allocation of Lottery funding. The
new approach of three year settlements will help DCMS-sponsored
bodies to plan properly for the future, escaping from the uncertainties
of the annual public expenditure round. The proposals for the
streamlining of bodies will also ensure that more money goes to
cultural, sporting and tourism activity on the ground rather than
being taken up in administration.
(xiii) Valuation of
nonoperational heritage assets and consequential charging
might create the impression that assets held in trust for the
nation were seen as potentially disposable. We regard the notion
of valuing nonoperational heritage assets as simply absurd.
While we accept that the definition of a nonoperational
heritage asset might need to be tightly drawn, we can see no justification
for the valuation of such assets and consequent notional capital
charging following the introduction of Resource Accounting. Such
a methodology, if adopted, could weaken still further the financial
resources of the Department and the bodies which it funds or sponsors
(paragraph 47).
The Government notes the helpful views of the Committee
on this issue. Discussions between DCMS and the Treasury are continuing.
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