Memorandum submitted by the Arts Council
THE CASE FOR THE RESTRUCTURE OF THE ARTS
FUNDING AND DEVELOPMENT SYSTEM IN ENGLAND
The Arts Council of England is the national
body for the arts, responsible for arts development, leadership,
policy, research and advocacy. The Arts Council provides funding
for arts organisations and artists, both directly and through
funding to the 10 Regional Arts Boards. The Arts Council receives
grant-in-aid funding (£252 million in 2001-02 rising to £337
million in 2003-04) from the Department for Culture, Media and
Sport to develop, sustain and promote the arts, and is also a
distributor of money raised through the National Lottery.
On 15 March 2001, the Arts Council of England
published proposals to create a new single arts funding and development
organisation. The new organisation will combine the Arts Council
with the 10 regional arts boards. The benefits of a single, national
arts funding organisation are outlined in this submission to the
The principal aim of the restructuring is to
create a better future for the arts and audiences in England.
Other key objectives of the restructuring include:
More funds for artists and arts organisations,
as the proposals should liberate an additional £8-10 million
for the arts each year through administrative savings at national
and regional level. Currently, £36 million is spent on administration
across the Arts Council of England and the Regional Arts Boards
(financial year 2000-01).
Simpler procedures for funding arts
organisations and individual artists. The number of funding schemes
will reduce from over 100 currently to around 10 or fewer.
To eliminate duplication of effort
and cut down on bureaucracy.
Better communication with artists
and arts organisations.
Regional diversity within a national
context, with increased funding and decision-making responsibility
at regional and local level, and greater regional input at national
Greater consistency in decision-making
on grant programmes and services across England, within an agreed
national framework, so that artists everywhere have the same opportunities,
A greater role for local and regional
government in the funding of the arts.
Improved financial accountability.
Increased flexibility to respond
to new ideas.
Arts officers freed from day-to-day
administration to help lever additional funds for the arts.
An authoritative and united national
voice for the arts in England.
The proposal is to unite 11 separate bodies
(the Arts Council and 10 RABs) to create a single organisation
to support and develop the arts in England. The new organisation
will have nine powerful regional offices, matching the Government's
regional boundaries. Each region will have a council with increased
decision-making powers. Working in partnership with local authorities
and other regional agencies, the regional offices will play a
leadership role regionally and will have responsibility for all
regularly funded arts organisations and for direct contact with
artists in their area. More funding will be decided regionally
than is now the case.
The organisation will have a national office
that will provide national co-ordination, overview and national
leadership in the arts. The chairs of the regional councils will
sit on the national council of the new organisation. Local authority
and regional government representation on the regional councils
will be strengthened.
Over the past six months the Arts Council and
the RABs have been working together to develop plans for the new
organisation. The Arts Council has invited the RABs to transfer
into the new organisation with effect from 31 March 2002.
The Secretary of State for Culture, Media and
Sport has welcomed the proposal and has described it as a key
piece of public sector reform. The Minister for the Arts wrote
to the Arts Council's Chairman, Gerry Robinson on 21 December
2001 expressing her unequivocal support for the changes.
The new organisation provides clear overall
accountability for all its work, regionally and nationally. The
national Council will be greatly assisted in delivering overall
accountability through its structural link to strong regional
councils with considerable delegated powers. This is necessary
and welcome given the scale of public funding of the arts. Such
accountability and transparency will improve public perception
of the arts.
The new organisation provides an accountability
structure within which greater decision-making can be located
regionally than is the case now. Such further delegation could
not have been provided by the Arts Council to the RABs because
of insufficient accountability, particularly to Parliament. Further
delegation to the regions will be of benefit to the arts themselves
and strengthen the status of the arts.
The new organisation will strengthen and modernise
its relationship with local government. It will formally recognise
the role of regional government and regional development agencies.
Partnership, nationally and regionally, will be key to its work.
It will strengthen its brokerage role with all major partners
and funders of the arts both nationally and regionally, with considerable
benefits to the arts community.
Consistency and simplicity
The new organisation will run fewer, more easily
understood, funding programmes with more consistency from region
to region. It will show more trust towards arts organisations
with less heavy handed monitoring. This will free the arts community
to spend more time and energy making interesting and challenging
The new organisation will have the confidence
to publicly express views about the arts and the place of the
arts in society. It will not be afraid to speak up for artists.
Its voice will be heard regionally and nationally. At times it
will make the case as one, at times in its constituent parts.
It will be a compelling, credible champion for the arts in England,
in all regions and localities.
The new organisation will commission research
and, as one organisation, will have instant access to the full
casebook of achievements of the arts in all parts of England.
That evidence base will be a powerful tool in making the case
for more resources for the arts, thereby improving resource prospects
for the arts community.
The new organisation will have the capacity
to act as one throughout England in a comprehensive and co-ordinated
manner when such action is agreedfor example, in terms
of Cultural Diversity. This will do much to demonstrate to the
public and the arts community, our ability to take comprehensive
and far-reaching action when it is needed.
The new organisation will seek to streamline
duplicate functions across 11 separate bodies, such as service
functions. It will ensure that those working in arts development
nationally and regionally act together. Overall costs will be
reduced and savings will be returned to frontline arts activity.
The arts community will be a clear beneficiary.
The new organisation will introduce modern,
technologically based systems delivering speedy internal communications
and instant access to financial and other statistical data. This
will considerably strengthen its ability to back up arguments
with fact, and to show substantive evidence in support of the
case for more resources for the arts.
Quality of service
The new organisation will be in a strong position
to apply common performance standards consistently across all
its parts, highlighting and learning from the best practice. This
will self evidently benefit the arts community and other partners.
The single organisation will agree a common
framework for the evaluation and monitoring of the arts, including
the assessment of quality. Coupled with greater clarity and more
direct communications with the arts community over the outcome
of applications and other requests for assistance, as well as
a single appeal mechanism, this will greatly improve the transparency
of the service to the arts community.
The new organisation and its funded organisations
will be branded so as to be easily recognisable everywhere. A
clear identity will help show the how much is being achieved in
the arts in all parts of England. This will add significantly
to the positive repositioning of the arts.
The new organisation will harness a powerful
team, working as one and delivering clear messages, organising
campaigns and advocating on behalf of the arts community with
clarity and impact, nationally and regionally. This will lead
to greater public recognition and support for the arts.
Whole greater than the parts
The new organisation provides a structure whereby
regional views are part of the national debate (at Council and
in the Executive Board) and where national views are part of the
regional debate (in Regional Arts Councils and in the many relationships
between national and regional staff). Such mutual recognition
and understanding is certain to result in a more effective "system",
thereby, strengthening the stature of the arts.
It is accepted that some of the above benefits
can be achieved in part within the current 11 organisation structure.
However, a single organisation is essential to the delivery of
some of these benefits. And without exception, all of the above
benefits can be delivered more fully and more quickly within a
single organisation, than through the current 11 organisation
We are pleased to be able to present our plans
to the Committee and address any concerns or questions that Members
REDEVELOPMENT PROPOSALS FOR THE ROYAL SHAKESPEARE
COMPANY AND THE SOUTH BANK CENTRE
This evidence concentrates on the Arts Council
of England's relationship with the Royal Shakespeare Company and
the South Bank Centre and specifically with their redevelopment
proposals. We are aware that both arts organisations are providing
the Committee with detailed accounts of their capital proposals,
and this briefing note does not attempt to replicate that information.
Both the Royal Shakespeare Company and the South
Bank Centre have been allocated funds from the Arts Council's
first Capital Programme. That programme, established in 1995,
has distributed awards totalling more than £1 billion across
2,300 projects across England.
There are firm criteria against which all applications
to the Capital Programme are assessed. The first of these is public
benefit. Proposals have to provide new or improved opportunities
for public enjoyment of, or participation in, arts activities
and there must be evidence that the project will produce maximum
accessibility to all sections of society. Financial viability
and quality of management is another key criteria. In addition
to meeting the criteria and priorities of the scheme, each applicant
must also provide partnership funding for their project.
The Arts Council, through its Capital Services
department, has rigorous processes for assessing, monitoring and
evaluating applications to its Capital Programme. It looks not
only at the risk inherent in each capital project itself, but
also at the risk it poses to the core activity of the arts organisation.
Over the six years of the first Capital Programme the Arts Council
has gained extensive experience of risk managing a wide range
of projects and has worked hard to develop and improve its monitoring
and assessment processes.
Major capital awards are released in limited
tranches, which are determined by the stages of the work being
undertaken. They are closely monitored throughout the life of
the project, with periodic key-stage reviews, which re-examine
all aspects of the progress of the project. Assessment is undertaken
according to accepted methodologies and Treasury guidelines, and
using external expertise where appropriate. The assessment process
is as much about producing a matrix of risk identification and
judgement as it is about simply making a recommendation for or
The Royal Shakespeare Company is one of two
national theatre companies that the Arts Council funds, the other
being the Royal National Theatre. The Royal Shakespeare Company
receives grant-in-aid funding of £10,271,047 in 2001-02 for
its activities in Stratford-upon-Avon, London and the regions
of England from the Arts Council.
The capital project is for the transformation
of the Royal Shakespeare Company's 14-acre waterfront site in
Stratford-upon-Avon. The Arts Council has allocated £50 million
for this project.
A strong case has been made by the Royal Shakespeare
Company for the need for capital investment in its three theatres
in Stratford-upon-Avon. The current Royal Shakespeare Theatre
is in genuine need of extensive modernisation. Many of the facilities
and backstage working conditions have not changed since the theatre
was built in 1932. The shared backstage facilities between the
Royal Shakespeare Theatre and the Swan Theatre do not adequately
serve the needs of either. Cafes, restaurants and extra seats
have been added to the theatre over the years, and as it has grown,
the Royal Shakespeare Theatre has become increasingly unsatisfactory
for audiences, actors and staff. Its deficiency presents a growing
concern around health and safety as well as disability access,
and significantly impacts on operational costs.
The principal projects proposed in the proposals
for the redevelopment of the Royal Shakespeare Company's Stratford
The construction of a new 1,050-seat
theatre as the Royal Shakespeare Company's principal performing
space for Shakespeare and classical repertoire, on the site of
the Royal Shakespeare Theatre.
The creation of new backstage facilities
and technical delivery access for the Swan Theatre, together with
refurbishment and improvement of its audience spaces including
the Library and Gallery.
The construction of a new adaptable
auditorium as an extension of The Other Place Theatre on its current
The creation of teaching and support
facilities for the Royal Shakespeare Company Academy using the
present Union Club site.
Improved audience & technical
The broader context
The Royal Shakespeare Company's broader strategy
for the development of the organisation and its audiences has
changed considerably since the capital proposals began to be developed.
The Royal Shakespeare Company is now undergoing major change in
terms of its structure and artistic programming. The Arts Council
has welcomed the wide-ranging review of its operations and the
broad thrust of its plans and is supportive of the move towards
a more agile model on the understanding that the substantial change
envisaged will enable the Royal Shakespeare Company to fulfil
its role in the 21st century and deliver real benefits to artists
While the Royal Shakespeare Company's capital
proposals may have preceded the broader proposals for change but
they now form part of a single strategy and are inextricably linked
to the new artistic vision and the benefits this will deliver
to artists and audiences. Therefore, it is appropriate that the
Arts Council responds to the Royal Shakespeare Company as a corporate
The key issues it is addressing as it considers
both the capital proposals and the Royal Shakespeare Company's
strategy for organisational and artistic change are:
The benefits that this scale of change
will deliver to artists and to the public;
The robustness of the strategy for
financing the proposals;
The organisational capacity required
to deliver the proposals and the strategy.
The Background to the Redevelopment Proposals
In 1996, the Arts Council awarded the Royal
Shakespeare Company £100,000 towards the cost of a comprehensive
planning study to evaluate the options available and so determine
the best long-term regeneration strategy for its Stratford theatres.
In 1999, the Arts Council allocated £50
million to the Royal Shakespeare Company's redevelopment project,
subject to the assessment of an application.
In 2000, the Arts Council awarded the Royal
Shakespeare Company a grant of £755,140 (from the £50
million allocation) to enable it to complete its feasibility work
to a robust level. The award has enabled Royal Shakespeare Company
to develop its Redevelopment Plan in consultation with a design
team led by the architects Erick van Egeraat and Michael Rushe.
It has also collected data to inform their business planning to
2011 and drawn up a risk register for the project.
In December 2001, the Royal Shakespeare Company
submitted its feasibility study to the Arts Council and this is
currently being reviewed. The study is a detailed and comprehensive
document covering not only plans for the physical redevelopment
of the performing spaces, but broader issues of its location within
the economic and social infrastructure of Stratford, and the overall
business plan for the Company. It draws on consultation with local
authorities and other interested bodies and individuals.
The local partners, including the three local
authorities, see the proposed redevelopment of a Royal Shakespeare
Company "theatre village" as a central part of the wider
vision for Stratford in the 21st Century. Stratford is already
a key destination and, following the redevelopment, it is intended
to deliver a significant increase in the volume of overnight stays
of national and international tourists and business visitors in
the West Midlands.
In the knowledge that the Arts Council has allocated
funds of £50 million, the Royal Shakespeare Company is working
to a total budget of £100 million. The provisional timetable
for the project indicates the delivery of the major components
of the scheme by 2007-08. However, should the project be the subject
of a public enquiry, it will add a further two years to the timetable.
The Arts Council will review the feasibility
study and give comments to the Royal Shakespeare Company prior
to the submission of an application for the stage two design development
of the scheme. It is clear that the work to date has been executed
in a great deal of detail and to a high standard. Further, more
detailed work is taking place in January to look at the proposals
for The Other Place, the Swan and the new proposed Royal Shakespeare
theatres. The appropriateness of these spaces to the artistic,
financial and organisational needs of the emerging new organisation
will be tested. There is discussion to be had on the transitional
planning through closure, demolition and rebuilding and an analysis
of the risks the project faces. It is vital that, throughout the
seven years of the capital project, continuity is maintained at
artistic, operational and governance level.
As with any project of this scale, before accepting
a further application from the Royal Shakespeare Company to enable
the design development of the scheme, the Arts Council will need
to be satisfied on several counts: value for money; cost benefit;
risk identification and mitigation, cost control.
The Arts Council will come to a view of the
feasibility study and the key issues by Spring 2002.
The Arts Council has been consistently supportive
of the need for major redevelopment of the South Bank Centre site.
It has also acknowledged the challenges that the Centre faces
in undertaking that redevelopment. This is a major project that
involves complex issues of urban regeneration as well as those
of the world's largest arts centre and its individual buildings.
It requires a delicate balance of cultural and commercial development,
and the co-ordination of some 40 stakeholders on a high-profile
site with unique characteristics.
A Brief History of the South Bank Centre
The building of the Royal Festival Hall, which
opened in 1951, was London County Council's first major commitment
to the arts. In 1967 LCC opened the Hayward Gallery and also the
Queen Elizabeth Hall and the Purcell Room. Shortly after this
the LCC was replaced by the Greater London Council.
In April 1986, following the abolition of the
Greater London Council, the buildings and their immediate curtilage
became vested in the Arts Council of Great Britain and the open
spaces were vested in the London Residuary Body. The LRB then
decided to transfer the bulk of these open spaces to the Arts
Council of Great Britain.
The South Bank Board Limited was founded in
1988. It acts as sole corporate trustee of the South Bank Centre
Charitable Foundation and runs a 27 acre site which it has on
a 150-year lease from the Arts Council of England. The Arts Council
holds the freehold on behalf of the Government in the form of
the Department for Culture, Media and Sport.
The site stretches from County Hall to Waterloo
Bridge. Its arts buildings include the Grade 1 listed Royal Festival
Hall (with the Saison Poetry Library), Queen Elizabeth Hall, Purcell
Room, and the Hayward Gallery. The British Film Institute is an
independent organisation that is a sub-tenant of the South Bank
Centre and it manages the National Film Theatre under Waterloo
Bridge and the IMAX cinema in the Waterloo roundabout. The public
realm comprises Jubilee Gardens, the Hungerford Car Park, Queen's
Walk from County Hall to the Royal National Theatre, pedestrian
routes from Hungerford footbridgelinking Trafalgar Square
to Waterloo Stationand two service lanes and delivery yards.
The South Bank Centre is a national revenue
client of the Arts Council, receiving £15.7 million revenue
support in 2001-02.
The Background to the Redevelopment
Over the past two decades a number of attempts
have been made to improve and develop the South Bank Centre site.
These have included the 1983 Cedric Price scheme which was dropped
with the abolition of the GLC, and the Terry Farrell schemes of
1985 and 1989 which were to be financed primarily from commercial
development. The Farrell schemes were dropped when the property
market collapsed in 1991.
With the advent of Lottery funding, the Arts
Council awarded two grants totalling £2,180,000 (£980,000
in 1995 and £1.2 million in 1996) for feasibility and design
development of a new scheme by Sir Richard Rogers. In awarding
the second grant, the Arts Council insisted that the cost of the
scheme would need to be brought down significantly. However, the
costs could not be brought down to a level that matched the Lottery
funds available. An application for £113 million was finally
rejected in March 1998 as not representing good value for money
for the Lottery portfolio and the scheme was abandoned.
The New Approach- the Rick Mather Masterplan
In the spring of 1998, the Department for Culture,
Media and Sport appointed Elliott Bernerd, Chairman of property
company Chelsfield plc, as Chairman of the South Bank Centre,
and charged him with the responsibility of working with all stakeholders
to bring the arts complex up to world class standards.
In May 1999, Karsten Witt was appointed Chief
Executive of the South Bank Centre and Rick Mather was appointed
as its masterplanner. Rick Mather's approach to the redevelopment
had two main parts: an Urban Design Strategy providing a design
framework for the component parts and an evaluation of different
options for development within the design strategy. This method,
welcomed by the Arts Council, was intended to replace the "all
or nothing" proposals of the past with an incremental approach.
It was intended that the different component parts would be taken
forward as finance became available. It was also intended that
commercial development would significantly help to finance the
In July 1999, the Arts Council agreed an in
principle allocation (not a grant) of £25 million towards
the Masterplan, subject to detailed assessment of formal applications.
To date the Arts Council has agreed two grants from this allocation:
£898,690 (in October 1999) towards the costs of the Masterplan,
and £937,000 (in January 2000) for purchase of the Waterloo
Undercroft, the strip of property underneath the southern approach
to Waterloo Bridge, so creating a cohesive site. The Arts Council's
assessment work included an independent report from Strategic
Planning Associates, focusing on some of the critical economic
and planning risks.
In making these two grants, the Arts Council
set out a detailed framework of actions that it required, including:
the articulation of an artistic vision commensurate with SBC's
status as a world class arts facility; an economic options appraisal;
business modelling; outline costings and financing strategy; critical
path analysis and milestones; a comprehensive risk analysis and
risk management strategy.
The Arts Council recognised that, even with
the new incremental approach of the Masterplan, the complex and
often conflicting demands of balancing the arts needs with commercial
development, the fundraising challenge, conservation and planning
requirements were going to be a tough call. That said, it was
encouraged by initial progress. The Masterplan was generally well
received, and Elliott Bernerd began to pursue active negotiations
with Shell, who had their own development plans for the adjacent
site, around possible collaboration. SBC also undertook an impressive
exercise in public consultation on the Masterplan and the different
options within it.
By the Spring 2000, however, the Arts Council
had registered a number of concerns including a lack of progress
on the redevelopment. These were conveyed frankly to the SBC's
senior management in meetings and correspondence over the summer.
In September 2000 the South Bank Centre responded
by providing a major report giving an update on progress on the
Masterplan and incorporating the requested statement on artistic
vision. In this report the realisation of the options within the
Masterplan were outlined in more detail; outline costs and funding
proposals were articulated for the first time. The Arts Council
asked for the section on the artistic vision to be developed further
and reiterated its concern over the progress of the project.
The Arts Council also questioned the proposal
to build a fourth concert hall. Partly to examine this but also
with a wider use in mind, it undertook a comprehensive audience
analysis over five years of the major London concert halls. This
study contributed to the final decision by the South Bank Centre
to drop proposals for the fourth hall.
In January 2001, the South Bank Centre produced
a comprehensive Economic Options Appraisal for the Arts Council
and DCMS. This was a thorough piece of work, but did not lessen
the fundraising task or other challenges.
In Spring 2001, the Arts Council continued to
work closely with both the South Bank Centre and DCMS and to monitor
the development of the proposals. It expressed concerns about
the deliverability of key aspects of the Masterplan and adopted
a pragmatic position of encouraging the South Bank Centre to concentrate
as an immediate priority on progressing the refurbishment of the
Royal Festival Hallas a first, attainable step towards
the wider redevelopment of the South Bank.
In August 2001, the South Bank Centre announced
a major organisational review and Karsten Witt announced his intention
to step down from the role of Chief Executive.
In September 2001, the South Bank Centre established
a Review Group which, along with the SBC Board, has dealt with
a number of key organisational issues relating to the structure
and management of the South Bank Centre.
The Arts Council confirmed that it was prepared,
in principle, to allocate up to £20 million for the refurbishment
of the Royal Festival Hall. The £20 million forms part of
the original £25 million allocation made in July 1999.
In November 2001, the South Bank Centre Board
made a number of key decisions:
It decided to retain the core "arts
centre" concept, rejecting a proposal to separate the component
parts of the South Bank Centre (Concert Halls, Hayward Gallery,
It began the search for a new Chief
Executive. Paul Mason, SBC's Finance Director, was appointed to
take over as Acting Chief Executive, when Karsten Witt left the
organisation in December 2001.
It considered a paper setting out
six options for the redevelopment (all within the urban design
strategy outlined by the Masterplan). The Board came to the view
that the development under Jubilee Gardens was unlikely to be
deliverable following discussions with Lambeth Council and neighbouring
landowners. Its preferred option was to proceed with cultural
and commercial development on the Hungerford car park site only
while allowing some expansion of the park.
In consequence of the possible reduction of space
for commercial development the South Bank Centre is now:
Conducting a review of performance
In partnership with the British
Film Institute, reviewing the film centre requirement
Exploring a not-for-profit Trust
for Jubilee Gardens and the Queen's Walk in partnership with the
neighbouring landowners and the local community to permit the
re-landscaping to proceed as a first phase of this part of the
The Current Position
1. The Royal Festival Hall
Both the Arts Council and the South Bank Centre
believe that the refurbishment of the RFH should be the first
tangible sign of real development on the South Bank. SBC is currently
working on a revised scheme for the refurbishment. In September
2001 the Arts Council set out a clear view on how this should
be taken forward. It is prepared to allocate up to £20 million
(from its remaining allocation of £23,163,810) for that refurbishment.
SBC is hopeful that the Heritage Lottery Fund will allocate an
equivalent sum of £20 million for the scheme. The Arts Council's
support is absolutely dependent on keeping the scheme within a
realistic costno more than £54 million (this has been
accepted by SBC). It is looking for a number of other critical
issues to be resolved. On this basis, it has encouraged the submission
of an application from SBC for design development (not for the
full scheme) of the refurbishment scheme. This is expected at
the end of January.
2. The Masterplan
The articulation of the revised options for
the Masterplan development of the site represents the most pragmatic
attempt to date to deal with the issues, including those of planning
and funding. The Arts Council is now waiting for the South Bank
Centre to present these revised options formally to the Arts Council
as well as DCMS, and to submit an application to fund the next
stage of work to take these options forward. However, these options
do highlight a challenge in terms of the level of public funding
The Arts Council believes that while it is clearly
the role of the incoming Chief Executive to drive forward development
proposals and centre them on a compelling artistic vision for
the site, those proposals will only be deliverable if a new and
powerful stakeholder partnership is forged. Such a partnership
must embrace, among others, the London Borough of Lambeth, the
Mayor of London and Greater London Assembly, London Development
Agency, and the Government Office for London. The Arts Council
can play a significant role in helping to bring this together,
but a strong network of champions will be critical in creating
the political will needed to transform the South Bank complex.