Select Committee on Culture, Media and Sport Minutes of Evidence

Memorandum submitted by the Arts Council of 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 Select Committee.


  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 level.

    —  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, where appropriate.

    —  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 art.


  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 agreed—for 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 structure.

  We are pleased to be able to present our plans to the Committee and address any concerns or questions that Members may have.


  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 against funding.


  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 site are:

    —  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 car park.

    —  The creation of teaching and support facilities for the Royal Shakespeare Company Academy using the present Union Club site.

    —  Improved audience & technical support facilities.

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 and audiences.

  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 whole.

  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 footbridge—linking Trafalgar Square to Waterloo Station—and 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 scheme.

  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 Hall—as 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, Poetry Library).

    —  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 hall provisions

      —  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 site.

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 cost—no 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 needed.

  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.

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