APPENDIX 65
Memorandum submitted by the Department
for Culture, Media and Sport
SUMMARY
DCMS welcomes the Select Committee's interest
in the reorganisation of the Arts Council of England and the capital
development projects of the Royal Shakespeare Company and the
South Bank Centre. This memorandum sets out our views on all three
subjects.
THE REORGANISATION
OF THE
ARTS COUNCIL
OF ENGLAND
Introduction
1. The Arts Council of England is a Non-Departmental
Public Body of the Department for Culture, Media and Sport responsible
for the distribution of Grant-in-Aid and Lottery funding for the
arts. It is reorganising the arts funding system in order to reduce
bureaucracy within the system, make administrative savings and
increase the amount of funding distributed at a regional level.
The Government endorses these aims and is monitoring this process
closely to make sure that they are achieved.
Background
2. The Arts Council published its proposals
to create a single arts funding and development organisation in
Prospectus for Change on 15 March 2001. That document proposed
a new system of support for the arts in England through a new,
single, national body that would assume the functions of the present
Arts Council of England and the 10 independently constituted Regional
Arts Boards. Following the publication of the Prospectus,
consultation took place with the Regional Arts Boards and regional
partners including Regional Assemblies, Regional Development Agencies
and local authorities. The Arts Council subsequently published
its follow up to the original Prospectus, Working Together
for the Arts, on 16 July 2001. This was followed by a three-month
consultation period.
3. Building upon the responses received
through the second consultation exercise the Arts Council produced
a Draft Transfer Proposal in November 2001. This document set
out the basis on which Regional Arts Boards were to be asked to
finalise their decision to commit to the new, single arts funding
and development body for England. The document addressed issues
that had been raised by the Regional Arts Boards and was intended
to provide the assurances necessary for them to agree to the transfer
of assets and staff to the new organisation.
4. In January 2002 the Arts Council produced
its final Transfer Proposals based on the feedback from Regional
Arts Boards on the Draft Transfer Proposals. The Regional Arts
Boards have now all considered these proposals and have formally
agreed, in principle, to the new, single arts funding and development
body for England by transferring their staff and assets to the
new organisation.
The Government's View
5. The proposed reorganisation is an internal
matter for the Arts Council which operates at arm's-length from
the Government. The Government's aim is that the new organisation
delivers real benefits for the arts and artists. The Arts Council
has been trying for sometime to reduce the level of bureaucracy
involved in the funding of the arts and the Government also wishes
to see a more streamlined and less bureaucratic system.
6. The Arts Council's Draft Transfer Proposals
were assessed by the Department for Culture, Media and Sport and
on 21 December 2001 Baroness Blackstone, Minister for Arts, wrote
to the Chairman of the Arts Council firmly endorsing the direction
the Arts Council was pursuing in building a new, single arts funding
and development body for England (copy of letter attached).
7. The Government continues to monitor closely
the progress of the Arts Council as it implements its plans for
a single organisation for arts funding. It has emphasised it wants
to see administrative savings throughout the system allowing increased
funding for arts organisations and leading to greater scope in
the regions to award that funding in the light of regional priorities.
8. The Government believes that this is
a sensible way of giving greater power and responsibility to the
regions whilst retaining the arm's-length principle of arts funding.
In the new funding system, the regions will receive increased
funding; they currently receive approximately 40 per cent of all
Arts Council funds, in the future it is proposed that they will
receive over 70 per cent. They will also retain the autonomy to
decide how to apply those resources within a national framework.
There will be greater regional accountability by increasing the
number of Local Authority representatives on the Regional Councils
from two or three to six (two-fifths) and each Regional Council
will be represented on the National Council by their Chair. The
proposed system preserves the arm's-length principle under which
the arts have been funded for over 50 years and, which would be
removed if funding were managed by central or regional government.
The reorganisation is about transferring power to the regions,
while at the same time strengthening links with what will become
a smaller, more efficient central National Office. This strengthened
national and regional role will deliver a more responsive service
to artists and audiences throughout the country.
Regional structures and legal context
9. The current Regional Arts Boards are
independent, charitable companies which are not directly accountable
to Parliament. Their role is to distribute arts funding, to develop
and provide advocacy for the arts within one of ten regions. The
majority of their funding comes from the Arts Council but they
also have access to other funding via local authorities and the
Regional Development Agencies. The relationship with the Arts
Council is formalised in an annual funding agreement. They are
distinct from the Regional Cultural Consortiums, which have a
broader remit that include the arts, sport and tourism. For information,
a Memorandum on the Regional Cultural Consortiums is attached.
10. The Arts Council is also a charitable
body incorporated by Royal Charter. In the proposed reorganisation
it will become the National Office of the new funding system and
will take on the assets and staff of the 10 Regional Arts Boards.
It will have a supplemental Royal Charter to reflect the new regional
role as well as a new Council in order better to represent regional
interests.
11. According to the Arts Council proposals,
the 10 independent Regional Arts Boards will be replaced by nine
regional offices of the new National Office called Regional Arts
Councils. These Regional Arts Councils will each have a director
line managed by the Chief Executive of the National Office and
a chair who will represent the region on the National Council.
12. The mechanics of moving to this position
are as follows: The old Regional Arts Boards have agreed, in principle,
to pass over their assets and staff to the Arts Council from April
2002. They will continue to exist as shadow organisations until
such time as a process of due diligence has determined that they
have no further liabilities. The supplemental charter will take
effect in April and, in May, a new Council will take control of
the organisation following appointment by the Secretary of State.
13. All staff of Regional Councils, or those
with a fixed term contract of 12 months service, will be eligible
to TUPE transfer. The new organisation will adopt a standard set
of terms and conditions over time as staff move on or are replaced.
The Government has no direct responsibility for the staff, they
are the responsibility of the Regional Arts Boards and, from the
time of hand over, the Arts Council, which is independent of Government.
Under the Arts Council's Financial Memorandum the DCMS does have
control over some terms and conditions and the annual pay negotiating
remit.
14. The Government requires that the new
National Council reflect the nine Government Office regional boundaries
when setting up the Regional Councils. This should enable those
seeking arts funding or advice greater access to alternative sources
of support for their work. The new Regional Councils will work
closely with other regional bodies such as Regional Development
Agencies and Regional Cultural Consortia who will also be invited
to nominate potential members of their boards.
The Business Case
15. The business case for the reorganisation
is not based solely on administrative savings. A single organisation
will be simpler, more streamlined and easier to manage than the
complex system currently in place. This will improve the service
to customers, create closer links between policy and implementation
and speed up decision-making. In addition, the Government expects
to see administrative savings. The target for these has been set
at between £8 million and £10 million. Detailed work
on the new structure of the organisation will start as soon as
staff and assets have been transferred from the Regional Arts
Boards to the new National Council; it is not until this stage
that an accurate assessment of administrative savings will be
possible. At that time the Government will monitor the restructuring
to ensure that the administrative savings are not made at the
cost of quality of service.
Funding
16. The Grant-in-Aid allocation for the
Arts Council is shown below:
GRANT-IN-AID FOR THE ARTS COUNCIL OF ENGLAND
| 2000-01
| 2001-02 | 2002-03
| 2003-04 |
| £237.2 million | £252.2 million
| £297 million | £336.8 million
|
Next Steps
17. The Regional Arts Boards have now all agreed, in
principle, to transfer their assets and staff to the new organisation.
The Government wishes to see the new organisation in place as
soon as possible. A supplemental Charter, which will underpin
the new organisation, will be submitted to the Secretary of State
for her approval and representation to the Privy Council by the
end of March. The Secretary of State will also appoint members
to the new National Council by the end of April. Once the new
organisation is in place the Arts Council will submit plans for
the internal restructuring which will crystallise the requisite
savings. The Government will continue to monitor the process towards
delivering improved value for arts organisations and the public.
ROYAL SHAKESPEARE
COMPANYRelationship between
DCMS and the Royal Shakespeare Company
1. In common with other bodies funded by the Arts Council
of England under the arm's-length principle, the Government plays
no role in determining levels of revenue or capital funding for
the RSC. We expect the Arts Council to scrutinise and support
its activities in a rigorous and effective manner. However, as
one of our principal national companies, the RSC plays a vital
role in the delivery of the Government's objectives for the arts.
Its wider cultural impact is also recognised in education, tourism,
culture-led regeneration and perceptions of Britain abroad.
2. The Government therefore properly takes an interest
in the activities of the company, in its plans to redevelop its
Stratford home, and the major strategy for change on which it
has recently embarked. We champion the work of the RSC and other
arts organisations within Government, and seek to ensure greater
recognition of the contribution of the arts to education, social
inclusion, community development and economic prosperity.
Views on the RSC's strategy for change
3. Recent changes in the RSC's leadership at board and
management level have refocused the company's priorities, though
of course Adrian Noble's ongoing personal contribution remains
key to the success of the organisation. The Government supports
the broad thrust of the strategy for change announced by the RSC
last year. In particular, we welcomed the commitment to: develop
new audiences and new opportunities for artists by performing
in new venues; strengthen touring work to enable as many people
as possible, and in particular young people, the opportunity to
experience the RSC's work; to strengthen education work; and to
develop young talent—whether in acting, writing or the technical
professions. As one of our strongest cultural ambassadors, we
also welcomed the commitment to pursue international partnerships
which build on the high profile and positive reputation the company
enjoys abroad.
4. While endorsing the admirable goals the RSC has set
itself, however, we recognise that this is an ambitious agenda,
and it will take sustained and focused efforts by the entire company—artists,
professional and technical staff, board and management—to
deliver it effectively. There are risks of raised expectations
and criticism from those who are resistant to change for a variety
of reasons. Throughout this process the RSC will need to ensure
its audiences continue to be offered the highest artistic standards,
and that the interests of its many stakeholders can be effectively
reconciled. In terms of resources, we will continue to work with
the Arts Council to reward excellence throughout the arts, but
that does not mean that the national companies will be rewarded
at the expense of smaller organisations. Even with the additional
funding for the arts which has been secured for the next three
years, we will not be able to remedy in full the effects of the
chronic under-funding of the last two decades.
5. The RSC's ambition to engage new audiences and to
break down the perceived exclusiveness of theatre is at one with
our policies on social inclusion and access. Performing in London
venues such as the Tricycle and the Roundhouse will open up the
whole experience of theatre to new audiences. This does not mean,
however, that its core audience of passionate and committed theatre-goers
should be abandoned. The goal should be to increase the audience
overall, not to exchange one for another. Artistically, we recognise
the need for the RSC and other arts organisations to take risks.
Not all of their planned activities will succeed. Indeed there
would be grounds for suspicion if anyone in the arts claimed a
100 per cent success rate. Great art is rarely achieved at the
first attempt, and a number of failed endeavours will often precede
success. Judgement on whether the RSC's changes to artistic programming
are a success or not will only be possible once they have been
allowed to run.
6. It is vital that the RSC continues to strive for excellence
with consistently strong productions. Much of the RSC's work reflects
the ideas set out in our Culture and Creativity Green Paper and
there is certainly a valuable role for the RSC to play in Creative
Partnerships, which will give school children and their teachers
the opportunity to explore their creativity by working on sustained
projects with creative professionals.
Views on the proposed Stratford Development
7. The proposals for the Stratford development are both
exciting and ambitious. We recognise that this is a once in a
generation opportunity to address the shortcomings of the site
and to provide an experience which artists and audiences deserve
and expect in the 21st century. The prospect of National Lottery
funding has enabled the RSC to develop a vision, which is both
radical and deliverable. Although they have sensibly planned around
a long timetable, it will be important to sustain a positive momentum
to the development. There is a great deal of goodwill for the
RSC to succeed, as the successful achievement of the plans for
the site will not only benefit the company, but the whole of the
local and regional economy. Any development of the site must of
course maintain a proper balance between public and commercial
interests, and take proper account of the historical significance
of the site. We welcome the wide consultation the RSC has undertaken
so far, and believe that while a consensus may prove difficult
to achieve, it will continue to be important for all the stakeholders
in the development to be properly involved at each stage.
8. We welcome too the close collaborative relationship
which has been forged between the RSC and the Arts Council on
this project, and we believe this has already enabled the RSC
to avoid some of the pitfalls which have beset other Lottery capital
projects. £50m is obviously a significant sum to allocate
to a single project, and the Arts Council has rightly been rigorous
in its assessment of the project so far. The Arts Council now
has a great deal of expertise in this area and we are confident
that they will be diligent in ensuring that funding is not released
without the necessary assurances of what realistically can be
achieved within the proposed budgetary projections. It is for
the Arts Council to opine on the feasibility study, and we would
not want to anticipate the outcome of that process at this time.
9. DCMS' role in this process is to ensure that wherever
possible, we can identify any potential risks at an early stage
and keep other key stakeholders focussed on the issues. For example,
it is imperative in the case of the Stratford development that
transport and other infrastructure issues are addressed effectively
through a joined-up approach by local and regional government
and DTLR. We can help to secure this approach.
10. Much of the feasibility study centres on the future
of the 1932 Elizabeth Scott listed II* Royal Shakespeare Theatre.
We recognise the many shortcomings of the current RST. The RSC's
preferred option would involve demolition of the building. Given
our statutory responsibilities for listed buildings we do not
propose to take a view on this issue at the present time. Should
that continue to be the preferred option we will take a view in
the light of advice from English Heritage and all other relevant
parties at the appropriate time.
SOUTH BANK
CENTRE DEVELOPMENT
Relationship between DCMS and the South Bank Centre
1. In the relationship between the DCMS and the South
Bank Centre (SBC) is consistent with that we have with the other
national companies. As bodies funded by the Arts Council of England
under the arm's-length principle, the Government plays no role
in determining levels of revenue or capital funding for the SBC.
We expect the Arts Council to scrutinise and support its activities
in a rigorous and effective manner. However, as one of our flagship
national arts organisations, the SBC plays a key role in the delivery
of the Government's objectives for the arts. It also plays a wider
role in the cultural life of London and the nation. Furthermore,
in accordance with the South Bank Centre Trust Deed, appointments
to the Board are made by the Secretary of State for Culture, Media
and Sport. The Government therefore properly takes an interest
in the activities of the SBC and its redevelopment plans.
The Government's views on the South Bank Centre development
2. The redevelopment of the SBC is one of the biggest
capital projects ever tackled in the arts. It is a highly challenging
project, but it is a challenge that cannot be shirked. The Government
believes the South Bank Centre has the potential to be the best
cultural centre in the world, with world-class architecture, providing
a varied programme of arts and film for a local, national and
international audience. It should also be a model for culture-led
urban regeneration, in common with the wider South Bank, from
the London Eye and National Theatre to Shakespeare's Globe and
Tate Modern, providing a cultural hub which will attract tourists
from all over the world, with people using it almost every day
of the year.
3. The range and quality of the arts at the South Bank
Centre stands comparison with the very best anywhere. The diversity
of its audiences is equally impressive. It also has an exceptionally
strong education programme, which covers all ages from pre-school
onwards, and responds to the needs of an enormously diverse local
and regional community. The SBC has in our view probably been
guilty of under-selling its educational achievements in the past.
4. However, despite the strength of the artistic and
educational programme, the artists, audiences and wider public
are poorly served by the buildings, public spaces and infrastructure
which have deteriorated over the last half century. We agree with
the South Bank Centre's diagnosis of the problems facing the site
set out in their Memorandum to the Select Committee.
5. We believe all the key stakeholders share our aspirations
for the SBC, but various attempts to redevelop the site have foundered
and realising its potential remains a major challenge. Rick Mather's
masterplan was rightly commended for its vision, and some welcome
progress has been made over the last two years, but as with its
predecessors, progress has been limited by planning and funding
difficulties and the absence of a consensus on the way forward
among the South Bank Centre's many stakeholders. To overcome these
problems, the SBC needs to exercise leadership and to work in
partnership with the full range of stakeholders.
Leadership
6. The first issue which needs to be gripped is the leadership
of the organisation. The pace of progress on the SBC development
over the last two years has not been as slow as some critics would
have us believe. In particular, improvements to the public spaces
around Jubilee Gardens and the Royal Festival Hall have started
to make the site more hospitable. Nevertheless, progress has been
slower than we would have liked, and this has not been helped
by the unfortunate illness of the former Chairman, Elliott Bernerd,
who resigned last month. In his absence, exacerbated in the last
few months by the absence of a Chief Executive, the two Vice-Chairmen,
Maya Even and Edward Walker-Arnott, have done a sterling job in
leading the organisation, and we are very grateful to them for
doing so. To move forward, however, the SBC now needs to have
both a Chairman and Chief Executive who have the skills and energy
to tackle the challenges of both the development and the day to
day operations of the organisation, and to deliver a high quality
cultural programme in a fitting environment.
7. Following Elliott Bernerd's resignation on 15 January,
and given the ongoing recruitment process for the new Chief Executive,
it was important to identify a new Chairman quickly, not least
to counter any perception of drift. On 18 February we announced
the appointment of Clive Hollick to succeed Elliott Bernerd as
Chairman of the South Bank Board. We believe Clive Hollick has
the skills and qualities that will be required to lead a difficult
and demanding project, by leading the organisation effectively,
securing the success of the development and delivering an outcome
of which the nation can be proud. His extensive record of success
in the public and private sectors is testament to his ability,
and his combination of business expertise, strategic vision and
focus on delivery will be of enormous value to the South Bank
Centre and its stakeholders. His first priority will be to appoint
a new Chief Executive. Identifying the right individual will be
vital to the future success of the SBC and the development.
Funding
8. One of the recurring obstacles to the various development
plans has been a failure to secure the funding necessary to realise
the vision. A more pragmatic approach is needed which involves
a vigorous fund-raising campaign, while phasing the development
so that it is not an all-or-nothing approach. The proposal to
press ahead with the refurbishment of the Royal Festival Hall,
developing the rest of the site thereafter as resources allow,
seems sensible to us.
9. The Arts Council and Heritage Lottery Fund have already
earmarked significant sums of Lottery funding for the SBC development.
We hope that this will be supplemented by Single Regeneration
Budget and Section 106 funding, an appropriate level of commercial
development on the site, and additional funds from private donors.
Rigorous budgeting and financial control will be essential to
the success of the development. We believe the Chairman and board
members should take a hands-on approach to fund-raising. This
is not something that should be left to the executive management
alone.
Planning
10. We are not in a position to comment on the detail
of the various planning applications, nor on the way they have
been handled by the London Borough of Lambeth. We would make two
observations on the planning process, however. First, we have
noted that English Heritage considers the conservation plan for
the Royal Festival Hall to be a model of its kind, and that it
has also accepted the case for the liner building which will form
an intrinsic part of the refurbishment of the Festival Hall.
11. Second, the SBC undertook a commendably extensive
public consultation exercise in 1999. Rick Mather's Masterplan
and subsequent planning applications have taken full account of
the views expressed by local residents. We disagree with the contention
that consent for the liner building will in itself prejudice any
subsequent application on the rest of the site. Such arguments
simply perpetuate the Catch 22 situation, which prevents any phased
development on the site. We hope that whatever the cause of the
delays thus far in deciding on the various planning applications,
LB Lambeth will very soon be able to give the consents necessary
to proceed with the refurbishment of the Royal Festival Hall.
Working in partnership
12. There are an unusually large number of stakeholders
in the South Bank Centre development. We agree with the Arts Council
that there is an important role for the new SBC Chief Executive
in driving forward the development with the collaboration of those
stakeholders. While a consensus on the way forward would be desirable,
it has become increasing clear that progress will only be made
through compromise and we would call upon all parties to pursue
a constructive dialogue where consensus cannot be found. As noted
above, we would in particular welcome any move to unblock the
planning process. Securing a consensus among all these stakeholders
will not be easy, but as we do not regard maintaining the status
quo to be a viable option, DCMS will support the SBC in seeking
to broker consensus where necessary.
Next steps
13. We have asked Clive Hollick to report to us within
three months of the Chief Executive taking up post on his plans
for completing the development and reinforcing the SBC's artistic
programme through a focus on excellence, education and broadening
public access. Thereafter, we will work with the SBC, the Arts
Council and the other key stakeholders to complete the successful
development of the site.
March 2002
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