APPENDIX 66
Supplementary memorandum submitted by
the Arts Council
ARTS DEVELOPMENT INQUIRY
LOTTERY PROJECTS'
EXPENDITURE
You asked for information about those organisations
receiving lottery funding which have gone over budget. We have
taken this to mean those organisations who have been awarded additional
funding from the arts lottery fund in order to enable the completion
of the project. Of the 1848 projects in our first Capital Programme,
56 have been awarded supplementary funding from the lottery. In
financial terms, this means £99,407,869 of additional lottery
funding for a programme whose overall budget stands at almost
£1.2 billion.
SAVINGS IN
THE RESTRUCTURE
OF ARTS
FUNDING SYSTEM
In March 2001 the Arts Council of England took
the decision to move to a single organisation to support the arts
by merging with the 10 Regional Arts Boards. At that time, on
the basis of an analysis of the savings likely to result from
amalgamation and rationalisation of 11 separate organisations
into one single body, we calculated that a reasonable target of
£8-10 million could be set. In estimating this figure, we
took into account the current administration costs of the arts
funding system of £36 million. We took the view that savings
in the region of 25 percent on this figure was achievable. I must
emphasis that this was a target set by the Arts Council of England
and not the DCMS. It remains a serious target which the Arts Council
of England will test as we develop and implement the restructure.
There is no detailed structure for the new organisation
available ahead of amalgamation, which is due to take place on
31 March 2002. There are extremely good reasons why it was not
possible to do this:
— Clear legal advice (laid out in Annex
18 of the Transfer Proposal) states that the design of the new
organisations structure should be undertaken separately in time
from the TUPE transfer. The advice was that the design process
should precede or follow transfer. Were they to be pursued simultaneously,
any causal links between transfer and changes to employees terms
and conditions of employment could entitle members of staff to
resign and claim constructive dismissal;
— However, ahead of transfer, it was
not sensible to expect 11 different organisations, some of which
had previously expressed strong objections to the reorganisation
in principle to devise a set of detailed proposals that represent
the best possible solution for the future, nor to do so in a reasonable
time-frame;
— On that basis, it was the logical
choice to aim for transfer as a first step, and to complete the
restructuring as rapidly as possible thereafter, with the considerable
benefit of shared aims and objectives, involving all interests
fully in the task and with unified consultation structures. There
is of course an onus on the new organisation to reach conclusions
rapidly to give staff a clear indication of their individual prospects.
This is laid out in Annex 20 of the Transfer
Proposal which gives further background to the savings target.
The Transfer Proposal, which I believe reflects extensive business
planning, also provides clear and explicit assurances of the basis
on which the restructuring will be undertaken. The detailed design
of the new organisation will being from 1 April. We remain confident
that we will reach the £8-10 million target. We will keep
the Committee informed of how we are progressing towards this
target.
ROYAL SHAKESPEARE
THEATRE AND
SOUTH BANK
CENTRE REDEVELOPMENTS
Please find a further attachment which I hope
goes some way to answering the questions raised in your final
paragraph.
12 March 2002
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