Select Committee on Culture, Media and Sport Minutes of Evidence


Memorandum submitted by the Society of London Theatre and Theatrical Management Association

  1.  This is a joint submission of evidence from the Society of London Theatre (SoLT) and the Theatrical Management Association (TMA) as a contribution to the Committee's inquiry into the nature and adequacy of public support for theatre in Britain.

BACKGROUND

  2.  SoLT and TMA are trade associations representing the interests of those engaged in the production and presentation of medium- to large-scale dramatic and lyric theatre in the UK. (The interests of small to medium scale theatre are represented by the Independent Theatre Council, which we understand to be making a separate submission).

  3.  SoLT represents members based in London as defined by the London postal districts. TMA represents members throughout the UK. The two organisations are run from a joint office with a largely shared staff.

  4.  Although SoLT is commonly thought of as representing only commercial theatre and TMA as representing only subsidised theatre, the facts are otherwise. Membership of SoLT extends also to all major subsidised organisations in London (including the four great lyric and dramatic national companies, producing theatre companies from Wimbledon Theatre to the Theatre Royal Stratford East and from the Tricycle in Kilburn to Greenwich Theatre and venues such as Sadlers Wells and the Barbican Centre). Membership of TMA includes also commercially run theatre venues throughout the UK as well as a large number of commercial producing companies and all the major producers.

  5.  Enclosed are the most recent annual reports of both organisations, which indicate the extent and range of their work.

THE SUBMISSION

  6.  The remainder of this submission is in three parts. The first addresses some of the factual background to the issues which the Committee has indicated that it wishes to consider. The second concerns the short- to medium-term future funding prospects for the subsidised sector. The third draws attention to recent developments with regard to the capital needs of commercial theatre buildings in London's West End.

FACTS AND FIGURES

 (a)   Attendances

  7.  SoLT collects comprehensive production and attendance statistics for all theatres represented in membership.

  8.  Attendances in London are running at +/- 12 million a year, of which about 10 million are attributable to the commercial sector. Towards the end of 2004 there were a number of alarmist press reports suggesting that attendances were in serious decline. These had no substance in fact. While there are of course always short-term fluctuations in attendance reflecting the success or otherwise of the particular productions on offer at a particular time, the year as a whole ended very strongly, not least given the successful opening of major musicals at three of our biggest theatres. Although final figures for the year will not be available for another two to three weeks, our best estimate is that 2004 will prove to have been the equal of 2003 and one of the best years on record. Enclosed is the latest available published box office data report, for the calendar year 2003.

  9.  Figures for attendances in the rest of the UK are less comprehensive, partly reflecting the devolution of responsibility for funding the arts to Scotland, Wales and Northern Ireland, and partly the fact that no one organisation covers the whole of what is a very diverse pattern of venues and producers. However, in the latest period for which figures are available, attendance reported by TMA members across the UK were broadly stable at some 6.5 million a year. Total attendances across the whole theatre economy will have been very considerably higher.

 (b)   Audience Profile and Response

  10.  Reliable data in these areas depend upon in-depth venue-related surveys which, by their nature, can be conducted only on an occasional basis. The TMA does not undertake such surveys. SoLT does so at intervals of 4-5 years. The most recent SoLT survey was undertaken by MORI in 2003-04. Enclosed is a copy of the subsequently published report, The West End Theatre Audience. Among the key findings of the report are:

    —  37% of the current audience is drawn from London, 36% from the rest of the UK and 28% from overseas;

    —  of the visitors to London, 42% cite theatre as the main reason for their visit and a further 36% as a fairly important factor in their visit;

    —  92% of the total audience rate their visit as either very good or fairly good in terms of enjoyment;

    —  80% rate their visit as either very good or fairly good in terms of value for money;

    —  73% of the audience has an income of less than £40,000 a year;

    —  those surveyed indicated that they were personally spending £116.30 per head on average because of their theatre visit.

 (c)   Economic Impact of Theatre

  11.  Surveys of this kind provide a necessary tool in assessing the economic impact of the theatre sector.

  12.  Following on from the previous West end audience survey in 1997, SoLT commissioned from Tony Travers of the LSE a study of the economic impact of London's West End Theatres. Among the key findings of the resulting report, known as The Wyndham Report, published in 1998, were:

    —  the total economic impact of West End theatre on the UK economy in 1997 was some £1.1 billion;

    —  West End theatre-goers spent £433 million on restaurants, hotels, transport and merchandise;

    —  West End theatre generated tax revenue of over £200 million and contributed a £225 million surplus to the UK's balance of payments;

    —  41,000 jobs depend on West End theatre, 27,000 directly and 14,000 indirectly.

  Regretfully, copies of the report are now available only in photocopy. A copy in that format is enclosed.

  13.  The more up-to-date data yielded by the 2003 MORI survey imply that the current headline figure for the total economic impact of West End theatre should be revised upwards to approaching £1.5 billion.

  14.  In 2003, Arts Council England, SoLT, TMA and ITC came together to commission from Professor Dominic Shellard of the University of Sheffield a new study of the economic impact of theatre across England as a whole. The Arts Council England submission will no doubt give a detailed account of his subsequent report, published in May 2004.

  15.  Professor Shellard's "headline" conclusion is that theatre activity outside London has an overall economic impact of £1.1 billion annually. Taking this together with the figure of £1.5 billion for West End theatre gives a total figure of £2.6 billion for the economic impact of theatre across the UK. Alongside this must be set the total amount of public subsidy for theatre (excluding lyric theatre) from the four UK Arts Councils, which is currently little more than £120 million a year.

  16.  These various studies and surveys demonstrate beyond doubt the huge significance of an industry which, in economic terms, punches far beyond its weight. That significance is felt not only in terms of the national economy, but no less importantly also to the local and regional catchment areas of individual theatres up and down the country. Within London in particular, it would be hard to overestimate the importance of West End theatre to the central London Boroughs of the City of Westminster and Camden.

 (d)   Relationships Between Subsidised and Commercial Theatre

  17.  The heading for this section is taken from the title of a book by Robert Cogo-Fawcett commissioned and published by Arts Council England in July 2003. We assume that the Arts Council will itself supply the Committee with a copy.

  18.  The relationship between subsidised and commercial theatre has strong historical roots and is today perhaps stronger than ever. What one might call the most traditional arrangement is the situation in which a subsidised theatre company mounts a production which subsequently attracts the interest of a commercial producer who then arranges and raises finance for a transfer into a commercial West End theatre or a commercial tour.

  19.  Though such arrangements continue, there is now a much wider variety of "deals" struck between commercial and subsidised producers. To give just three examples, a commercial producer may share the origination costs of a subsidised company's production with the intention from the outset that it should transfer to the West End or go on commercial (or partly subsidised) tour to other venues outside London; a commercial management may choose to `sponsor' a subsidised production in return for an option on its transfer to the West End should it prove to have commercial potential; or a commercial producer may share the costs of commissioning a new play in the interest of developing a relationship with the writer for the future.

  20.  All such arrangements have advantages for both parties. For the subsidised company, they may allow for higher production values and stronger casting; they may offer the opportunity for far longer and greater exposure for a successful production that would otherwise have to close in accordance with predetermined seasonal requirements; they can greatly enhance the national profile of a regional company; and of course they can provide a continuing income stream from the proceeds of commercial "exploitation". For the commercial producer and his or her investors, one of the most important benefits is that they offer an opportunity to assess a production's commercial potential before committing to it the very considerable additional costs involved in a West End transfer.

  21.  In 2003, 21 productions originating in the subsidised sector were seen in London's West End. At the time of writing, six productions originated by subsidised companies are enjoying commercial presentation in West End theatres. These include one of the West End's longest running shows, Les Miserables, which was originated by the Royal Shakespeare Company and is now presented commercially not only in London but across the world. In addition, the Royal Shakespeare Company is itself presenting at The Albery theatre a season of Shakespearean tragedies and at the Playhouse Theatre a season under the title The Spanish Golden Age, both of which originated at Stratford.

  22.  In this context, the Committee may be interested to note too the activities of Stage One (the operating title of the charity registered as the Theatre Investment Fund Ltd), which has among its objects the support and training of commercial theatre producers. With funding from Arts Council England and major support from both SoLT and TMA, Stage One runs seminars and workshops on commercial theatre production and also offers bursaries to trainee producers. All these are available to individuals from both the subsidised and the commercial sectors. In 2004, 90 people attended seminars, 20 attended workshops and 17 bursaries were awarded.

 (e)   The West End Out of London

  23.  Apart from co-productions with subsidised theatre, the West End has a much more direct relationship with theatre provision across the UK. Several commercially produced West End shows are commercially toured before they come into the West End. A considerably greater number are toured after a successful West End showing. To date, no-one has collected statistical data on this.

  24.  For the purpose of this submission, SoLT has undertaken a quick survey of its commercial producing Members. The results indicate that, for the year ending August 2004, West End-related touring amounted to 562 weeks in total and played to an estimated 2,640,000 people. These are minimum figures. The actual total will be somewhat higher.

  25.  The number of touring weeks provided would be sufficient to fill eleven regional theatres 52 weeks a year. Given that they are widely dispersed around the country, it is reasonable to estimate that they sustain some 50 regional theatres, for which such productions make the difference between viability and non-viability over a 12 month period. The out-of-London audience reached, added to the out-of-London audience attracted into the West End amounts to some seven million a year.

  26.  The Wyndham Report took no account of the economic impact of such touring in the UK regions.

FUTURE FUNDING PROSPECTS FOR SUBSIDISED THEATRE

  27.  The information given above combines to indicate a theatre industry with very considerable economic and cultural importance, reaching out to the furthest parts of the United Kingdom. All this is sustained on a modest base of public subsidy. By the standards of western continental Europe, it is indeed a uniquely low level of subsidy.

  28.  Through much of the 1990s, subsidised theatre was subjected to a severe process of attrition. The demands made on it grew to embrace the provision of educational and other outreach/community work. Audience expectations of production standards rose inexorably. Marketing costs increased in the face of growing competition for people's leisure time. Subsidy levels failed to keep pace. The consequences were all too evident—depressed salary levels for artists and most people employed in the theatre and theatrical companies; fewer and smaller productions with less and less rehearsal time; an increasing concentration on two- and three-handed plays; less risk-taking, particularly in the commissioning and presentation of new work; and growing financial deficits as managements tried to maintain artistic standards with inadequate resources.

  29.  In 2000 the then Arts Council of England commissioned and published what became known as the Boyden report, which adduced firm evidence of the problems being faced and argued forcefully for the injection of a significant increase in the real levels of funding for theatre. Partly in consequence, the then Arts Council Chairman, Gerry Robinson, and Secretary of State for Culture, Media and Sport, Rt Hon Chris Smith, succeeded in persuading Downing Street and the Treasury that something had to be done to reverse these trends. The 2002 spending review led to an uplift in funding for theatre of £25 million over two years. There were real terms increases too for lyric companies. All this came as a huge and necessary relief to the performing arts sector. Although both the Arts Council and the DCMS acknowledged that more would need to be done in succeeding years, it seemed that years of decline were at last beginning to be reversed.

  30.  The additional monies have been well used. The range and quality of work offered has significantly improved. It has again been possible for major repertory theatre companies to produce work across the whole of the repertoire, including plays requiring larger casts. New work has begun to move beyond the confines of the studio theatres and onto the main stages of the main regional companies. There has been a palpable improvement in the quality of both aspiration and achievement. Managements have been able to make progress in addressing the chronic problem of low pay within the industry, as illustrated in the TMA's most recently negotiated agreement with Equity. Not least important, the sector as a whole has begun to recover its confidence and morale.

  31.  Against this very positive background, the industry as a whole was dismayed by the DCMS's announcement before Christmas of a freeze in future funding for Arts Council England over the period to 2008. This view is shared equally by SoLT and TMA, by the Independent Theatre Council and by the three entertainment trade unions (being Equity, the Musicians Union and BECTU). For the first time in their history, all six organisations came together to sign a joint letter to The Times expressing their concern.

  32.  We are aware of differences of interpretation between DCMS and the Arts Council as to the precise implications of the freeze. These are to say the least unhelpful. Some outsiders have sought to apportion blame for such a negative outcome of the public spending review more heavily in one direction rather than another. We do not wish to engage in such argument.

  33.  Our concerns are straightforwardly practical. Whatever recriminations may be bandied about, whatever the fine print may reveal in due course, it must be abundantly clear that, should the eventual outcome be a freeze in funding for theatre (both dramatic and lyric) over the next few years, it is bound to throw recent progress into reverse. Within the space of a very few years, subsidised theatre will have moved from Stop to Go and back to Stop. No-one can plan sensibly on such a basis—not the Arts Council, not the performing arts sector as a whole, and certainly not individual arts organisations.

  34.  Had the freeze been announced in a period of general economic retrenchment, with cuts in government spending across the board, its implications would have been no less serious, but at least one would have been able to understand the reasons for it. As it is, it comes at a time when the economy is healthy and overall public expenditure is rising. One is bound then to ask what is the justification for requiring Arts Council England to make economies which are of negligible significance within the wider framework of public expenditure. The "savings" it will have to find represent no more than the smallest loose change in the pocket of the Exchequer. They will inflict major damage on the Theatre sector, and may put at risk its undoubted and disproportionately beneficial impact on the wider economy.

  35.  Before moving on, we should make clear that these observations are addressed only to the situation in England, in accordance with what we understand to be the Committee's remit. The Committee will no doubt be aware that subsidised performing arts organisations in Scotland, Wales and Northern Ireland derived no benefit from Arts Council England's Theatre Review monies nor have they enjoyed any equivalent increase in their own national funding levels. The current position in the devolved nations is necessarily a matter of continuing concern to trade associations which have a UK-wide remit.

THE CAPITAL NEEDS OF COMMERCIAL THEATRE BUILDINGS IN LONDON

  36.  The Committee indicates a wish to consider "progress with significant (re)development projects as may be brought to its attention". In this context we draw attention specifically to the enclosed report on modernising London's West End theatres published by The Theatres Trust in October 2003 under the title Act Now!

  37.  The report was the outcome of a two-year survey of the current fabric of West End theatres. It concludes that a major programme of renovation and adaptation is necessary to ensure that theatre-going remains attractive to the next generation and beyond; and it estimates that a total of £250 million (at 2003 prices) will need to be spent over a period of some 15 years.

  38.  The report also summarises the conclusions of an independent study commissioned by The Theatres Trust into the economics of theatre ownership. The study demonstrates that, despite its wider economic impact, commercial theatre operates on very tight margins of profitability. Moreover, the extent to which the industry can develop its capital assets is seriously constrained by planning/user restrictions and by the fact that all but a handful of West End theatres are protected by listed building status.

  39.  As Act Now! concludes, there is no prospect of the industry's being able to find from its normal operating profits the full £250 million which The Theatres Trust identifies as necessary. While the industry will of course do all it can, there is, as the report says: "no alternative but to look to Government or other outside agencies for some kind of matching assistance."

  40.  Sir Cameron Mackintosh's recent refurbishment of the Prince of Wales theatre demonstrates what can be achieved. At the same time it illustrates the severity of the economic constraints faced by theatre owners. Sir Cameron spent some £8 million of his own money on the refurbishment, not as an investment decision but as an act of personal philanthropy. Despite this expenditure, the market value of the building is thought now to be little if any more than it was before the improvements.

  41.  In May 2004, the Secretary of State and Minister of State convened a seminar with members of the Society and other potentially interested parties with a view to finding a way forward on the issues identified in the Act Now! Report. SoLT and The Theatres Trust are now represented on a DCMS Working Group to pursue the matter in detail.

  42.  For its own part, SoLT has been working on the assumption that the theatre industry will need to find a way of contributing half the estimated total capital programme (ie £125 million over 15 years or so); and we are confident that we will be able to do this. We are working on the assumption that the balance of the £125 million may be forthcoming over the same time period from a consortium of cultural, heritage and economic interests.

  43.  If a package can indeed be put together, SoLT would envisage establishing a new independent charity for the receipt and disbursement of funds. We also envisage that all grants made should be made subject to the charity's taking a lien on the theatre buildings concerned to be exercised in the event that they should ever cease to be used for theatrical purposes.

  44.  We very much hope that the Working Group will be able to identify an agreed solution, at least in outline, within the next few months.

CONCLUSION

  45.  The subsidised and commercial sectors of theatre enjoy an increasingly close inter-relationship marked by a wide range of collaborations. When each is in rude health, the other benefits both directly and indirectly. But when one sector sneezes, the other tends to catch a cold.

  46.  The commercial sector has a strong interest in a subsidised sector that is robust, confident and adequately funded for the production and presentation of top quality theatre. Equally, the subsidised sector has a strong interest in a commercial sector that can provide an extended life for its best work in a theatrical setting that fully reflects the increasingly sophisticated expectations of contemporary audiences. That both should flourish is not only culturally desirable but also essential to the nation's economy.

  47.  We hope that the above submission may both serve to underline the timeliness and significance of the Committee's present inquiry and represent a helpful contribution to its conclusions in due course.

January 2005


 
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