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6 Jun 2007 : Column 100WH—continued
In November 2006, the Secretary of State admitted that costs had already risen by nearly £1 billion— £900 million. Despite the fears that were voiced by the Select Committee on Culture, Media and Sport, the National Audit Office and many arts and heritage organisations about the likely impact on lottery good causes, she announced a further diversion of £675 million from lottery good causes. That brings the total lottery contribution to the cost of the Olympics to £2.2 billion, which equates to a loss of 20 per cent. of the money that would have been available for good causes between 2005 and 2012-13. Of the additional diversion, £425 million will come from the Big Lottery Fund and £250 million will come from other good causes. However, the impact on lottery good causes is likely to be even greater as ticket sales are likely to be diverted from the general lottery to the Olympic lottery, thus further reducing the money that is available for good causes.
What will be the specific impact of all that on arts funding? There will be funding cuts of £112.5 million for the Arts Council of England, £21.8 million for the UK Film Council, £4.5 million for the Arts Council of Northern Ireland, £12.5 million for the Scottish Arts Council, £1.8 million for Scottish Screen and £8.1 million for the Arts Council of Wales. In total, there will be cuts of £161.2 million in the arts sector.
As a result of the cuts, the Arts Council in England is already cutting its grants for the arts fund, which finances thousands of small projects, by 30 per cent. from £83 million to £54 million. It has also set stricter caps on the amount of money that is awarded to projects. The grants for the arts fund is the only source of funding for many small arts projects that are not designated as regularly funded organisations. Many companies will be threatened by those cuts, and many projects simply will not go ahead. The grants for the arts scheme is used to invest in one-off, time-limited productions such as theatre tours. The loss of such productions will threaten the viability of many regional theatres, which rely on such programmes to attract custom and fill their seats. It may therefore threaten their ability to survive economically, as well as deny regional audiences access to top-quality productions.
Cutting funding for those sorts of smaller-scale projects will have a knock-on impact on the whole sector. The grants for the arts scheme is the breeding ground for the artists of the future. The main threat is to small-scale and new projects, including the 53,000 voluntary arts groups in England whose only source of Arts Council funding is the grants for the arts scheme.
The impact of the cuts will be even greater in other UK nations, because whereas 60 per cent. of the Arts Council of England budget goes to the voluntary and community sector, the proportion is higher in Wales, Scotland and Northern Ireland. The effect in those nations may be to cause stagnation and lack of innovation, because new companies and projects will no longer be able to get off the ground. Local community-based participatory groups will be heavily hit, which will affect the Government’s participation targets and will undermine the development of future talent.
It is the vibrancy of the arts in the UK that makes it so attractive to overseas visitors. That vibrancy was an essential strength that helped London’s bid to be the
host city of the Olympics to win, but it depends on small community arts activities and projects, which can only be undermined by the short-sighted cuts.
The Heritage Lottery Fund will also take a cut of £161.2 million, because there was a 50:50 split with the Arts Council. The fund is the only heritage body that operates throughout the UK. It funds heritage projects of all sorts, including museums, libraries, archives, natural heritage sites, historic buildings, townscapes and parks—the list goes on. It is the main source of public funding for heritage in the UK, and the heritage sector relies increasingly on its funding because other sources have reduced in recent years. Gift aid, for example, will generate less income in coming years as the standard rate of income tax is reduced by 2 per cent.
English Heritage is suffering a real-terms reduction in grant in aid of £20.6 million between 2000 and 2008. The Heritage Lottery Fund has had to fill the gaps that have been left by the cuts, but it will no longer be able to do so when the diversion of funds to the Olympics takes effect. The fund gives 55 per cent. of its grants to the third, or voluntary, sector. It has given grants to Strutt’s North Mill at Belper, in Derbyshire, which I visited a few weeks ago. The mill is an historic landmark from the industrial revolution of the 18th century, and would not have been saved and be open to the public without the work of a small, voluntary group that survived entirely on heritage lottery funding when it was getting off the ground. There are similar stories all over the country. Large-scale cuts will inevitably hit the voluntary and community sector despite the Secretary of State’s assurances that they will make no difference. If making cuts of at least £1.1 billion will make no difference, then money must surely be being misspent at the moment, but I see no evidence of that.
In the heritage sector alone, some 400,000 people volunteer every year, creating a social network that contributes to all communities and to community activities and identity. The diversion of £90 million of funding from the Heritage Lottery Fund is equivalent to wiping out four years’ worth of spending on smaller community and voluntary sector grants, as well as the entire stream that is aimed at younger people—6,000 projects in all. Or it is equivalent to wiping out the planned spend on churches and historic town centres from Gateshead to Great Yarmouth—1,400 schemes—for four years. Or it is equivalent to wiping out five years’ worth of funding for renovating our historic parks, such as Queen’s park in Chesterfield, which has benefited enormously from that funding in recent years. It would be a shame if many historic parks around the country were denied access to that funding.
Despite the Heritage Lottery Fund’s assurance that it will continue to support in full the range of projects as they are currently funded, it seems that in the circumstances of such cuts it will be impossible to fund large projects such as the Big Pit in Blaenafon, Kelvingrove museum in Glasgow and the transformation of the British Museum. The cuts will inevitably worsen the already poor ability of British museums to acquire new material. Some 96 per cent. of our museums already say that poor core funding is a barrier to collecting, and 60 per cent. of museums were unable to allocate any income at all to collecting in 2005.
What is the value of the arts and heritage? They are a central part of community life, not an optional extra.
They define and bind communities and they provide an understanding of the world and of what makes us human. The arts make a crucial contribution to innovation, education, diversity and social inclusion. A healthy society is one in which everyone can share in the arts, and it is the responsibility of the Government—indeed, it is an oft-proclaimed Government target—to ensure that that happens and that participation covers all levels of society and people from all backgrounds. Sustained investment in the arts means that they can now effectively contribute to wider agendas such as health, education, social inclusion and community cohesion.
The creative industries are acknowledged to be a key part of British competitive economic performance, accounting for 7 per cent. of the economy and growing at 5 per cent. per annum—twice as fast as the rest of the economy. Heritage is critical to the tourist industry, consistently featuring among the top reasons why people from overseas choose to visit this country. In one survey, 72 per cent. of visitors from Russia, China and the United States cited British historic sights—castles and houses—as the leading reason that brought them to this country.
For every £1 spent on entrance fees to heritage attractions, £25 is spent in the vicinity on retailing, catering, transport and accommodation. Heritage attractions are important employers and they generate significant income for many communities, especially those in rural areas. Britain’s privately owned historic houses, castles, parks and gardens alone contributed £1.6 billion to £2 billion and 10,000 jobs to the rural economy in 2005 and attracted 15 million visitors. In my county of Derbyshire, tourism is the largest single employer—not agriculture in the Peak district, and not the defunct mining and engineering industries in east Derbyshire where Chesterfield lies, but tourism throughout the whole county.
Heritage is also important in developing strong local communities and identity, and we have recently heard much talk from the Government about fostering ideas of Britishness, community and identity. Heritage is not elitist; it is extremely popular. Some 70 per cent. of adults visited an historic location last year alone, and more than 1 million people supported the “History Matters—Pass It On” campaign.
In the build-up to the Olympics, arts and heritage are vital to achieving the objectives that the Government say they have set themselves. The cuts will affect the ability of arts and heritage to deliver and to act as a showcase for Britain during that period. If our arts and heritage are not at their best, the potential benefits from additional tourism before and after the games will be lost. The Government estimate that the tourism legacy will be £1.4 billion to £2 billion for a decade after 2012, but that will not be achieved if arts and heritage cannot showcase and market themselves to the rest of the world using the Olympics as their vehicle.
The four-year cultural Olympiad in the run-up to the games should be that showcase. It should showcase both London as one of, if not the, greatest cultural capitals in the world, and the rest of the UK’s world-class arts and heritage. The cultural Olympiad is a key to the whole project and it was central to the UK’s winning bid, but instead of funding the
Olympiad at this critical time, funding is being drastically cut throughout the country, reducing the ability of the arts and heritage sector to deliver the cultural Olympiad successfully.
Most of the money available for cultural events connected with the Olympics has already been assigned to the opening and closing ceremonies, the torch relay and the medal ceremonies. It appears that the rest of the cultural Olympiad is to be paid for by participating organisations out of existing budgets, but existing budgets are being cut. The international exhibitions programme, which is designed to be a collaboration between many major and smaller museums and galleries throughout the UK, has not been assigned any money from the Olympics budget.
There is no clear plan for the cultural Olympiad, and regional co-ordinators are only now being appointed. However, there is little point in recruiting people who will not have any budget and whose role could have been covered by the existing infrastructure. Other cultural Olympiads have received significant financial support from their Governments. Australia’s Government put 70 million Australian dollars into the cultural Olympiad that preceded the Sydney games, but in England, some parts of the cultural Olympiad, including the Shakespeare festival, the world festival of youth culture, and an international music programme, which were part of the original bid and therefore must be delivered, are to be delivered despite not having any budget allocated to them.
We need a clear plan to be made public as soon as possible so that arts and heritage organisations can plan the participation that they can manage to deliver under such conditions. Among all the arts and heritage organisations that I meet, I find a growing cynicism about the cultural Olympiad and the Olympics that threatens to undermine the delivery of a successful nationwide festival of culture, as the small-scale and voluntary groups that are key to its delivery lose enthusiasm in the face of the loss of funding.
More money, not less, is needed in the heritage sector. It has not had the benefit of the increased grant in aid that DCMS arm’s length agencies in other sectors have had. From the 2000-01 baseline, English Heritage has received an increase of just 3 per cent., compared with 53.4 per cent. for the Arts Council and 98.6 per cent. for Sport England. Clearly, DCMS has already prioritised sports over arts and heritage, and it plans to take even more money from arts and heritage to put towards sport. That has left the heritage sector with a legacy of funding needs that grow yearly.
The Heritage Lottery Fund has observed and documented that £3 billion is needed to finish regenerating our historic parks, £10 million to provide digital access to archives and £700 million for repairs to canals and waterways. The canal in Chesterfield is a case in point: 30 years ago when I moved to Chesterfield, the canal was a stagnant ditch; today, as a result of the work of a terrific band of volunteers, it has become a viable canal, helping to regenerate at the centre of Chesterfield an old industrial site in which new shops and offices will be built around a brand new canal marina—something that was unthinkable 20 or 30 years ago. The combination of voluntary work by the Chesterfield Canal Trust and judicious funding
from lottery and local government sources has made it possible. Are all those projects to go by the board in the next few years?
Additionally, £185 million a year is needed for repairs to England’s listed places of worship, and cathedrals alone need £95 million over the next five years just for maintenance. The repairs needed to buildings on the buildings at risk register would cost £400 million, and there is the danger of a long-term loss of conservation and maintenance expertise as the funding goes and heritage posts dry up. In addition, the heritage sector needs more money to carry out the recommendations of the Government’s heritage protection review. It has been widely welcomed, as long as the money exists to make it happen, but money—mainstream and lottery funding—is under threat and drying up.
Even such a tiny scheme in funding terms as the portable antiquities scheme, which costs just £1.6 million a year, could be at risk as a result of comprehensive spending review cuts, as and when we hear of them in the autumn. If those cuts happen, the scheme will not be able to turn to a diminished lottery budget to make up the gap. For such a small cost, the scheme plays a fantastic and invaluable role in preserving, recording and mapping local archaeological heritage throughout the UK, as witnessed at Chesterfield museum when I met the finds officers for my region a few weeks ago. However, even that small amount of funding could be under threat.
There is a good case for saying that the arts world needs more funding, not less. The arts have fared better than heritage in terms of grant in aid over the past 10 years, but we do not want to return to the boom and bust cycle. The cuts of the 1980s and 1990s led to a drop in the quality and quantity of output; attendances fell and theatres closed. In the past 10 years, the funding that existed before the cuts in the 1980s and 90s has effectively been restored. Is that to be threatened by the forthcoming CSR and by lottery cuts? That would be a grave mistake, given the success of the Government’s policy in that area over the past 10 years.
The comprehensive spending review covering 2005-08 froze the Arts Council grant, resulting in a real-terms cut of £34 million, which the council absorbed through restructuring and cuts. However, it seems unlikely to be able to do so again in a further round of cuts over the next three years. Without at least an inflationary settlement in the CSR, there is a real danger that theatre grants will be cut, and the impact will be serious. Why undo the good work of recent years? The subsided arts sector is a training house for the performers and technical staff who go on to work in commercial arts companies. Public funding drives up the standards of theatre and the arts by enabling risk taking and investment in new material. “Jerry Springer: The Opera” and “The History Boys” both started in subsidised theatre before moving on to the commercial world. That is what makes the UK’s arts so attractive that 1.5 million people attended orchestral performances in 2005 and 12.4 million people viewed west end shows in 2006 alone. Many tourists come to London and the rest of the UK for the arts and heritage. On its own, theatre makes a major contribution to the UK economy of £2.6 billion a year.
In conclusion, I should like to put a number of questions to the Minister. It is time that the Government finally acknowledged the positive role of the arts and heritage in the success of our Olympic bid and for the nation as a whole. The arts and heritage sector strongly supports the Olympics and welcomes the opportunity that it will bring to showcase the UK. However, the sector cannot afford the twin cuts, through the CSR—if that is what emerges—and through the diversion of lottery funding. As Nicholas Hynter, the director of the National Theatre, has said:
“There is a spectacular lack of logic in using money earmarked for the arts to plug the holes in Olympics bills. The money raided from the lottery will largely affect small, innovative, experimental organisations and individuals who are the lifeblood of creativity in the UK. Pulling the carpet out from under them and nobbling their money is undermining the future of our major arts institutions.”
“the icing on the cake”,
as one DCMS spokesperson recently suggested. It is an essential element of arts and heritage funding, providing the financial base for the grants by Arts Council England and the Heritage Lottery Fund to a vast and diverse range of small organisations and community projects, which should form the backbone of the cultural Olympiad.
I have seven points to which I look forward to hearing the Minister’s response. First, the Government must now guarantee that this is the last time the lottery will be raided to pay for the Olympics. No one other than Ministers doubts that the original inadequate bid, which has already been increased by nearly £1 billion, will increase again over the next few years. However, that must not be met at the expense of further lottery funding being slashed, so, secondly, any additional cost increases or shortfalls in Olympic lottery sales should be paid for by other means. The arts and heritage cannot sustain further cuts.
Thirdly, the Government should allocate money for the cultural Olympiad from the Olympics budget, perhaps from the contingency fund. That would enable arts and heritage organisations to take part in the festival and to do more than simply rebrand existing, underfunded activities. The arts and heritage sector would receive a direct benefit from the Olympics that would overcome the perception that it was being punished by having money taken away for sport, with no compensation.
Fourthly, arts and heritage should get a higher funding settlement in the comprehensive spending review, to compensate for the loss of lottery money. In particular, funding for English Heritage should be raised to a level at which it can deliver its core objectives as well as the new heritage protection reforms, which the Government have suggested passing over to it. Fifthly, the Government should give a tighter guarantee that the lottery—especially lottery funding of the arts and heritage—will have first call on the profits from the sale of Olympic properties after 2012.
Sixthly, the original principle of additionality in lottery spending should be strictly reinstated, to prevent further raids on good causes to fund what should be mainstream Government spending. Finally, Parliament as a whole, not a small Committee, should debate the resolution on the lottery funds diversion.
I look forward—probably in vain—to the Minister’s reassurance that the Government have realised the folly of their Olympic smash-and-grab raid on lottery funds.
2.53 pm
Derek Wyatt (Sittingbourne and Sheppey) (Lab): I congratulate the hon. Member for Chesterfield (Paul Holmes) on securing this important debate, which is part of a wider debate that has resonated throughout the country. The Government’s decision was a difficult one to make. If I have been critical of it, I am sure that that did not come as a surprise to the Minister, although to be honest I think that it was just bad politics. It is bad politics, approaching an election in 2009 or 2010, for each constituency to be stripped of £1 million. The decision just does not make sense and it is an own goal.
There is some hubris, however. I want to clear my throat and make one or two quick comments. Dick Pound, who was on the International Olympic Committee for more than 20 years, said that the bids that came in contained the most creative pieces of accountancy that he had ever seen. The principle of bids is to win them, not to come second or third. We won the bid, and we should be proud of that. We probably did take rather too long to get the bid into a proper position once we won it, and we are all aware of the time that that took. However, previous Olympic games—in Athens, Sydney, Atlanta or Montreal, for example—all did the same. They all underbid and they all spent too much. But were the games a magnificent success in those countries? They were. Some of us poured scorn on Greece; it has a population of 4 million people, but for them to put on the biggest sports occasion in the world and pull it off has given them the most amazing confidence in their society.
I wrote to both the Leader of the Opposition and the leader of the Liberal Democrats to suggest that we needed a Select Committee on the Olympics, of both the House of Lords and the House of Commons. Interestingly, the Leader of the Opposition turned that proposal down, but I am pleased to say that the leader of the Liberal Democrats thought that it was a good idea. With the changes that are approaching on our side, perhaps the idea will not be lost.
I could not agree with some of the conclusions that the hon. Member for Chesterfield came to. What are the alternatives, if the expenses for the Olympics have been increased? There are seven: either we pay higher general tax or London ratepayers pay a higher London tax, or we use a combination of the two, or there are also some other alternatives, which I shall come to. Higher general taxes are not good politics, either, but if that is what the Liberal Democrats propose, I look forward to their spokesman, the hon. Member for Bath (Mr. Foster), saying so at the end of this debate. In going into a mayoral election in London, if the Liberal Democrats are saying that they want to increase taxation on London, I am sure that they will be elected on that platform. However, in reality that is nonsense, and we cannot have a combination of the two alternatives, either.
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