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That will stay with me.

I am proud of the Government’s record of recognising and supporting the arts and of the great achievements that the arts sector has delivered with that investment. In October last year, we announced that grant in aid funding for Arts Council England would rise to £467 million by 2010-11, an increase of 3.3 per cent. above inflation. In our tight fiscal environment, that is good. It will represent an extra £50 million above inflation by 2010-11. On 1 February this year, the Arts Council announced its spending plans for the coming three years. Some 753—that is, three out of four—of its regularly funded organisations will receive increases in their funding in line with, or above, inflation and 81 new organisations will be invited to join the regularly funded portfolio.

Let me spell out to the hon. Gentleman what that means for theatre. In 2007-08, annual investment will be £101 million. Proposed investment between 2008-09 until the end of the spending review period is £318 million, a cash-terms increase of 8 per cent. There are 223 organisations and 21 new organisations in the portfolio. Producing theatres remain central to the theatre infrastructure of this country and many organisations are receiving above-inflation uplifts, including the New Wolsey in Ipswich, the Oldham Coliseum, the Arcola in London, the New Vic in Stoke-on-Trent, the Northern Stage in Newcastle and the Hull Truck Theatre Company. Funding for organisations in the theatre sector in Yorkshire will rise from £7.2 million to £7.5 million, an increase of 4 per cent. in cash terms. Overall, Arts Council England will invest nearly £81 million in Yorkshire between 2008 and 2011.

In that context of good news, there has been bad news for some organisations. There will be 43 non-renewals and reductions, including the Harrogate theatre. However, I say to the hon. Gentleman in all sincerity that politicians have to stay away from making decisions on what and what not to fund. Since the Arts Council was founded in 1946, it has been a fundamental principle that funding decisions for individual arts organisations should be made by the council, at arm’s length from the Government. When the Leader of the Opposition had a meeting with the Arts Council, he said that he hoped it was not going to fund too many one-legged, Lithuanian lesbian organisations. I hope that he understands why it is so
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important that we maintain our distance; we do not want those sorts of values to inform funding decisions made by the Arts Council.

The arts change and grow, and it is right that the council’s funding plans should reflect that and make room for new talent to develop and succeed. We would not want it to fund the same organisations at the same level year after year. That is why I support the approach that has been taken, although it has led to some difficult situations.

I turn directly to the issues raised by the hon. Gentleman. I urge him to seek a meeting with his regional arts council and with Harrogate theatre to understand better the funding decision. The reason why some of the underpinning rationale for the decision has not been made public is that it is seen as a confidential relationship between the organisation and the Arts Council. It would benefit him, and the theatre, if he had that open, face-to-face discussion with the Arts Council.

I hope that the hon. Gentleman accepts the principle that the Arts Council should not fund things in the present and the future just because it has funded an organisation in the past. However, I understand that this year’s process has been painful, and I know that the Arts Council will itself want to review it to see how it can do things better next time. Again, that is something for it, not for us to do, because that would be an unacceptable intervention.

Taking the actual position on Harrogate theatre, in 2006-07 the Arts Council grant was nearly £400,000—27 per cent. of total income. In 2008-09, as the hon. Gentleman said, it will reduce to £150,000, which means that about 10 per cent. of its income will be met from Arts Council grant. As I understand it, the theatre therefore faces a cut in grant but not closure. In 2006-07, it earned £700,000 from box office receipts and from activities such as incoming tours and co-productions. It also gets a grant of just under £200,000 from the local authority. It is interesting enough to look at those figures, but there is another aspect. The figures given to me say that £40,000 came from donations and sponsorship and £40,000 from fundraising events.

One of the bits of work that I am trying to do, right across the cultural and arts field, is to try to move these organisations from a total dependence on public subsidy to what I would term a much more social enterprise culture, so that they see themselves with a range of funding streams, not as completely dependent on public funding. That is hugely important, not only because it means that they are not dependent on the vagaries of public funding expenditure rounds but because it gives them an independence that allows them to be much more innovative and adventurous than if they are always looking over their shoulder at the public sector.

The hon. Gentleman’s region happens to be rather well supplied with producing houses, including West Yorkshire playhouse in Leeds, York Theatre Royal, Hull Truck Theatre Company, Stephen Joseph theatre in Scarborough and the Crucible theatre in Sheffield. A view will probably have to be taken on that regional infrastructure. There is also a range of Arts Council-funded receiving houses in Yorkshire. Lawrence Batley theatre in Huddersfield and Theatre Royal Wakefield
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are comparable in scale to Harrogate theatre. Lawrence Batley theatre will receive £120,000 from the Arts Council—not that different from Harrogate theatre—and Theatre Royal Wakefield will receive £96,000. As a receiving theatre, Harrogate does not do that badly.

Many of the organisations that face challenges over their funding this year were surprised. I think that that is because the Arts Council has never undertaken this exercise in the past, and nobody really believed that they would undertake that radical reform to ensure that we fund those organisations that will contribute to future developments. I am told that the theatre was first informed on 12 December 2007. That was a little late, partly because we as a Department took the view that we would not take an early settlement under the comprehensive spending review but hold out for a much better settlement from the Chancellor. That worked in our favour so that we were able to inflation-proof and grow a little bit the totality of the funding to the Arts Council.

The Arts Council told the theatre that it believed that over several years performance had been consistently weaker than other parts of the regional building- based producing theatre network. It says that that was set out in the letter of 2005, and it did not change its view. It recognised that the managerial and financial improvements delivered in the past year addressed some of the issues that it had raised previously, but the inherent weaknesses of the organisation in relation to the quality of the programme and the long-term challenge of the theatre’s physical limitations informed the decision that it took. The council thought that the current programme and operation, with large amounts of amateur productions, a long-running Christmas show, and the toured-in work to which the hon. Gentleman referred, is more indicative of a middle-scale receiving theatre than a producing one. It felt that that made its current investment disproportionate.

In the light of those remarks, the Arts Council wanted to enter into discussions with the theatre and other funding partners to explore options for presenting performing arts work in the town. It remained unconvinced
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that the theatre has the capacity to build and sustain high audience levels for a year-round programme of quality produced work and thus it believed that the scale of its previous investment did not represent value for money.

As the hon. Gentleman will know, representations were made by the Harrogate theatre to the Yorkshire regional arts council, which then met to consider those representations at the end of January. At that meeting, the regional arts council could not accept the argument from Harrogate theatre for an alternative level of reduction, as the hon. Gentleman proposed. However, it acknowledged that Harrogate theatre was distinctive from other similar scale receiving theatres in its significance to a large rural area. That argument, advanced by the theatre and the local authority funding partners when they talked about the importance of maintaining significant rural outreach, youth and educational work, informed the regional arts council’s decision to raise the level of support that it was willing to give. That is how we ended up with the £150,000 figure.

I know that my response will not please the hon. Gentleman as much as he would have liked, but I urge him to deal with the issue. I hope that he understands the important reason why Ministers do not engage in challenging such decisions. Our task is to ensure that any information we have is put before the Arts Council, but the decision has to be for the council. I support the proposition that underpinned its strategy this year, which was to refresh its portfolio to fund innovative, new theatre organisations so that the cultural ecology of the UK could remain pre-eminent in the world today. Within that policy, there will always be challenges for individual theatres, and for the theatre sector as a whole, but we are in a better position to meet those challenges, and to make the most of the new opportunities on offer, than we ever have been before. I hope that, in that spirit, the hon. Gentleman will accept my response.

Question put and agreed to.

Adjourned accordingly at twenty-eight minutes to Eleven o’clock.

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