|Examination of Witnesses (Quesitons 60-79)
DEPARTMENT FOR
CULTURE, MEDIA
AND SPORT,
SPORT ENGLAND,
ENGLISH HERITAGE,
ARTS COUNCIL
AND BIG
LOTTERY FUND
MONDAY 2 JUNE
2008
Q60 Mr Burstow: And the greatest
investment of time.
Mr Wanless: Absolutely, but our
consultations with the voluntary community sector have said time
and time again that they value an open programme and the opportunity
to have a go at the money. We will be consulting on our post-2009
programmes later this year and I think it is a really important
question for us to address with all interested parties about the
pros and cons of these more open programmes for larger sums of
money because they do have higher potential failure rates. The
flip side of that is that we prescribe more tightly the sorts
of projects that are likely to be eligible and also to fail at
an early stage of the process.
Q61 Mr Mitchell: Why can you not
develop an automated standard service as they have for grant applications
in America? I see in paragraph 4.15 that "the Cabinet Office
estimate that by sharing corporate services, such as human resources
and finance functions, more effectively, central and local government
could make savings of £1.4 billion". In figure 22 above
that it says that the USA have an efficient system for sharing
some basic services and referring grants off in the right direction
but a common website. Why can we not have that?
Mr Holgate: Like others, I have
been navigating Grants.gov with interest over the past few weeks
and I am grateful to the NAO for unearthing this example. As someone
else said, it is something of a portmanteau system. It is not
really a unified or particularly user-friendly system as it happens.
It is mostly, to my limited experiment, a way that the federal
government liaises with all the other bits of government in the
United States, and although there are grants there—
Q62 Mr Mitchell: Yes, but you preside
over them all, do you not?
Mr Holgate: Yes, over the lottery
instruments.
Q63 Mr Mitchell: You could provide
or insist on a common system.
Mr Holgate: That depends on how
homogeneous you can make the grant schemes which these bodies
run which have quite different customers and sometimes for quite
different purposes. The core issue here is the interaction of
the obvious attraction of common processes against the fact that
it might militate against, for example, the outreach that these
non-departmental public bodies undertake to bring forward applications
that would not come anywhere near more of a one-size-fits-all
website. There is a trade-off. You could try and do both but that
would add to cost and Committee members have rightly emphasised
their interest in cost.
Q64 Mr Mitchell: I think applicants
might find it more confusing. I see from the report that a lot
of people are milling around huge of crowds of people applying
for grants, often not accurately, not filling in the forms correctly,
many of them inexperienced, not knowing what the hell to do. On
Reaching Communities, for example, I see that over 600 people
a year are spending time putting together grant applications rather
than actively helping their communities. You are imposing a small
industry on people. This must be an area into which consultants
are going to move, saying, "We can advise how to get grants
and we will do so for a small cut of the grant", or something
like that, and, "All our applications are guaranteed successful".
Is there any sign of that happening?
Mr Holgate: I am afraid I do not
know the answer to that. Does anyone know?
Mr Davey: I am not aware of it.
Mr Holgate: We are not aware of
it.
Q65 Mr Mitchell: How do you know?
Have you considered the issue?
Mr Wanless: We are back to the
Reaching Communities programme again, which, as I said, is our
most open grant scheme because we were responding to voices in
the sector who said they wanted an open programme and were willing
to pay the price, if you like. We have certainly sought to reduce
the costs subsequent to this report which was in 2006-07 by having
a much tighter outline proposal form stage so that we can guide
people at a much earlier stage of the process on the basis of
the form, which is very much shorter, as to whether they have
any chance at all of accessing the money. In 2007-08 over 60%
of potential applicants were advised at that simple stage, well
before the man hours you are describing, not to proceed with their
grant application.
Q66 Mr Mitchell: That is a welcome
development. That imposes costs on you presumably.
Mr Wanless: It does but it is
a cost benefit because for us that process takes on average two
and a half hours and if we choke off the application it saves
us a process which takes 15 and a half hours, so it is well worth
doing. Whether there are more people disappointed at the news
that their—
Q67 Mr Mitchell: I was asking whether
there is now a breed of consultants arising, which is happening
in so many other fields of government, and I know in north-east
Lincolnshire we had an adviser attached to the council who advised
groups who to apply to and what channels to use. When, of course,
in its usual round of economies, that job went out, I had lots
of applications come to me and I had not the foggiest idea, but
there must be a situation where advice locally or from consultants
helps people. How do you know that is not happening?
Mr Holgate: Sometimes it may not
be a bad thing—sometimes. The question is whether it is
introducing—
Q68 Mr Mitchell: It would be a bad
thing if it were done for money.
Mr Holgate: Absolutely, and it
would be a bad thing if it distorted the application and misrepresented
the application on the basis of being more likely to get the money;
we entirely accept that, but I do not think we are conscious of
such examples.
Mr Wanless: Our regional outreach
operations are looking systematically across the areas of England
at the pattern and availability of decent advice to help people
apply for awards and we will look to support and pay attention
to the areas where that kind of advice is not available.
Q69 Mr Mitchell: I cannot see why
it costs so much in terms of the number of full-time staff, for
instance, in the arts compared to the amount of money disbursed.
We have got one estimate that for £1.8 billion in grants
there is £647 million in costs, and we are only dealing with
a proportion of that.
Mr Holgate: Exactly.
Q70 Mr Mitchell: But why is the ratio
of costs to grants so high?
Mr Holgate: I think the £647
million is the total of the grants given under these eight schemes.
Q71 Mr Mitchell: Exactly, and we
are dealing with about a third of it but if the ratio is the same
it is huge.
Mr Holgate: You are dealing with
a third of the grants that the department oversees in total and
the costs in administering those grants vary from 1p or 2p for
the arts regularly funded organisations through to, I think, 4p
for Awards for All, through to 7.6p for the repair grants for
places of worship up to the 35p that Alan was discussing earlier
on the Grants for the Arts to Individuals. The percentages differ.
Actually, seven of the eight schemes and all the seven biggest
schemes cost in the range of 2p to about 8p and it is a modest
crumb of comfort—only a modest crumb—that in paragraph
2.17 the NAO kindly give us two rough benchmarks from other sectors
where it is 9p and 10p for the other two organisations.
Q72 Mr Mitchell: Let me turn to the
Arts Council. Paragraph 1.16 says, "In 2006-07, the Arts
Council employed around 870 staff and its total operating costs
were £51.67 million". It is a huge number to give out
the grants you are giving. That is imposing a burden on the arts
community, is it not?
Mr Davey: Would it help if I clarified
that figure?
Q73 Mr Mitchell: Yes, it would.
Mr Davey: Two hundred people of
that figure are responsible for delivering the Creative Partnerships
programme, which is a programme that works between arts organisations
and schools. If you take the totality of the money we give out
and our administration, that is working out at 8% at the moment
overall and that is down from 10% three years ago. The report
here is examining only some of our grant-making activities, the
main ones. If you take the three grant-making activities that
are considered in the report, they are giving out £399 million
and the administration cost directly attached to them is something
like £14.9 million. That works out at about 5.6% on average.
However, the Grants for the Arts for Individuals programme is
very expensive at 35p in the pound.
Q74 Mr Mitchell: Why does it cost
so much to give very small sums? Why do you not raise the limit?
You have raised it from £200 to £1,000, which seems
sensible. Why not raise it to £5,000? £200 to an artist
is peanuts, is it not?
Mr Davey: But often £1,000
could be quite valuable. I quoted an example of a novelist and
he required something like £4,000 to give him the time to
write his book because he had no other source of income and also
he needed the encouragement of our literary department in his
regional office to develop his project.
Q75 Mr Mitchell: I am a photographer.
If you give me £5,000 it is peanuts. It would buy two cameras.
Mr Davey: It might well buy two
cameras but they are cameras that you can use to take excellent
photographs with, or it might buy some time.
Q76 Mr Mitchell: I notice that your
costs for regularly funded organisations are much lower. That
is as it should be, but then you did not have a big take-up last
year and you decided not to fund regularly some of the regularly
funded bodies. That must have cost a lot in staff time.
Mr Davey: It was a fairly intensive
activity but that is at the core of what the Arts Council should
be about.
Q77 Mr Mitchell: Have you now pulled
back on this?
Mr Davey: Every three years we
get our money from government and we allocate the money to regional
regularly funded organisations. We took the money away from around
180 organisations, we brought 80 new organisations into the funding
mechanism who were not funded before and we gave 264 organisations
an increase of more than inflation, so we were investing in quality
and depth of the arts experience, and that was a legitimate part
of—
Q78 Mr Mitchell: I will stop you
there; I am at the end of my time and tether, but I just wanted
to refer you to one point, which is English Heritage, and I am
not sure why this is in but there it is on page 5, "In 2007,
a grant of £127,000 was awarded to the Losang Dragpa Buddhist
Centre at Dobroyd Castle in Todmorden, West Yorkshire". This
sounds like Daily Mail stuff, does it not? "The grant
was used to fix a leaking roof and preserve the intricate stone-work
and tower". It is a beautiful folly. It was built by the
Fieldens who started the cotton industry in Todmorden in the 19th
century. It is a Grade II* listed building. One can make fun of
that and say, "How many Buddhists are there in Todmorden?",
and I think the answer would be, "Not many", but that
was in 2007 that you gave them £127,000. Would it surprise
you to know that the Losang Dragpa Buddhists have all gone to
live in the south of France and the building is now up for sale?
This sounds extraordinary. English Heritage has contributed £127,000
to Buddhists who have now left the country and put the building
to which you have contributed the money—public money—up
for sale. Are you going to claim it back?
Dr Thurley: I have no idea why
the NAO chose this particular grant as an example. It is to my
knowledge the only time that we have ever funded a Buddhist place
of worship because our scheme is not only for Christian places
of worship; it is for all places of worship. I am quite certain
that the reason that we gave them a grant was because they fulfilled
the criteria in that at the time they were a viable place of worship,
it was a listed building and they had repair needs that they could
not cope with. I am afraid I am unable to comment about—
Mr Mitchell: Perhaps you could give us
some more information on that matter because it sounds extraordinary
that you gave them such a big grant in 2007 and at the end of
that year they went to the south of France. I would probably do
the same.
Q79 Nigel Griffiths: But the Lord
works in mysterious ways.
Dr Thurley: I have just been informed
by my assistant here that the grant was not actually taken up
in the end because the building was put on the market. A lucky
escape, Chairman!
Mr Mitchell: So the roof is still leaking!
Mr Bacon: What are you going to do about
the roof?
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