Funding of the arts and heritage - Culture, Media and Sport Committee Contents


Examination of Witnesses (Questions 101-112)

Q101 Chair: Can I first of all apologise to the three of you for keeping you waiting so long. Thank you for coming. For our second session we are now going to concentrate on local government and, therefore, can I welcome Gary Millar from Liverpool City Council, Simon Eden from Winchester City Council, and Guy Nicholson from Hackney Borough Council. David?

Q102 David Cairns: Thank you, Chair. At a time when you are going to be struggling to meet your statutory requirements in education and social care, and so on, and you are going to be getting additional responsibilities in health promotion and all the rest of it through the reforms in the health service, isn't the truth of the matter that funding the arts is a luxury which local government can no longer afford?

Mr Millar: Well—

  David Cairns: If you all say yes, we can go home now.

Mr Millar: It's the first time I've heard arts called a luxury. I'm from Liverpool, which held the best Capital of Culture ever—as pronounced by the President of the EU Commission. Whether it's debatable or not, culture and the arts has had a huge impact on Liverpool over the last five or six years, never mind the last 800 years. £800 million of additional economic spend because of arts and culture in 2008; 27.5 million visitors came to the city from outside of Liverpool because of arts and culture. That created jobs. It created jobs in not just the hospitality, the hotel, the bars, the tourism sector, which is very important, but also in relationship to creating add-on jobs in the knowledge economy or the science economy as well, because it was a five-year process from when Liverpool won the bid to actually delivering Capital of Culture. It's not just about Capital of Culture, it's the legacy moving forward. Moving into 2009 and 2010 in Liverpool this year is the year of health and well-being, delivering the "five-a-day" which includes "Connect" and "Give", "Keep Learning" and so on. They're not luxuries, they are the thread that runs through everything that Liverpool City Council and the public sector and the private sector is delivering, and keeps delivering for arts and heritage. So I wouldn't call it a luxury at all. I think it really is incredibly important to keep supporting arts and heritage and culture in all its forms, whether it's walking in a park, watching a football game, working on the internet, or going to an event in either a gallery or a theatre or visiting a museum. Liverpool has National Museums Liverpool: 3 million visitors in 2008, slightly less in 2009. The actual visitors to the museums in 2007 was 1.9 million, so to go from 1.9 million to 3 million people visiting a museum is incredibly important because it's about education. It's about new experiences. Again, I don't call that a luxury.

Mr Eden: I think, Chair, if I can add; I come from a very different area, work in a very different area from Gary. Winchester is the south, prosperous and a two-tier area in terms of councils. The district council sits within Hampshire. We work closely with the county council. I also work as part of a partnership of 11 local authorities in urban South Hampshire, the two city regions of Portsmouth and Southampton, and we don't see culture as a luxury either. We put, between us, a significant amount of money into cultural projects and we don't do it just because culture and arts are good things, for art's sake. Of course there's an argument for that. But the way the members I work for and the members I work within that partnership see it is that by investing in cultural activity they're providing something for young people to do.

For example, there's a very good dance project that the county and the district have invested in, which is in one of the more deprived areas. "Deprived" in our terms, by comparison with perhaps other parts of the country not so bad, but kids who are hanging around on street corners causing minor antisocial behaviour; the lads in hoodies, if you like, sometimes. Putting money into that project has those involved in street dance and there was a notable reduction in antisocial behaviour as a result of that. So we don't see arts culture as a luxury. That's just one example of where if you invest money in the right way, through the right project with the right partners, then you're delivering some really good things for your communities that are the sort of things your constituents will have concerns about.

Q103 David Cairns: Sorry. Clearly my question was intended to provoke discussion, not to reflect my personal opinion. But given all that you say then and given how wonderful this spending is in terms of its economic regeneration, tourist potential and educational blah-blah-blah, do you think there's an argument then, given that it's not statutory—like you're having to provide education and social work and all the rest of it—that there should be statutory recognition of the spend? Because, as a former councillor myself, you know that when you have to make cuts, where you're facing a choice where you know you have to provide social work or teachers but you don't have to provide money for the arts so that goes first, that there is a need for some kind of statutory recognition for this? Otherwise, good though it all is, it's all going to be the first to go.

Mr Nicholson: If I may respond, I think your original comment is well made. Like all services delivered by colleagues in local government across England and Wales, all of those services are under some kind of pressure or threat in the months ahead of us and certainly for the coming three years and that's been recognised in town halls across the land. Now, I think where it is that perhaps cultural spend has got to, and my colleagues were referencing some of this, is that the picture varies profoundly across England and Wales—so from council to council, from community to community—about the importance that's placed on the investment made into participatory activities, arts and culture being one of the most profound streams of activity through which participation can and does take place at a local level. In some places there is a great deal of recognition, a great deal of emphasis—and this is as much in the great urban centres as it may be in the more district-type centres—and importance is placed upon cultural participation. That's not where our worry is.

There are other places in the land where that is not the case; where there is, for one reason or another—and it's not always a blame that could be laid at the door of one organisation or one institution—a lack of engagement, a lack of interest perhaps, a lack of shall we say an understanding of the importance that arts and culture could play if the finance and the funding and the investment is aligned with that of the youth service, the community safety portfolio for example, indeed economic development around both job creation as well as business development. All these various strands of activity and more besides, including the future of the health budgets for example, all these things bring duality and additionality to the investment that comes into the arts via the Arts Council and via the local authorities and via the heritage bodies.

The challenge before us all is not necessarily a knee-jerk response about ring-fencing and statutory expenditure but I would suggest it's about aligning the institutions and saying to the institutions, "Now is the time to jointly invest into these participatory activities that now, more so than perhaps ever before, are going to be more relevant for the future well-being of our local communities. It's not the capital spend, I suspect, that we're going to have the luxury of using in the years ahead of us. It's going to be that revenue spend into participation to ensure that, at the very least, our communities remain coherent and cohesive; they remain neighbourly.

Q104 David Cairns: I get all that and that's a very good vision but I suppose the point I am making is we don't leave it to local authorities to decide whether or not they want to invest in education. They are told they have to do it and then they are inspected nationally. We don't leave it up to them to decide whether or not they want to invest in services for old people, they have to do it; or young people, they have to do it. It is not up to them to say whether or not to clean the streets. They have to do it. If this is as important as you three all say it is and it brings so much more both to the inhabitants of the boroughs and of the cities and of the tourists and all the rest of it, it is still pretty much discretionary how you do it. And I was just wondering whether or not—given that we are about to enter a very difficult time and, okay, I appreciate that ring-fencing and direct targets are out of fashion; not with me but they are with the current administration and we may see that reflected in the course of the questioning—but do you not feel that, unless there is some kind of policy determination on this, your wonderful causes that you've outlined, good though they are, are not going to amount to a hill of beans when it comes up against the statutory requirement that councils have to fund in an era of constrained spending?

Mr Eden: I tend to argue with my colleagues, with my members, that a statutory discretionary split, statutory/non-statutory, is not the right way to look at things now. We're being told, I think rightly, by Government that they want to free us up and allow us to do more according to local choice and according to what our local communities want, which I think is an excellent thing. If you start putting things in statutory and non-statutory boxes I think you miss the opportunity for some of the interactions between things and that's where a lot of cultural projects come in. We don't have an arts pot or an education pot or a social services pot any more, we look at how budgets can affect different outcomes. That's one of the buzz words we use at the moment, I suppose, but we look at the impact on our community. And if, by spending money to support a theatre or a community arts group, that can bring in young people who would otherwise hang around on street corners or it can help older people have something to do during the day, then that's a good outcome and you're achieving the sorts of things you want in terms of well-being for those older people or stopping antisocial behaviour. So I think it will be a retrograde step to start putting things in little boxes and calling them all "statutory".

The other fear I think we'd have in local government is that as soon as you call something "statutory" you start coming back to targets and things like that and I know there are different views within the House on the appropriateness or otherwise. But you'd expect me to say that I think central targets stop that flexibility to spend money in a way that our local communities want and that can make an impact in our local communities.

Mr Millar: Can I add there is an element of a requirement for a "preventative agenda", one that prevents disease, illnesses, and so on? There are ways, using culture and using the arts, to make people—and this might be seen to be fluffy and I don't think it is—definitely to be healthier but actually to be happier, too. The introduction of culture in the business environment, whether that may be, as I said before, walking in the park or playing some sport or doing some physical activity, reduces absences, sickness. That increases the economic value, spend and so on of that organisation. Whether it be really small or really large, it can make a big difference. It can make a big difference in local authorities. It can make a big difference in central government in terms of delivering cultural activities that are seen to be preventative.

I've seen relationships in Liverpool in particular where we have a very good relationship with the Primary Care Trust and we have co-funded and shared resources in supplying services that are seen to be partially cultural but it's about that activity. It's about doing a dance, going to a dance, going to a sports activity, doing something with crafts, but through the health service about making a bigger difference to the local communities. But that's decisions being made locally that are appropriate locally. It's not a "fit all" type of situation. It fits Liverpool. It might not fit some other areas. I would think it probably does in some things that we do and there are lessons to be learned but I think what could be seen to be a front-line service or a statutory service, if that's what it is, is with a health and well-being agenda and that is through relationships with whatever the health services are, together with the local authority and the private sector and volunteers and so on. So saying it's a statutory delivery; it should be an automatic delivery; it should run through everything we do and it should be about prevention as well as having fun. We still need the fun but we also need the prevention, too.

Mr Nicholson: Chair, just to add if I may; it does seem to me that the ring-fencing criteria is probably best applied as defining and setting outcomes rather than ring-fencing budgets. I think that if you reinforce that with a legislative programme that sets about bringing the public sector in all of its various different guises and shapes and forms—in other words public sector expenditure into communities—into a position where it is being required to jointly invest and finance into those outcomes and, as Gary was describing, all of it defined in a very local context. By "local" we would talk about a local authority area, for example, wherever it may be. That, to me, would then start to add a lot more substance to some of the ideas that we've been bringing forward in East and South-East London where we've been using the 2012 catalyst as the means by which, if you like, the legislation—and I use the term obviously somewhat loosely in this sense—provides us with the sort of direction, the sort of catalyst, that can define a set of outcomes, bring absolute consensus and agreement to those outcomes from a very, very broad range of organisations, individuals, as well as institutions and indeed the private sector, and focused on some very, very clearly defined set of socio-economic and socio-cultural outcomes.

Now, that is very valuable. What would have helped in that exercise is to have ensured that across the public sector there was an acknowledgement and an acceptance that that locally-led consortia approach, delivering on some outcomes, is indeed legitimate and in a position to be able to meaningfully take forward spend and bring forward some fantastic results in terms of outcome.

Q105 David Cairns: Thanks. Just one comment and then I will shut up. The nature of this exercise is that we have three exemplary local authorities who really value this and are going hell for leather and have seen the point of it. It might be an interesting exercise if we could find the three local authorities in the country that spend least on this and sat them there and ask them the same questions. But that is not what we are examining so I will pass back to the Chair.

Mr Nicholson: Sorry, Chair, could I just very briefly respond to that because I think that's a well-made point and I can give you an example where very recently, I was in Sheerness on the Isle of Sheppey where there is an extraordinary local energy around the future arts and cultural and heritage-led economy for that particular part of the land and, in particular, that town—that great historical naval dockyard and so on and so forth. That is consistently an area where it's coming up against a local authority that is not being receptive. It doesn't quite understand and appreciate the opportunity there and it doesn't quite connect what it is that is being described with some of those ideas locally with a future and future prosperity and, indeed, improving the quality of life for all of those people who happen to live in that particular town and indeed that particular area. And I think that is a well made point. That is happening across the country and our challenge is how can we move that best practice to those communities, support those communities and bringing forward the kind of philosophy that we've been describing, whether it's on a mega-scale, a macro-scale or a micro one.

Q106 Chair: But as Simon Eden rightly pointed out, we believe in allowing local authorities to have greater freedom to choose how to spend money. Some local authorities are going to choose to spend less on the arts. That's an inevitable outcome.

Mr Nicholson: I couldn't possibly comment on that one, Chair.

Mr Millar: Chair, could I add a comment to that? Because of our experience in Liverpool, I was asked to visit Plymouth last week and deliver a speech on "Culture Means Business" and the remarkable transformation in Liverpool due to culture. And, completely agreeing with Guy, some local authorities just don't get it and it needs I think, in some cases, the introduction of people like us who could go and visit and be advocates for the transformation that has happened elsewhere. They're very willing to listen. They invited me to come and talk about what we've done and make suggestions about what they could do.

The taxi driver that picked me up from the airport said, "Plymouth is a wonderful city but I don't do culture" and I said, "Where do you live?" and he said, "I live over there". I said, "What's this in front of you?" and he said, "Oh, it's the park". "Do you go into the park?" and he said, "Oh yes". His understanding of culture was different to my understanding of culture or many others. He didn't see that as cultural; he saw it as an activity. He took his dog out for a walk and right next to Peverell is Plymouth Argyle's football ground. I said, "Do you support football?" He said, "Oh yes". He didn't get sport as being cultural. He said, "I don't do culture. We don't do it. We don't get it here". They do get it but it's not articulated in the way that he understood as a local resident in Plymouth. So I thought, "Well, I'll do my advocacy here" and I said, "Well, this might be seen to be culture in Liverpool but it's actually just you going about your daily life, having fun, getting fit and so on". I think sometimes we have to articulate it in a different way depending on where we are. What he did say is, "Plymouth"—and it's not true—"lacks ambition". Plymouth has lots of ambition but it wasn't being articulated in the way that he understood and appreciated. I think it's about more communication, more dialogue; not just from other cities, other areas whether it be urban or rural. It's about people who've been there, done it and to come to summits and so on and discuss what we've done in other areas. It does work.

Mr Eden: Being the officer here, I would start by saying you're absolutely right. It is inevitable with localism that some may take a decision, "We'd rather spend on this than that culture" or whatever you choose to call it. I think the issue is making sure that we properly understand the ramifications and the consequences of cultural spend. It's not just about pumping £200,000 into subsidy for your local theatre. It's about supporting a theatre with an education programme, making sure it reaches the schools, in our case, for example, in the rural communities or making sure in other cases, it reaches more deprived communities with an education programme and saying, "Is that having an impact". If it's having an impact and it's having effect, fine. If it's not, then maybe you have your funding wrong. You shouldn't be funding that. You should be funding that over there.

So it does come back to a local choice and we shouldn't be, I think, expecting—which is my argument against statutory culture, if you like—that, therefore, everybody will get it and will spend money on culture. But I would ask that they think through the logical consequences of spending or not spending in particular areas and just think slightly laterally about the sort of projects that you can stimulate and the changes you can have. Who would have thought a dance project was going to get hoodies off the street and reduce anti-social behaviour. I went to a performance the other evening; it was absolutely fantastic and quite moving. So you need to think locally.

Chair: Damian.

Q107 Damian Collins: This one is primarily to Gary Millar. I suppose Liverpool is fortunate that two of your most iconic cultural attractions have been provided by the private sector in the form of the Beatles and the football clubs. Are there any particular lessons from Liverpool about how you can work with the private sector to make the most of the money you can spend as an authority?

Mr Millar: We do work with the private sector, hugely. The most recent example, and I'm sorry to keep coming back to the European Capital of Culture; the investment by the private sector was £22.4 million spent in that year on culture. That's a big spend; not coming from the public sector, it came from the private sector and that has continued. There are relationships with both Liverpool Football Club and the other great team, Everton Football Club who are slightly higher up in the league at the moment than Liverpool Football Club.

David Cairns: Most teams are higher up in the league than Liverpool.

Mr Millar: I couldn't possibly comment.

Everton and Liverpool are delivering physical activity and cultural arts projects themselves in the city. They're doing it in conjunction with the Primary Care Trust and the local authority, and also with organisations like Mersey Travel, the integrated transport authority—delivering cultural projects because they want more people to use their buses and their trains to go to attractions and so on. So there are relationships that link into things like transport. They are working now.

I think they work because it is lessons learned in terms of working as consortia as referred to by Guy before. They were working before but they are more obvious now and were more obvious in 2008. The Beatles; you may have seen the press this weekend. We have a new global peace monument in Chavasse Park in Liverpool One. It has made Liverpool the fifth most visited retail destination in the country in one year where it was 17th the year before. Liverpool One, the "Beatles' Story" and the city council worked together to deliver the global peace initiative monument. That is going to attract many thousands of additional visitors to the city based on peace and the heritage of the Beatles. So there are the Beatles, there are football clubs, but there's also the world heritage site. Very few people talk about it but the world heritage site, our heritage, is run by Liverpool City Council in a consortia with English Heritage. I don't think we do enough in that area because the world heritage site isn't promoted enough perhaps because we have just one conservation officer. We need more input. We need more partnerships with English Heritage through that.

Q108 Damian Collins: Outside of Beatles and football, do you think, looking at the world heritage site and looking at galleries like the Walker, there is more opportunity to bring in the private sector to support the public money that is spent on the arts in Liverpool?

Mr Millar: The Community Foundation—I don't know if you know the Community Foundation for Merseyside based in Liverpool—raises lots of money for communities by getting investment from the private sector mainly to then donate to community organisations including arts organisations and cultural and heritage organisations and that is a huge investment from the private sector. That is not run by the city council; it's a private organisation and it runs very well. As I say, huge private investment.

The private sector is constantly delivering projects integrating both the universities, the Liverpool Science Park, the Liverpool Innovation Park working with our cultural tsar—or is it now the innovation tsar—who is Phil Redmond who's responsible for part of the Big Society in Liverpool. That's the private sector that's doing that and delivering that.

It's just interesting that Phil Redmond is also the chair of National Museums Liverpool who is delivering a lot of volunteering and obviously venues; I think it's now eight venues, soon to be nine. In fact, the largest investment in culture in terms of a new venue, which is the new Museum of Liverpool, which opens next year; it's the first large sole-use museum in the country being built at any time in 90 years and it's opening in Liverpool next year. You must come and visit it. It's the only museum designated for the history of Liverpool from its maritime to its waterfront to its Beatles to its music. It's more than just the Beatles; 57 No. 1 singles have reached the charts from Liverpool. Best in the country; I'm very proud of that.

Q109 Damian Collins: If the city has as many advocates as you, then I'm sure it will be in no shortage of good publicity.

Just one final question if I may just on the other side of the equation looking at public support? In the previous session, we had the Arts Council in and I asked them about their relationship with local authorities. I think both from the submissions we received from local authorities and my own experience of the local authorities in my area, there is sometimes a frustration that when you're talking about transactions between public bodies, that it's unduly complex and bureaucratic and I wondered what your experiences were of working with the Arts Council to fund projects.

Mr Eden: Can I start with a comment on how we work? Not in my authority on its own; we have a partnership of 11 authorities in South Hampshire which includes Winchester. A couple of years ago, we became what was called "a priority place" for the cultural agencies, the cultural quangos. It was CLG, Communities and Local Government, with DCMS, and I always get the list wrong, but certainly the Arts Council, English Heritage, Sport England, MLA and I think one of the film bodies, maybe the one that still exists, maybe not, I'm not sure, came together in a group and said, "We want to support excellence in culture and the places that recognise culture, however one chooses to define it, as part of the growth agenda. That's what we're trying to do in South Hampshire, integrate culture into our growth agenda."

The fact that they came together, we became a priority place, meant that we had a single point of contact with the agencies, a single voice we could talk to and we were able to argue the toss with them over whether a particular funding scheme, a particular mechanism was over complicated. They became much more, almost relaxed, if you like, in their approach to how they worked with the local authorities through building that relationship and through coming together as a group of cultural agencies and working with the council. So I think where you can build those sorts of partnerships, that's a very effective way of overcoming those difficulties.

I think before we had that designation, we did find it much more difficult to work our way through the different types of bureaucracy and programmes and application mechanisms for different bodies. So there is an answer that is in the hands of the agencies and local government together that is to build that sort of partnership. Where it's done, it has been successfully. I think we've lost some of the constraints that used to sit around cultural funding that came from the Arts Council and they're much more focusing on the outcomes we deliver rather than a series of output type performance measures. So it's possible to do it, I think.

Mr Nicholson: What is perhaps worth considering for a moment is that I'm not wholly convinced, personally speaking, about the complexity of the funding regimes and trying to access those funding regimes as an organisation or an individual, for example; whether it's the Arts Council or indeed anyone else. Where there does seem to be a great opportunity before us is this idea that building upon whatever relationship it is that we have managed to achieve over the last four or five years between local government and the Arts Council across the regions. Going forward, there is a great opportunity before us that is more about very, very carefully considering how it is that, as we were saying earlier, we can not only align local political and policy objectives for the arts and have a responsive Arts Council that can then embrace those local objectives and pitch in all of the support that it could possibly muster alongside it, but also to think perhaps some steps further, which is as much about joint monitoring, monitoring of outcomes, monitoring of performance, audit, for example. In other words, the Arts Council and a local authority start to consider those very practical day-to-day things of spending public money into a community. The relationship between the Arts Council is resourced so there is the means to engage with a council, with a local authority. It's not that that's not there but it now seems there is an opportunity.

The other reason for saying that is that I'm not wholly convinced that the private sector— and I appreciate there are others out there who think the same—however it wishes to use its patronage, will finance the arts but probably only in the great metropolis such as Liverpool and the offer there; in Manchester and the offer there; in London and the offer there; some very specific institutions. Now, that is good; that is supportive; that's very helpful and perhaps that can be expanded a little. But there are many thousands of people across the country who are not part of those big organisations, who are the very heart and core of the arts in this country. They are the ones that generate the great creative products that come forward into the bigger institutions, into the bigger festivals. They are the ones that create content, in other words, and the investment from the private sector into those particular spheres of activity at that level in our communities, still remains to be proven that it could do that. I think we run a great risk going forward if we think that private sector sponsorship would bring that about. I am not so sure that it will, but I remain to be proven wrong, of course.

Mr Millar: Can I add? There are two things that came out of this. The first was your question about the Arts Council. I should declare an interest. I am a member of Arts Council North West, so I have an understanding of some of what it does as a council, not necessarily when it gets down to what the individual officers are doing on a day-to-day basis. I think the Arts Council does an amazing job. I have to say that and not because I'm on the council but because the relationship that Arts Council North West has with both Liverpool and Manchester City Councils is exemplary. It's a relationship that's as good with the council as the council's relationship is with DCMS. The Department for Culture, Media and Sport and the Arts Council significantly contributed, not necessarily financially but in terms of advice, resource, and so on, to the success in Liverpool of European Capital of Culture and going forward, but also in Manchester for things like the Manchester International Festival. They've done wonderful jobs.

Now the Arts Council, for example, also had the Sustain project and that was very good during the beginning of the recession to assist the Regularly Funded Organisations in a very quick but a very accountable way and heavily scrutinised, but with very low amounts of paperwork. So it wasn't unnecessarily bureaucratic because people needed help now to get over the hurdle then to still be there now and it's across the North West. I cannot say what's happened elsewhere regionally but I would imagine Sustain was rolled out across the entire country. Great art for everyone being delivered by the Arts Council is a lot less bureaucratic than it may have been two or three years ago and I think they need to be congratulated for that but as a local authority the relationship, forgetting the fact that I am a council member of the Arts Council North West, has been very good.

In fact, the Arts Council works with the arts' officers across the North West on a weekly basis. When they look at co­funding, they do it understanding the implication of what each party is doing and whether it's going to work and whether it's sustainable and whether it's going to be great art for everyone; so I think the relationship with the Arts Council and the local authorities in the North West is very good. The Arts Council North West delivered funding for Lakes Alive and when we had the flooding in Cumbria it was one of the very first organisations to come forward to assist with cultural and arts and heritage projects, not just to deliver those projects in terms of art but also to ensure that the hotels, the bed and breakfasts, the bars and the restaurants and so on, had customers. I think that's really important.

Q110 Dr Coffey: Councillor Millar and Councillor Nicholson, I grew up in Liverpool as well so I know the legacy that many years have generated, including in the 1980s and 1990s when Albert Dock was transformed and similar. To be frank, you've had your input, whether it was cash from DCMS for ECA, which it wasn't; it was resource, but it is still money that's being used. Is it time to say, "Well, Liverpool, you have to go on your own way with less now from the centre" and that we should be focusing on those other regions that don't seem to have had perhaps the same prominence—so it is an element, I would suggest to you perhaps, of pump-priming—or do you think that is unfair on an organisation that has been successful?

I am happy to hear from either because I can give you another example of Basingstoke. For example, Basingstoke 30 to 40 years ago invested itself in building a magnificent centre called the Anvil Theatre, deliberately because it knew it would attract in high-quality businesses. That's exactly what happened and they pulled in multi­nationals to make it a nice place to live and work. So I am interested to say, "You've had your pump-priming. Can't we now give it to somebody else?"

Mr Millar: With respect, if I can just answer that—you're from Liverpool?

Dr Coffey: That is where I grew up, yes.

Mr Millar: Yes. I actually disagree. You know the Albert Dock and everyone knows the Albert Dock; everyone knows the Pier Head.

Dr Coffey: I know Sudley Gallery; I know other places.

Mr Millar: But then there's Kirkdale, the Dingle, Anfield, Everton; there's North Liverpool. We've had pump-priming and it has had a huge impact on the city centre leading out towards the M62 but not quite as far as the M62 and that's been wonderful. £2 billion has come to Liverpool through Objective 1 and Objective 2 funding—wonderful and it's only the start. We cannot forget the communities outside of the city centre and they need concentration. They need more Preventative Agenda, more culture, more art, more heritage, more infrastructure, more regeneration. Because we can't ignore the many thousands of people, 42% in North Liverpool, who are workless, who don't have a job, and it's really important that we create the infrastructure outside of the city centre to make sure that Liverpool and Manchester and Newcastle and Sheffield and Bristol and Birmingham and all the great cities in this country—and they're all great cities—are transformed using the legacy and the lessons learned from the Albert Dock and the City Centre of Liverpool or in Manchester because there's a lot more to do. We haven't finished yet and we can't forget our residents by ignoring those what some people call "disadvantaged", some people call "deprived" communities. They are as equally important as the 20,000 residents that live in Liverpool city centre because there's another 430,000 currently living in other parts of the city that need as much pump-priming as the city centre has had.

Mr Nicholson: Chair, I wonder if I could just come in on that. I think first of all, I would suggest that we perhaps look at capital and revenue. And what is the purpose of capital? Capital is a one­off, it's a pump-primer perhaps, and that is perhaps something that has been going on over the last 10 to 15 years in terms of capital investment into the infrastructure, the buildings, and the very fabric that supports the arts across the land. Then there's the revenue bit and the revenue bit is somewhat challenging. If perhaps you were considering the idea that revenue and capital are one and you use it as a pump-prime and then pull back from a project once you have built it out and you've set it off in motion, leaving it unsupported, un-invested, then I would seriously consider, are we using our assets and our institutional structures to the best that we could use them for?

If I may just use an example; we have the Royal Opera House receiving considerable sums of public money each year. Some people feel that this is over the top; it is too much money. But when you look at what it is that the Royal Opera House is doing, not just within its main campus in Covent Garden, but its relationship with local government in Thurrock and the new National Skills Academy, and the new Production Park that the Royal Opera House has brought forward in that particular borough just to the east of London, and when you look at the Royal Opera House and the discussions that the two chief executives are having, the Royal Opera House and Manchester City Council, about taking the Royal Opera House to Manchester and a new home for opera and ballet in the north, that to me is a good investment.

If perhaps we had just done a pump- priming into that organisation, the Royal Opera House, then I'm not quite certain how that kind of expansion into communities as diverse as Thurrock and East London and Manchester in the North West—that kind of investment, those kinds of conversations, that kind of expansion of great art for everybody—those cultural opportunities could ever come about. And when you link that through very clearly to the National Skills Academy and the entire thing around skills development, employment and the future prosperity and well-being of the cultural economy itself in this country and the contribution it makes back to the Exchequer each year as a result of its successful operations both here and abroad, then to me we must consider very carefully this idea about, "Okay, if we say pump-priming, what is the project? What is it we're talking about? What do we mean by pump-priming? Are we talking about capital and revenue or just revenue or just capital?" It's a very delicate balance. Success breeds success, I think, and we must never lose sight of that.

Q111 Dr Coffey: I recognise that, by the way. It's just Arts Council England are going to be setting their criteria and they haven't said what it is going to be. I'm slightly disappointed that you say you've had all this money for the European Capital of Culture and you failed to reach 42% of your residents; so that's slightly disappointing. I am concerned for the Shires, as it were, outside the metropolises and how we make sure that—of course, I want to see a fantastic regional arts presence but also I'm keen that my arts' festivals keep going, thanks to voluntary effort, but we make sure we get to those other hard-to-reach places.

Mr Nicholson: Yes. Sorry, Chair, if I may; that is well said. Where it is that we've just come out of in East and South East London over the course of the mid­summer months; the new international festival for the arts called Create, we've used that very deliberately around the 2012 catalyst as I touched upon earlier. What was interesting about that was that we've gone into some of the communities that show the lowest levels in the United Kingdom in terms of cultural participation as far as residents are concerned and we are gradually, over the course of time, reversing that outcome, that statistic. What has been quite heartening to see is that—and if I may just revert back to the private sector—the private sector are investing into this as much as the public sector and a very eclectic group of organisations and institutions and the investment brought about participation levels of around 900,000 people in that part of London over the course of the summer. It reflected an investment that was touching £1.5 million in addition to what it was that was already being invested into in those communities through the arts and cultural scene.

Now, to try and take that model and that approach into those communities, the rural communities that Simon was touching on—into those provincial towns, for example, those market towns and spaces—to me is a great challenge going forward. I completely agree that it's unclear as to how we can bring that about. What is it that can do that? Perhaps it is, as Gary was saying, more to do with peer mentoring and just ensuring that through the Arts Council, through the local government family, that we can bring that peer mentoring, that practical support to bear and that practical experience too; but to disseminate out now from the centres and recognise that capital isn't perhaps something we are going to have the luxury of for the years ahead. Revenue, we might be able to hold that line and that's the crucial thing, joining in, and if we can bring that about, that's the point of the whole thing.

Mr Eden: Chair, if I can add to that; as Chief Executive for one of the arguably greater cities, second only to London, an ancient capital of England, there are different sets of issues and we will look jealously in the shires from time to time at the big funding going to London institutions, to cities like Liverpool and so on and so forth. The answer for us I think is to get our act together. It's not realistic to assume that similar amounts of funding are going to come into Winchester or Basingstoke or Uttlesford or places like that. And Uttlesford is near Saffron Walden, for those of you who don't know; perhaps it's one of these made up names, I think. What we need to do is get our act together as groups of local authorities with a common—I cannot use the phrase "sub-regional" anymore, so whatever I think replaces that.

Q112 Dr Coffey: County?

Mr Eden: County perhaps but not necessarily. If you think around areas that work for communities, they are very rarely areas that are also defined by local government administrative boundaries. We tend to work in South Hampshire, along that south coastal strip. Basingstoke tends to look to the Thames Valley and work with colleagues in the Thames Valley, across county; across all sorts of boundaries.

The answer for us is to get our act together and make a case for strategic investment by bodies like the Arts Council where that can stimulate the growth of partnerships, the bringing in of private sector money, as we've seen for example in a couple of projects in Portsmouth that we're working on or quite separately in more rural projects. It's for the shires to get their act together and argue their case for our own take on culture and how we can work together and what our particular needs are, which are going to be different from Liverpool's or Hackney's or wherever else.

Mr Millar: Chair, can I add an interesting fact?

Chair: A last thought, yes.

Mr Millar: Interesting fact; local authorities spend more on arts and heritage than the Arts Council of England, if you exclude the lottery. £1 billion a year is spent by the local authorities, safely, sustainable and accountable, year after year. That's supporting the theatres obviously; heritage participation, health and well-being consortium and whatever. I think if I could stress anything, I think it is, going forward, for a mixture of, as we've discussed before, private sector, public sector, consortia delivered, volunteering and philanthropy. Not every business can do all this but some can get involved. I think there is a need to look at place-based budgeting, allow the councils to spend the money on what they see as fit for their area, whether it be rural or whether it be urban. They have made the choices in the past. They've done it with £1 billion a year in their expenditure and they can be trusted to do that and that's one of the messages I would like to get across today.

Chair: That's very helpful. Thank you, all three of you, for your patience in waiting and for your efforts.


 
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