Funding of the Arts and Heritage - Culture, Media and Sport Committee Contents


Arts and heritage in Britain are among our greatest assets. They bring great cultural and economic benefits and everybody should have access to them.

Since the Second World War, most arts and heritage organisations have operated on a mixed funding model, whereby their income is made up partly of public subsidy and partly of private investment and earned revenue. This model has worked for them, and we support mixed funding.

In the last 20 years the arts have enjoyed a period of high levels of public investment, which has created a vibrant and successful arts scene in the UK. This financially comfortable period led to the Arts Council's spending on its own administration to rise to much too high a level. Government funding for Arts Council England increased by just over 150% to £453 million in the 12 years to 2010, while funding for English Heritage, for example, has actually fallen in real terms.

The Arts Council has undergone considerable change in recent years and has already cut its administration budget by over 50%. A further 50% cut will be hard to achieve, particularly given the extra responsibilities that the Arts Council is taking on. However, we believe that it can be managed.

Recent cuts in public spending will have a major impact on arts and heritage organisations, and some may well be forced to close. We note that some of the impact of the cuts could be mitigated by better financial management in arts and heritage organisations. We welcome the Arts Council's commitment to helping arts organisations do this.

We welcome the launch of the Arts Council's National Portfolio funding programme, and comment that it has the potential to offer more strategic and finessed funding arrangements with arts bodies. However, we are concerned at how great an administrative task it is to assess all the applications for the National Portfolio, and to draw up funding agreements in the two months that the Arts Council has set itself. Given that so many arts organisations will not make it into the National Portfolio, the short time frame will inevitably leave the Arts Council open to criticisms that its selection process lacked rigour.

We note, however, the role of the Government in encouraging the Arts Council to stick with its target decision date of March 2011 for the new funding programme, notwithstanding the burden it has also faced in implementing cuts across the sector in tandem.

Applying for grants is a necessary evil for the arts sector and it is important that due process is followed. We are concerned the Arts Council may not be supporting arts organisations in this process as well as it should, and it must be a priority to do so.

We acknowledge the vital role played by the Arts Council in supporting a myriad of groups across the whole sector. Without this support many would certainly cut back or close. There have been mistakes, however, and we note that the case of The Public gallery in West Bromwich is perhaps the worst example of gross waste of public money by the Arts Council. Although this occurred under the previous management, the inability of the current Chief Executive to provide answers to our questions or demonstrate any serious attempts to learn lessons from the failure of the project, does not inspire confidence in the Arts Council or its leadership.

The Arts Council Collection is an important and valuable public asset and we commend staff on their efforts to ensure that people in every part of the country have access to some of the works within it. However, we believe more could be done to publicise it and that the Collection should aim to have at least 50% of its works out on loan at any one time. We also believe that the policy of never selling any of its artworks should be reviewed. We suggest that there is scope for amalgamating some publicly owned art collections in order to reduce administration costs.

We examine the Government's review of arm's length bodies, and its surprising decision to abolish the UK Film Council, Museums, Libraries and Archives Council and the Public Lending Right. We are critical of the Government's lack of dialogue with these bodies during its review and the surprising way in which it informed them of their abolition. We are also concerned that the decision was taken without any clear idea of which bodies would take on their respective functions.

With respect to the UK Film Council, it is a sad reflection of the Government's poor handling that it has led to the with withdrawal of one of our most distinguished film-makers, Tim Bevan, from any further involvement. We agree, however, that of the alternatives, the British Film Institute is best-placed to take over.

Regarding the Museums, Libraries and Archives Council, whose work was also commendable, we are concerned that the Arts Council - itself under pressure - will not be as effective a replacement and urge the Government to review this again in 2012. As for the decision to abolish the Public Lending Right body, we have found nobody who supports it. The Authors' Licensing and Collecting Society, not the British Library, is the appropriate organisation to administer its work and we recommend the Government acts to achieve this, by legislating if necessary.

Across the board, we acknowledge the concerns of arts organisations about the reduction in arts spending by local authorities, in combination with spending cuts from the Arts Council and we note that the impact of this "double-whammy" could be disastrous for some arts bodies.

Although spending cuts will affect a wide range of arts organisations it is those in non-metropolitan areas and small groups, particularly, which are most at risk. We are disturbed at reports of the number of local authorities already coming forward with substantial cuts. The speed, too, with which measures are being implemented makes it very difficult for smaller projects to look at other options, and it is of great concern that so many of these could be lost.

We note the importance of safeguarding the UK's heritage, as once lost it is gone forever. We comment that the heritage sector relies on expertise and skilled professionals and note, with concern, the continuing decline in local authority conservation officers and the impact this will have on the local planning decisions that affect heritage. Other sources of advice, such as the network of local architecture and design centres sponsored by the Commission for Architecture and the Built Environment (CABE), also face a precarious future because of cuts and we urge the Government to act to halt this loss of expertise across the sector.

We commend the Government's recognition of the importance of heritage tourism in Visit Britain's budget, but note that the heritage sector has already suffered disproportionately from funding reductions over the years. The abolition of the Regional Development Agencies will result in the loss of another important funding stream. We urge the Government to take account of the burden our heritage sector has already shouldered when making future funding settlements.

Arts and heritage organisations should be encouraged to become more commercially aware and explore other funding streams, although we note that this will be harder for some smaller bodies and those outside London and the metropolitan areas.

While we think that, for reasons of culture and size, it is unlikely that the UK will ever have a culture of philanthropy and private investment in the arts that resembles that of America, we note that there is more potential for arts and heritage bodies to gain extra funding from philanthropy and private investment, and that there are things they could be doing to increase their private income. We also suggest that there are things the Government and Arts Council can do to incentivise private giving to arts and heritage, including a local honours system. We are critical of the Arts Council's decision to withdraw funding from Arts & Business, which facilitates links with industry and commerce. It is a significant omission, too, from the Government's 'philanthropy strategy' that it has suggested no reforms to the tax or gift-aid system to encourage contributions and we urge it to do so.

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Prepared 28 March 2011