3 Heritage funding
149. When we were drawing up the terms of reference
for our inquiry, we decided to include both arts and heritage.
There are many similarities between the two sectors, including
dual funding from Government and National Lottery funds; the distribution
of Government grant-in-aid by arm's length bodies; and recent
cuts to these budgets.
How heritage is funded
150. English Heritage, established in 1984, is an
arm's length body that performs multiple functions: statutory
advisor to the Government; designator of heritage assets; technical
research and advisory organisation; grant giver; property manager;
and membership organisation.
It operates at a national level and at nine regional offices and
a large number of individual visitor sites (such as Stonehenge).
151. The organisation's budgetary position has deteriorated
in recent years. Grant settlements since 1997 have been below
inflation resulting in a real terms reduction of £130 million.
English Heritage also considers itself disadvantaged by comparison
with DCMS support for sports and arts. In the last ten years Arts
Council England's budget has increased by 90% and Sport England's
by 182%, while English Heritage has been subjected to an 11% cut.
The Heritage Lottery Fund and the National Heritage
152. In 1994, the National Heritage Memorial Fund
(NHMF) and its Trustees were given the major task of distributing
the heritage share of Lottery money for good causes, which it
now operates through the Heritage Lottery Fund (HLF). Both the
NHMF and the HLF have wide remits to contribute to safeguarding
heritage in the form of collections and objects as well as buildings
and landscapes, and operate over the UK as a whole. In the case
of the NHMF this is often in the form of emergency acquisitions
for the nation, such as the recent retention of the Staffordshire
Hoard in the West Midlands, and is the only dedicated source of
this kind. Both differ from, for example, English Heritage, not
only in terms of wider geographical coverage but also by not being
able to assist individual private owners.
The importance of heritage
153. The historic environment comprises assets of
enormous cultural, social, economic and environmental value. These
contribute to our quality of life and the qualities of the places
where we live, work and spend our leisure time and are a vital
cultural and educational resource. Heritage sites may be of international
significance or of local interest, but all are important to the
communities in which they are located and once lost they are lost
THE ECONOMIC VALUE OF HERITAGE
154. As with the arts and other cultural activities,
heritage also contributes to economic growth, regeneration, education
and tourism. A report published by the HLF and Visit Britain in
March 2010 revealed the value of heritage for the economy, as
- Over 10 million holiday trips
are made by overseas visitors to the UK each year with 4 in 10
leisure visitors citing heritage as the primary motivation for
their trip to the UK - more than any other single factor;
- Heritage tourism is a £12.4 billion a year
industry. This is the annual amount spent not just at heritage
attractions themselves (for example the cost of entrance to a
historic site or in a museum shop) but also the broader amount
of spending that can be reasonably said is 'motivated' by the
desire to visit heritage attractions (for example visiting a restaurant
or staying at accommodation in heritage sites);
- Domestic tourism or the 'staycation' is the main
component of this expenditure; of the annual £12.4billion
spent on heritage-based tourism, 60% comes from UK residents on
day trips and UK holidays;
- £7.3 billion of heritage expenditure is
based on visits to built heritage attractions and museums, with
the overall £12.4 billion including visits to parks and the
countryside as well;
- The direct GDP contribution of heritage tourism
- the wages and profits earned by tourism businesses, such as
hotels, restaurants and shops, as well as heritage attractions
themselves - is estimated at £7.4 billion a year. Once economic
multiplier impacts are added - such as the income earned by suppliers
to tourism businesses - the total GDP contribution of heritage
tourism is £20.6 billion a year;
- Tourism has the potential to be one of the fastest
growing sectors of the economy over the next decade, and the appeal
of heritage will be vital to that growth.
155. Although the Government has acknowledged the
importance of heritage tourism to the UK economy
and Visit Britain's £50 million marketing budget has been
protected as part of the CSR settlement,
continuing concern has been expressed about the value government
attaches to heritage. The Heritage Alliance, Historic Houses Association
(HHA) and HLF have told us that they think the impact and economic
potential of heritage tourism has been undervalued by Governments
in the past.
156. Edward Harley, President of the HHA, told us
that historic houses alone contribute £1.6 billion to the
He also told us that in rural areas, the 500 members of the HAA
who open their houses and gardens open to the public (which represents
more than English Heritage and the National Trust combined) attract
14 million visitors a year and over 300,000 educational visitors.
£139 million per year is spent on conserving these historic
houses and their contents, largely without public subsidy.
Much of this expenditure feeds back into the local economy, including
much needed local employment.
157. We are pleased to note the Government's recognition
of the importance of heritage tourism to the UK economy by protecting
Visit Britain's £50 million marketing budget in the Comprehensive
Spending cuts and safeguarding
158. In a letter to the NHMF dated 20 October, the
Secretary of state outlined the impact of the CSR on the NHMF:
The budget for your organisation will be cut
by 54.5% in real terms and will be £20m over four years.
This settlement is to enable NHMF to continue its important role
as the fund of last resort for acquisitions of heritage at risk
of being lost to the nation. Within this settlement and in keeping
with my priority to bear down on administration costs, I would
like NHMF's administration costs to be reduced over the period.
I would like you to make reductions at least in line with those
being made for HLF as a result of my request that lottery administration
be reduced to 5% of overall costs.
159. Carol Souter, Chief Executive of the HLF told
I think it's clear that the financial impact
is significant from the work that we had done, in advance of the
CSR, looking at what various percentage reductions might mean.
I think we're expecting that maybe £650 million to £675
million overall will come out of the sector using our definition
of heritage, which includes natural environment, museums, historic
environment, and so on.
160. There is also concern in the heritage sector
that the CSR requirements for the HLF and NHMF to reduce administration
costs could have an impact in the HLF's funding decisions. The
The HHA shares the concerns expressed by the
Heritage Alliance about the requirement for Lottery distributors
to reduce the proportion of funding for administrative purposes.
This could have the negative result of discouraging distributors
from making smaller grants which are proportionately more costly
161. We put this concern to Carol Souter, who responded:
we allocate budgets to the various sizes of grants
and we will make sure that we carry on putting significant amounts
of money into the small grants. They are very successful and very
important locally, and at a time when you might have expected
applications to go down, because people were worried or stressed,
or not confident about things, we have good strong levels of applications
for the small grants.
162. We asked Loyd Grossman, Chair of the Heritage
Alliance, what he thought the impact of these cuts would be for
heritage organisations. He told us:
Heritage funding has been declining very significantly
since 1997. Heritage is way behind other sectors which the DCMS
has been funding, so this was a particularly savage cut for us
to take. In terms of the effect on delivery of front-line services,
I'm particularly worried about the many smaller organisations
and institutions that are going to be affected, as there is a
tendency to concentrate on the big trophy properties and the big
national organisations. However, the heritage sector is extremely
complex and involves hundreds, if not thousands, of local and
regional organisations, all of whom depend for their fundamental
well-being on the general health of the sector. These smaller
organisations will be damaged disproportionately by the cuts because,
of course, they do not have the fundraising ability of the larger
163. English Heritage compiles and publishes statistics
on Heritage at Risk and listed buildings.
Heritage at Risk is published annually as a register containing
all heritage sights in England deemed to be at risk by English
164. The HLF told us that public spending cuts have
implications throughout the sector but have particular consequences
for Heritage at Risk.
English Heritage wrote:
In 1999, one in six buildings on the Heritage
at Risk Register was fully economic to repair. In 2010 that figure
has fallen to just one in eight. The "conservation deficit"
- the difference between the cost of repair and the end value
- of these 1,218 buildings is now estimated to be £465m,
a 10% rise on the 2009 figure. Public funding and resources are
critical to ensuring these, our most important national assets,
are brought back into viable economic use and are not lost to
future generations. Reductions in public funding alongside restrictions
on credit, falling investment returns and the failure of development
companies will make it much harder to find viable solutions for
our heritage at risk.
165. Simon Thurley, Chief Executive of English Heritage
also told us that a lot of English Heritage's expenditure increasingly
focussed on helping people undertake satisfactory maintenance
rather than intervening later in a more expensive repair problem,
and that this would be more difficult if budgets were cut.
166. Another issue for the heritage sector is the
economic impact that VAT has on the maintenance and repair of
historic buildings. Our predecessor Committee examined this subject
previously in 2006, and concluded that "the issue of VAT-rating
for repairs to listed buildings united the sector perhaps more
than any other evidence";
and that the VAT regime "rewards neglect and works against
conscientious maintenance of historic assets".
167. This issue remains a matter of great concern
today. Simon Thurley told us:
We have raised the issue of VAT many times with
the Government. In the context of the spending review, the conversation
we've had with them has been about the listed places of worship
VAT reclaim scheme, which is a sort of substitute scheme for the
big decision that we would really like, which would reduce the
burden of VAT on repairs to historic buildings.
168. We urge the Government to commission research
into reducing the rate of VAT on historic building repairs as
a means to better protect them and to act as an economic stimulus.
THE IMPACT OF SPENDING CUTS ON HERITAGE
169. Most of the written submissions we received
for our inquiry were made before the outcome of the CSR, although
it was, by then, almost certain that DCMS would be administering
cuts to the grant-in-aid for all arm's length bodies including
170. In some parts of the heritage sector it will
take several years for the full effect of the cuts to be felt.
Many of the submissions emphasised that public-private partnership
funding was an essential component of the heritage sector and
would be severely affected. Lottery awards of over £50,000
require partnership funding of at least 10% with awards over £1million
requiring applicants to raise 25%. In many cases this comes from
local authorities, which are themselves cutting budgets. Some
larger urban regeneration schemes and public historic park projects
require 70% match funding from within the public sector.
171. The Institute for Archaeologists stated that,
even prior to the recession, cost cutting measures had in some
cases jeopardised the future of local authority historic environment
services and there were now "very real fears" about
The HLF referred to their concern that the legacy of the Lottery
investment of the last 16 years "should not be jeopardised
by cuts to those parts of the sector unable to adapt quickly for
good reason, or through cuts that are made in too much haste".
172. Both English Heritage and the National Trust
are membership organisations. The National Trust has 3.8 million
members and makes 31% of its overall income from membership subscriptions.
English Heritage has not traditionally had such a strong membership
base as the National Trust, but Simon Thurley told us:
[...] we're about a million members calculated
on the same basis as the National Trust does that, which is obviously
a quarter of what it has. We've had a very rapid increase in membership.
Over the last eight years, it has increased by 62%, which is a
very steep increase. We are very keen on it because obviously
it is a way of getting secure income. Most people who sign up
remain members for at least three years and that is guaranteed
income for us. It is really the backbone of what we do. Three
years ago, for the first time, we made more money through membership
than we did through admissions at the gate, which was an important
turning point in terms of the structuring of our business.
173. Unlike other DCMS funded bodies, English
Heritage has received grant settlements below inflation since
1997, resulting in a real term reduction of £130 million.
It has undertaken economies and efficiency savings over that period
to protect and advance its core activities and is collaborating
with the HLF to see where overlapping activities might be streamlined.
It is nevertheless struggling to undertake all the key aspects
of its wide remit. We note that English Heritage has had some
success in attracting funding from non-public sources and as a
membership organisation and manager of public heritage attractions.
We recommend that English Heritage examines ways in which it might
extend its commercial activities in similar ways to, and in collaboration
with, the National Trust.
174. However, we are concerned that the heritage
sector has already suffered disproportionately and is ill-placed
to sustain further reductions in funding. We also note that, unlike
much of the arts, once lost the heritage can never be replaced.
We urge the Government to take strong account of this in future
REGIONAL DEVELOPMENT AGENCIES
175. On 22 June 2010, the Government announced the
abolition of the nine Regional Development Agencies (RDAs) in
England - eight regional agencies through the Public Bodies Bill
and the London Development Agency through the Localism Bill.
The abolition of RDAs has been raised by the heritage sector as
a matter of concern; not least because the new Local Economic
Partnerships (LEPs) appear not to have heritage-led regeneration
as part of their remit; the geographical coverage of LEPs is not
yet comprehensive; nor is funding from bids guaranteed.
176. Heritage-led regeneration supported by the RDAs
in co-partnership with local authorities and the third sector
has in recent years greatly benefited many projects. The Lancashire
and Blackpool Tourist Board drew our attention to the significant
leverage effect of recent RDA heritage-related funding:
[North West Regional Development Agency] investment
of £350,000 from 2005-2009 in relatively small heritage attractions
(historic houses, mills, and buildings) resulted in more than
£1.38m from other sources being invested (primarily private
money), creating more than 8 full time jobs and attracting more
than 100,000 extra visitors in that period to attractions including
increasing the spending of existing visitors. Obviously, subsequently
there have been further visitor increases as a result of those
177. The National Trust praised the North East RDA
in its role in support of the acquisition of Seaton Delaval Hall
in Northumberland where the local community had raised £1
million towards the purchase.
178. Loyd Grossman, Chair of the Heritage Alliance
told us that the demise of the RDAs "will spark considerable
concerns because they were among the major investors in heritage-led
and cited an example of the detrimental impact where funding had
been withdrawn in Bolton.
He concluded that the withdrawal of RDA funding was being keenly
felt everywhere especially as the Government had not decided what
it wanted the LEPs to do. The HHA reiterated this concern because
"it is unclear who is going to pick up the pieces".
179. Abolition of Regional Development Agencies
will result in the loss of an important funding stream for heritage,
and of a catalyst for important regeneration projects. We understand
the concerns of the heritage sector at this potential reduction
180. We hope that the new Local Economic Partnerships
will take account of the benefit they can bring through active
intervention in the historic environment by promoting heritage-led
Heritage expertise and local
181. The issue of local authority heritage skills
and training was examined by our predecessor Committee, both in
its 2006 inquiry Protecting and preserving heritage and
its 2008 inquiry on the Draft Heritage Protection Bill 2007-08.
In its 2008 Report it noted that there was already a shortage
in conservation officers in local authorities and recommended
that "the Government set out a strategy for maintaining sufficient
numbers of conservation officers with the necessary skills".
182. Given the cuts in local authority budgets and
the removal of ring-fencing for local authority spending,
it would seem that once again local authority conservation officers
are under threat. We asked Simon Thurley whether English Heritage
was concerned about conservation officers. He told us:
[...] this is a matter of extreme concern. A
very important point I'd like to make to the Committee is that
while English Heritage obviously plays an important role in channelling
some parts of the Government's expenditure towards heritage, the
Government's investment in heritage is much wider than the current
£130 million that is the English Heritage grant-in-aid. An
absolutely vital part of that, as you rightly point out, is the
money that is spent on heritage by local government, particularly
through the employment of conservation officers, who are the front-line
troops in protecting heritage. [...] What we know from our figuresfrom
our surveysis that since 2007 there's been a 14% decrease
in the number of conservation officers. What is undoubtedly happening,
and is going to happen more, is that conservation officers are
not being replaced when they leave and the type of specialist
resource that has previously existed in planning departments is
no longer there.
183. He told us what he thought the impact of declining
numbers of conservation officers would be. He said:
Well, it means that the danger is that when planning
decisions are made that affect conservation, the local councillors
who sit on the planning committees do not have the appropriate
advice that will enable them to make sound decisions.
184. We also asked Loyd Grossman what the effect
of the loss of expertise associated with conservation officers
would mean for the heritage sector. He told us:
I think there is a danger that a skills base
and a knowledge base, which has been built up very carefully over
many decades, is going to be eroded very quickly. Rebuilding that
skills and knowledge base will be extraordinarily difficult. I
think I'm right in saying that I recently saw that Nottinghamshire
County Council are proposing a 75% cut to their conservation budget.
The long-term effects of cuts to conservation budgets, at local
authority level, will be very severe indeed.
185. Other bodies which are a source of planning,
conservation and heritage-led regeneration expertise to local
authorities are also currently under threat of closure. These
include members of the network of local architecture and design
centres, supported over the last decade by the Commission for
Architecture and the Built Environment (CABE) and which offer
expertise, and design review services, at rates far lower than
186. DCMS has cut its grant to CABE entirely. In
his evidence to us on 1st December, 2010, Minister Ed Vaizey said
the decision was "one of the most difficult we had to make
in the Department". He praised the body's work in promoting
design review and said it would be "regrettable if the learning
and expertise that CABE has built up over an extended period were
to be lost".
187. Since the minister gave evidence, CABE has been
merged with the Design Council and DCLG has offered £2.75m
funding for two years only. No commitments have, however, been
given about supporting the work of the local centres, which have
seen local authority funding cut and grants from soon-to-be-abolished
RDAs and regeneration agencies disappear.
188. We are concerned that the Government does
not realise that effective management of the historic environment
at local level cannot be adequately undertaken without sufficient
numbers of local authority conservation officers. The lack of
conservation officers was a matter of particular concern to our
predecessors in both 2006 and 2008 and we are concerned that the
position may deteriorate further in the light of local government
spending cuts. This will inhibit protection of the built heritage
and hamper proper consideration of development proposals in the
planning system when the economy recovers. We urge the Government
to remind councils of the need to retain their specialist heritage
professionals, an important statutory function.
189. DCMS' decision to end its grant to the Commission
for Architecture and the Built Environment (CABE) entirely was
harsh, especially given the minister's appreciation of its work
and that of the local architecture and design centres CABE has
fostered. We welcome CABE's continuation within the Design Council.
The severe cuts, however, have given the local centres, in particular,
barely any time to re-organise for the future and the danger is
that their valuable contribution will be lost. We urge DCMS, the
Department for Communities and Local Government and the Design
Council to consider as a priority how they can prevent this happening.
190. The heritage sector has made wide use of volunteering
and we asked Loyd Grossman how important he thought it was to
the sector, and whether volunteers could fill the professional
skills gap. He told us:
Volunteering is hugely important to the heritage
sector and I think we estimate there are about 500,000 regular
volunteers. But there are a couple of issues around volunteering.
One of the chief ones is the fact that volunteering is a complement
to professional staff; it is not a substitute for professional
staff. I think it's important to bear that in mind. Bearing that
in mind, [...] if we expect volunteers to do moreand I
think they should because I think our heritage volunteers find
the experience tremendously enrichingwe have to provide
them with the right level of mentoring; we have to provide them
with the right level of access; we have to provide a supportive
culture for them, not just look at them as cannon fodder that
can be thrown into the breach because we have to cut down on the
number of professional staff.
191. The National Trust is an organisation that has
utilised volunteers probably more than any other. The National
Trust operates numerous volunteering programmes including youth
involvement, working holidays, regular local group volunteering
as well as volunteer posts such as education assistants, car park
attendants or cafe workers.
The National Trust also operates the Employer Supported Volunteering
scheme, whereby private and public sector workers volunteer their
time in working hours.
192. We asked the Chair of the National Trust, Dame
Fiona Reynolds, whether the National Trust's volunteering programmes
could provide an example to the rest of the heritage sector. She
We have an enormous contribution through gifts
of time from our 61,000 volunteers. Again, the Government could
make it easier for people to give timefor example by volunteering
during work time. There's a very small amount of support for that
at the moment and it could easily be expanded. But I think there's
a risk that the Government sees the voluntary sector as simply
able to pick up all the issues that may fall outwe don't
yet knowof the Spending Review. And I think there has to
be a word of caution about that because all of us in the voluntary
sector are very clear about our obligations and our responsibilities,
and we cannot simply take over things that were Government funded
without some very, very careful thought.
193. Although volunteers give their time for free,
the HLF suggested to us that the spending cuts issued by central
and local government would have an impact:
Cuts will hamper local regeneration and economic
development. Finally, if the organisational infrastructure for
managing and running activities stagnates, then opportunities
for the thousands of people who are enthusiastically involved
in heritage projects will be lost. Heritage volunteering, properly
managed and resourced, is hugely popular, with very strong, proven
benefits for the volunteer's own well-being, as well as for the
wider communities in which projects are based.
194. Volunteers cannot plug the skills gap left
by a reduction in the number of heritage professionals. Volunteers
play an incredibly valuable role in the heritage sector, but Government
must not be tempted to think that the success of the volunteer
sector can excuse reducing the number of skilled professionals.
195. It is important that the network of volunteers
is not damaged by the spending cuts. The Government is promoting
the idea of a "Big Society", and nowhere more can this
be seen in action, than in heritage volunteering. We recommend
that the Government does more to promote heritage volunteering
through schemes such as volunteering at work.
130 Ev 141 Back
Ev 141 Back
Heritage Lottery Fund and Visit Britain, Investing in success-
heritage and the UK tourism economy, March 2010 Back
Prime Minister's Speech at the Serpentine Gallery, 12th August
HC Deb 21 October 2010 col 60WS Back
Ev 150, 170, 175 Back
Q 324 Back
Ev 174 Back
Ev 175 Back
Letter to Dame Jenny Abramsky, Chair NHMF, from Jeremy Hunt 20
October 2010 Back
Q 300 Back
Ev 175 Back
Q 319 Back
Q 301 Back
Ev 170 Back
Ev 141 Back
Q 199 Back
Culture, Media and Sport Committee, Third Report of Session 2005-06,
Protecting and Preserving Heritage, HC 912-I, para 171 Back
Culture, Media and Sport Committee, Protecting and Preserving
Heritage, para 177 Back
Q 200 Back
Ev 171 Back
Written evidence from the Institute for Archaeologists [not printed] Back
Ev 172 Back
Ev 133 Back
Q 214 Back
Localism Bill [Bill 161 (2010-11)] Back
Written evidence from the Heritage Tourism Executive for the North
West [not printed] Back
Ev 134 Back
Q 330 Back
Q 330 Back
Q 331 Back
Culture, Media and Sport Committee Eleventh Report of Session
2007-08, Draft Herittage Protection Bill, HC 821 2007-08,
para 27 Back
"Government announces £6.2 billion of savings",
HM Treasury press release 04/10, 24 May 2010 Back
Q 205 Back
Q 205 Back
Q 317 Back
Q 412 Back
Q 318 Back
Q 204 Back
Ev 172 Back