Conclusions and recommendations
The costs of the Arts Council
1. The
fact that the Arts Council was able to make such significant reductions
in spending on its own administration while still functioning
well as an organisation indicates it was previously spending far
too much on itself. Its previous cuts will undoubtedly make it
harder to achieve a further saving of 50%, particularly given
the new responsibilities that the Arts Council is taking on. (Paragraph
31)
2. While the overall
budget cuts imposed on the Arts Council are severe, it must be
remembered that they occur in the context of the Government's
Comprehensive Spending Review which aims to reduce public spending
by £81 billion by 2015 and that other DCMS arm's length bodies
have had their budgets cut by up to 33%. We have to accept, therefore,
that the Arts Council should have to take at least a proportionate
share of the pain. (Paragraph 32)
National Portfolio funding programme
3. We
welcome the fact that the new National Portfolio is an open application
process, and that more flexible and tailor-made funding agreements
will be drawn up with arts organisations. However, because the
National Portfolio funding programme is open to all arts organisations,
it will inevitably attract more applications; and, if funding
agreements are to be more flexible and tailor-made, this process
will be a heavier administrative burden than previously. (Paragraph
42)
4. We remain concerned
at the speed with which the Arts Council is undertaking the massive
programme to assess all of the applications to the National Portfolio,
many of which come from organisations that were not on the previous
list of Regularly Funded Organisations. While we recognise the
desirability of giving organisations as much notice as possible,
the decisions taken will leave approaching half of those applying
disappointed. This is likely to result in some organisations having
to close and there will inevitably be complaints that the process
has been flawed and insufficiently rigorous. (Paragraph 43)
Arts Council funding decisions
5. We
agree with the emphasis the Arts Council has placed on financial
management and sustainability in its criteria for funding applications.
It is vital that public money is spent wisely, and this means
that arts organisations themselves have a responsibility to be
as efficient and financially sustainable as they can. We urge
the Arts Council to continue in its role of providing advocacy
and advice in this area to help arts organisations plan properly
and sustainably. (Paragraph 46)
6. The Arts Council
should encourage arts organisations to build on their core audiences,
but should not put pressure on them to relentlessly pursue people
who are not interested in the arts. (Paragraph 50)
7. Many arts bodies
have a small number of staff and limited resources and have to
apply for funding from a number of sources. The process of applying
for grants and subsidies is something of a necessary evil for
the arts sector and it is important that due process is followed.
We are concerned that the Arts Council is failing to support organisations
sufficiently in this process when it should be one of its highest
priorities to do so. (Paragraph 53)
The art supported by the Arts Council
8. The
role of the Arts Council is to distribute public funds to the
arts using its knowledge and expertise. Debates about the artistic
merit of individual arts projects, whether funded by the Arts
Council or not, are often subjective and it is not the role of
Parliament to comment on them. It is vital that the arm's length
principle, whereby the Arts Council operates independently of
Government, is upheld. However, it is equally important that
decisions by the Arts Council should not be perceived to be influenced
by its own political or artistic prejudices. (Paragraph 58)
9. The social and
economic benefits of the arts are not mutually exclusive from
artistic merit. Many of the arts organisations from which we have
heard provide valuable services while also producing good art.
Organisations that use art as a means to engage with young, excluded
or vulnerable groups may not be able to raise their own revenue,
and therefore may be dependent on subsidy. We welcome the Arts
Council's support of these arts projects, but this should not
take priority over the need to promote the widest range of art
forms based primarily on quality and future potential. (Paragraph
59)
The Public Gallery in West Bromwich
10. We
were disappointed at the inability of the Arts Council to address
key questions regarding The Public gallery in West Bromwich. The
Arts Council played a major role in a gross waste of public money
during its involvement in the West Bromwich project. Mistakes
have been made throughout and we were concerned at the inability
of the Chief Executive to provide answers to our questions and
the lack of any serious attempt to learn lessons or prevent a
repetition. We consider this to be a failure of leadership at
the Arts Council. It does not inspire confidence in the Arts Council.
We recommend that the Arts Council undertake, and publish, an
independent review of their role in the failure of the project.
(Paragraph 63)
The Arts Council Collection
11. The
Arts Council Collection is an important and valuable public asset.
We welcome the work it has done to make British works of art more
accessible to British people, and specifically commend their programme
of lending artworks to schools and hospitals, although this is
insufficiently well known. (Paragraph 71)
12. We recommend that
the Arts Council Collection should review its policy of never
selling any of its artworks. At a time when the Arts Council is
under serious financial pressures, strategic de-accessioning could
make the Collection more dynamic and financially sustainable,
as well as help fund the operation costs of increasing its loans.
(Paragraph 72)
13. The Arts Council
Collection is a very lean operation and we acknowledge that with
such limited resources it is not an easy task to get more of the
artwork out on loan. However, a public collection should be more
visible to the public. The Arts Council Collection is not as well
publicised as it should be, and this has resulted in a majority
of its works remaining in storage. We believe that the Collection
should aim to have at least 50% of its works out on loan at any
one time. We also recommend that a review of public art collections
is undertaken, with a view to amalgamating the Government and
British Council Art Collections with that of the Arts Council,
in order to achieve economies of scale, with a consequent renaming
of the Collection to reflect its public ownership. (Paragraph
73)
Local Authority funding
14. At
a time when the Arts Council is forced to make reductions in the
grants that it awards arts projects, if local authorities also
choose to make cuts to spending on the arts, this could prove
to be devastating for some arts organisations. We are encouraged
by what we have heard from some local authorities who value the
role arts and culture play in their local areas and who understand
the social and economic benefits that the arts can provide. However,
we are disturbed by the number of local authorities coming forward
proposing very substantial cuts, which inevitably will mean the
end for a number of local arts institutions and arts events. (Paragraph
83)
Arts in a cold climate
15. It
is inevitable that the combination of spending cuts from central
and local government will have a major impact on the arts sector.
The Arts Council is unable to fund the same number of projects
as it has previously and this will no doubt result in the loss
of some arts organisations, particularly if they have not made
alternative funding arrangements. (Paragraph 89)
Regional variations
16. Outside
London and the metropolitan areas, arts organisations find it
a lot harder to make their own money. It is vital that, even in
less densely populated parts of the country, people still have
access to cultural activities. It is all the more important in
this climate that the Arts Council take these factors into account
when selecting its National Portfolio and we urge it to continue
to do so in the future. (Paragraph 99)
Fixed costs
17. Although
the spending cuts will affect a wide range of arts organisations,
the larger bodies have more resources to cushion the blow. It
is the smaller arts projects which may only have a couple of members
of staff that are at most at risk. The speed at which the cuts
have been implemented has made it very difficult for these smaller
arts projects to look at other options, and it is of great concern
that so many of these organisations could be lost. (Paragraph
102)
What arts organisations can do for themselves
18. We
are not convinced of the need for so many subsidised orchestras,
whether by the Arts Council or the BBC. We recommend that the
Arts Council and the BBC work together to identify areas of duplication
and options for joint-working. (Paragraph 109)
19. More generally,
the different responses we received to the question of whether
arts organisations could work more closely with each other highlight
the diversity of organisations and working practices that exist
in this sector. Wherever savings and efficiencies can be made
by sharing resources and skills, this should be done. However,
we are mindful that there is not one solution that fits all.
Many smaller organisations do not have the resources to spend
time strategically restructuring or liaising with other bodies.
Therefore we recommend that the Arts Council makes it a criterion
for large organisations applying for the National Portfolio to
instigate programmes to share their knowledge and skills with
smaller arts bodies in the manner of successful programmes such
as Tate Plus. (Paragraph 110)
The UK Film Council
20. The
British film industry is good value for money; not just in terms
of the revenue it brings into the country, but also in its promotion
of the UK as a cultural centre and a tourist destination. However,
it is important for bodies that distribute public funds to keep
their own administration costs down and we have some sympathy
with the Government view that the UK Film Council has spent too
much on administration and wages. (Paragraph 125)
21. The abolition
of the UK Film Council was handled very badly by the Government.
We would not expect a decision with such significant implications
for the film industry to be sprung on the UK Film Council with
little discussion or consultation. It is extremely regrettable
that a film-maker of the stature of Tim Bevan has, as a result,
decided to take no further part in Government-sponsored initiatives.
It also appears that little or no thought had been given as to
who would take on its functions. The UK Film Council was originally
created because the Arts Council was felt to be doing a poor job
in supporting British film. We would therefore have been very
concerned if the initial suggestions that this task would revert
to the Arts Council had proved to be correct. We agree that the
British Film Institute is the best placed organisation to take
over the role of distributing film funding, although given the
reduction in its grant-in-aid this will not be an easy task. However,
we are encouraged by the latest statistics on the health of the
British film industry, and are confident that it will continue
to thrive. (Paragraph 126)
The Museums, Libraries and Archives Council
22. We
commend the work of the Museums Libraries and Archives Council,
as our predecessor Committee did in 2007, and do not see any persuasive
reason for the Government's decision to abolish it. (Paragraph
137)
23. We are concerned
that the Arts Council does not have the expertise or the resources
to carry on, adequately, the functions of the Museums, Libraries
and Archives Council. We welcome the Arts Council's commitment
to retain key MLA staff. However, given the reductions the Arts
Council is having to make in its own operating costs, it is unrealistic
to expect that the Arts Council can carry out the role as effectively
as the MLA. We recommend that the Government review the Arts Council's
museum and library functions and consults libraries and museums
in 2012. (Paragraph 138)
The Public Lending Right
24. We
are surprised at the Government's decision to abolish the PLR
body and disappointed that DCMS did not discuss the future of
the PLR with its Registrar before announcing its abolition. It
follows the same disturbing modus operandi as with the other bodies,
including the UK Film Council. We have not found anyone who supports
this decision. Any proposal that the Arts Council should take
over the PLR was unrealistic and rightly abandoned. However, this
has left the PLR in a state of protracted uncertainty, which could
have been avoided had the department discussed proposals with
the PLR sooner. (Paragraph 147)
25. We do not believe
that the British Library is an appropriate body to take on the
work of administering the PLR. Far more appropriate is the ALCS,
which already distributes royalty payments to authors. We understand
that there may be a legal technicality preventing this, in which
case we recommend that legislative measures are put in place to
allow it to happen as soon as possible. (Paragraph 148)
The importance of heritage
26. 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
Review. (Paragraph 157)
Spending cuts and safeguarding heritage
27. 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. (Paragraph 168)
The impact of spending cuts on heritage
28. 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. (Paragraph 173)
29. 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 funding settlements. (Paragraph 174)
Regional Development Agencies
30. 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 in capacity. (Paragraph 179)
31. 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 regeneration. (Paragraph 180)
Heritage expertise and local conservation officers
32. 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. (Paragraph 188)
33. 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. (Paragraph 189)
Heritage volunteering
34. 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. (Paragraph 194)
35. 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. (Paragraph 195)
Philanthropy and private investment in arts and
heritage
36. Arts
& Business largely represented good value for money, leveraging
£4 in investment for the arts for every £1 it received.
We are surprised and disappointed at the Arts Council's decision
to withdraw all funding from Arts & Business after 2012 and
are concerned that the Arts Council lacks the experience and enthusiasm
successfully to take on this role. (Paragraph 222)
37. It is not, and
should not be, the role of philanthropists to plug the gap left
by receding public subsidy of the arts and heritage. We have heard
a consensual response from arts organisations and philanthropists
that new private investment should be encouraged but should be
additional to, not a substitute for, public funding. It is also
unlikely that British philanthropy will ever resemble that in
America, for reasons of size and culture. (Paragraph 228)
38. There are limited
private investment opportunities for organisations outside London
and the metropolitan areas, and it is difficult for smaller organisations
to spend time and resources promoting themselves to potential
givers. However, there is a still lot of work that can be done
to increase levels of private giving to the arts and heritage.
The arts can learn from the work done by the National Trust in
raising a large number of small donations to fund specific projects.
(Paragraph 229)
39. It is a significant
omission from the Government's "philanthropy strategy"
that it suggests no reforms to the tax or gift-aid systems to
encourage contributions and we urge it to do so. (Paragraph 230)
40. Although most
philanthropists do not donate their wealth primarily for publicity
or recognition, there is still a need for greater incentives and
acknowledgement of their charitable activities. We therefore welcome
the launch of the Government and Arts Council's match-funding
initiative. (Paragraph 231)
41. We welcome the
use of the Prince of Wales Medal to recognise arts givers, but
we note that many of the recipients are major gift givers who
have already received honours. We recommend that both the Prince
of Wales Medal and the honours system be used more widely in acknowledging
philanthropists at all levels, and that the Arts Council be pro-active
in nominating more arts givers for honours. We also recommend
that local authorities instigate a form of local honours system
for philanthropists who invest in the arts and heritage of that
area. (Paragraph 232)
42. Despite the current
hostility of the economic climate for arts and heritage organisations,
their long-term funding and independence must remain a priority.
It is the mark of a civilised society that its citizens all have
access to arts, culture and heritage. A mixture of public and
private funding works in these sectors, although more can still
be done to raise more private money and to make public funds go
further. (Paragraph 233)
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