Written evidence submitted by Salisbury
Playhouse (arts 120)
EXECUTIVE SUMMARY
— Public investment in the arts is extremely
small in relation to the overall public spending and has been
maintained for the past 15 years.
— These small amounts are proven to lever
significant private and commercial investment.
— The arts mixed economy ecology is lean,
fragile, complex and unique. Any removal of public spending will
have a significant negative effect on the sector and its repercussions
will be felt across the nation.
— The maintenance, and more importantly,
the inflationary increase of both central and local Government
funding for the arts is essential.
— Private funding cannot replace a shortfall
in public funding for the arts—they are mutually dependent.
— Organisations such as Salisbury Playhouse
service its local community and economy as much as it feeds in
to and supports the nation's theatrical output and must not be
seen in isolation, it is greater than the sum of its parts.
— Maintaining Arts Council England as an
independent public body for the distribution of public funds for
the arts is essential.
— Re-establishing the National Lottery
funds to their original level and purpose is welcomed.
1. Introduction
1.1 Salisbury Playhouse is one of Britain's
leading regional producing theatres based in the South West, with
a national reputation for home-grown work of the highest quality.
Our on-site facilities include a 517 seat main house auditorium,
149 seat studio, rehearsal room, community and education space,
set building workshop, scenery paint frame, prop making workshop
and store and costume making department and wardrobe. Outside
of the building the Playhouse delivers a comprehensive year round
participation and outreach programme which services Wiltshire
and beyond—in 2009-10 this programme engaged over 14,500
participants.
1.2 Our mission is to:
— create vibrant and original theatre;
— celebrate our national status as a leading
producing theatre;
— engage, inspire and entertain our whole
community;
— train and develop the nation's creative
talent; and
— maximise financial opportunities to deliver
our artistic ambitions.
Within an overall vision to produce "Theatre
Beyond Expectation".
1.3 In 2009-10 Salisbury Playhouse designed,
built, rehearsed and performed nine main house productions (253
individual performances)—including one world premiere and
one UK tour, five studio productions (90 individual performances)
and welcomed 25 visiting companies of national and international
repute—attracting 119,956 audience members.
1.4 Furthermore, in the last financial year
the Playhouse contributed £9.4 million to the local economy
through additional visitor spend and the use of local goods and
services.
1.5 Salisbury Playhouse is pleased to submit
evidence to this important inquiry as a long-standing recipient
of public funding from Government via Arts Council England, South
West. Public subsidy is an essential source of income for arts
organisations like ours and the inquiry raises some important
questions, the conclusions of which will have a significant impact
on the future health of the arts and heritage sector.
2. What impact recent, and future, spending
cuts from central and local Government will have on the arts and
heritage at a national and local level;
2.1 Due to 15 years of small* sustained
investment and the introduction of the National Lottery in 1994
the Arts in England are a huge success. The leverage from this
public money is currently at a national ratio of 1:2—for
every £1 invested in the arts, a further £2 is generated
from commercial and private sources.
— * Arts Council England's total budget
equates to 0.24% of the total DCMS budget. The arts budget for
the whole of Wiltshire is only 0.1% of the total council budget.
2.2 A reduction in the current public funding
base, locally and/or nationally will unravel all of the beneficial
effects and developments made by arts organisations over the past
15 years. It will be extremely quick to undo and will take many
years to rectify.
2.3 For many arts sectors, the relationship
between central and local Government funding is an essential component
towards a successful and balanced ecology.
2.4 The unique model which exists in the
UK between public funding and private and commercial support is
one in which the balance is mutually dependent. A reduction in
public funding on either a national or a local level will inevitably
create an income shortfall which the private and commercial sector
will struggle to restore.
2.5 As an inevitable consequence the range,
activity and output of arts organisations will reduce. However,
fixed running costs including overheads and salaries will, at
best, stay at their current level. And the arts sector as a whole
will cease to offer the current "value for money proposition"
expressed as a ratio of fixed costs to output that it does now.
2.6 Salisbury Playhouse is already a financially
lean organisation producing enormous return for very little investment.
Wiltshire recently went through a spending review (2007/08) when
forming to one council and froze funding to the arts—prior
to this £25,000 was cut from the Playhouse budget for three
consecutive years. During 2008-09 the Playhouse rigorously sought
extra funds and overhead savings (c.£200,000) in response
to the recession. Consequently, further spending cuts from central
and local Government would have a significant negative effect
on the Salisbury Playhouse and its operation.
3. What arts organisations can do to work
more closely together in order to reduce duplication of effort
and to make economies of scale
3.1 A network of smaller organisations would
benefit from sharing administrative services such as finance and
human resources. Digital resources could also create economies
of scale to reduce marketing and publicity costs.
3.2 Joint procurement policies for services—for
example, prior to Wiltshire merging as one council the Playhouse
benefitted from joining the Salisbury District Council buyers
group and reduced stationery bills.
3.3 Co-productions with other producing
theatres with subsequent UK tours will provide greater economies
of scale.
3.4 The creations of consortiums which can
share access services such as captioning equipment, sign language
and audio description.
3.5 City-wide ticketing networks—increasing
cross marketing opportunities and box office efficiency savings.
3.6 Larger building based organisations
offering space for smaller arts organisations to utilise reduces
overheads.
4. What level of public subsidy for the arts
and heritage is necessary and sustainable
4.1 Robust evidence suggests that the current
level of public subsidy with annual allowances for inflation are
necessary to retain the positive momentum of the last 15 years.
"Art is cheap for its rich returns, but it is not free"
(Polly Toynbee, The Guardian 28 July 2010), moreover the
arts are profitable. For 0.07% of the total public spending bill
(7p in every £1) West End theatre alone paid back £76
million in VAT, a 40% dividend—these are theatres which
rely on regional producing houses such as ours to take the risk
in finding their next Les Miserables, War Horse or Enron production
for the nation to be proud of and promote around the world. This
risk requires public funds, without it creativity will be lost
along with the skills and national pride (of the 187 Academy Award
nominations given to Britons in the last 30 years, 145 started
out and regularly performed at subsidised theatres, such as Salisbury
Playhouse).
4.2 Furthermore, the link between public
subsidy for the arts and commercial return is now proven. Public
subsidy for the arts plays a vital role in the evolution of talent
within the creative industries, which are an essential component
of the future competitiveness of British business and are acknowledged
as our best route out of recession ("It is actually in recessions
that people need art the most" Jeremy Hunt 14 January 2010).
Between 1997 and 2007, the creative economy grew faster than any
other sector, generating two million new jobs and £16.6 billion
in national exports.
4.3 To further support the sustainability
argument, the position of the arts and heritage sector as one
of the "crown jewels" of UK society foregrounds the
role of the sector as a prime lever for incoming tourism in the
UK. Arts and culture are central to tourism in the UK, worth £86
billion in 2007—3.7% of GDP—and directly employed
1.4 million people (David Cameron's speech on 12 August 2010 reiterated
that UK tourism was the most important business—rated third
in the world). Inbound tourism is a crucial earner of exports
for the UK economy, worth £16.3 billion to the UK economy
in 2008.
4.4 The Tipping Point for arts funding is
minimal. The difference between 15% and 25% cuts from the Arts
Council Budget is £45 million—this is a small sum to
the Government but significant to such a delicate industry. The
Salisbury Playhouse's scenario planning indicates that cuts above
10% to 15% over four years would be our Tipping Point at which
significant change would need to be considered.
5. Whether the current system, and structure,
of funding distribution is the right one
5.1 The Government's principle of "arms
length" funding requires a non departmental public body,
such as the Arts Council (a worldwide exemplar body for the distribution
of funds and industry expertise), in order to distribute public
subsidy to the arts sector without political influence. Therefore,
yes, the current system, and structure is the right one.
5.2 Funding from Arts Council England also
acts as an endorsement and indicator of high quality—it
is proven to lever partnership funding from the private sector
and philanthropic sources, particularly Trusts and Foundations.
6. What impact recent changes to the distribution
of National Lottery funds will have on arts and heritage organisations?
6.1 Reinstating the National Lottery funds
to their original level and purpose will have a positive effect
on arts and heritage organisations.
7. Whether the policy guidelines for National
Lottery funding need to be reviewed?
7.1 In the past there have been issues over
the restrictions governing the use of National Lottery funding
which in the past have inhibited strategies to combine Lottery
and Treasury funding in the most cost effective way. Policy guidelines
for National Lottery funding should be reviewed to ensure that
they are sufficiently flexible for its investment to work strategically,
effectively and flexibly alongside Treasury funding.
8. The impact of recent changes to DCMS arm's-length
bodies—in particular the abolition of the UK Film Council
and the Museums, Libraries and Archives Council;
8.1 The impact is currently unclear but
it is imperative the Arts Council is not expected to assume responsibility
for the work and activity of either the Film Council or the MLA.
9. Whether businesses and philanthropists
can play a long-term role in funding the arts at a national and
local level
9.1 They already do—the evidence of
the last 15 years confirms that small amounts of public money
work hard to stimulate a mixed economy culture that is internationally
acknowledged and which delivers a real return for the country
both in economic terms, and in terms of quality of life and the
cohesion of society and communities.
9.2 If public funding is significantly reduced,
the knock-on effect will be profound. Commercial and philanthropic
organisations will also be facing financial challenges, particularly
Trusts and Foundations which rely on the performance of large
capital funds as the means to support their grant giving to arts
organisations.
9.3 It is known that commercial and philanthropic
individuals and organisations will not fund public subsidy shortfalls,
they want to be associated with success—it is therefore
dangerous to assume that they would "plug the hole".
10. Whether there need to be more Government
incentives to encourage private donations
10.1 Reform the current HMRC Gift Aid scheme
to make it more user friendly for individual giving to the Arts.
10.2 Adopt the US model of tax incentives
to increase philanthropic giving.
September 2010
| 
