Written evidence submitted by the Society
of London Theatre and Theatrical Management Association (arts
193)
SUMMARY
— The performing arts play an important
part in the cultural, social and economic life of the UK. Indeed,
British culture in general and theatre in particular are the envy
of many other countries.
— Theatre in the UK brings real economic
benefit. The sector as a whole generates nearly £3 billion
pounds a year in economic activity.
— Although the theatre sector does not
expect to be immune from the impact of the current economic crisis,
state investment is essential to ensure access to high quality,
diverse theatre, opera and ballet.
— No doubt more can be done by arts organisations
to intensify their search for sponsorship and donations. But there
is a limit to what can realistically can be achieved over a short
time.
SOLT AND TMA
1. SOLT and its sister organisation, the
TMA, are the trade associations that represent theatre managers,
producers and owners across the UK at the large and middle scale.
2. Both organisations represent lyric as
well as dramatic theatre. Their members represent both commercial
and subsidised theatre.
IMPACT OF
SPENDING CUTS
3. It is difficult to respond to the first
issue raised by the Committee. At the present time, it is unclear
what precise cuts will be required of the DCMS; how those cuts
will be distributed between the Department itself and its various
Non Departmental Public Bodies. When it is known what cuts will
be imposed on Arts Council England and on equivalent organisations
in the devolved nations, they will need to consider carefully
how those cuts should be distributed across their theatre portfolios;
and within their theatre portfolios, they will need to decide
the outcome for individual organisations.
4. Having said that, the sector does not
realistically expect to be immune from the impact of the current
national economic crisis. Yet great care will be needed to ensure
that, so far as possible, the implementation of any cuts does
not undermine the core functions of those organisations that continue
to be in receipt of funding. In theatre "front line services"
are what happens on stage.
5. So far as the funding distributors are
concerned, SOLT and TMA are anxious that they should not take
the across the board approach to equal pain. Their decisions in
due course will need to be informed by the significance of their
current funding in relation to the total budgets of individual
organisations; by the extent of their reliance also on local authority
funding support; and by an assessment of their likely ability
to raise more funds from the private sector. The issue of local
authority funding is particularly important for regional theatres.
6. It is important to emphasise that theatre
punches well above its weight in economic terms. The annual economic
impact of theatre activity is some £3 billion, of which London
theatre accounts for £2 billion. In addition, ticket sales
alone account for some £80 million annually in VAT receipts.
This is more than half the total sum spent on theatre by governments
across the UK.
WORKING MORE
CLOSELY TOGETHER
7. Theatre organisations in both the subsidised
and commercial sectors already work very closely together, sharing
productions and their associated costs. In the last four years,
45 of the productions seen in commercially operated West End theatres
began their life in the subsidised sector. If this source of product
were to become significantly attenuated, the consequences would
be far-reaching. But it would be wrong to suggest that no more
extensive collaborations might be possible. We would expect subsidised
organisations to explore this option vigorously, both between
themselves and with commercial theatre interest.
THE NECESSARY
LEVEL OF
PUBLIC SUBSIDY
8. There is no formula for determining the
"right" level of public subsidy for the arts in the
UK. Traditionally, funders have tended to look to international
comparisons as offering some kind of benchmark. All such comparisons
in recent years have shown that central and local government expenditure
on the arts as a proportion of GDP is significantly higher in
the UK than in the US, but at he same time significantly lower
than in the more developed Western European countries.
9. Across Europe, both the total quantum
of subsidy and the proportion of arts organisations' income which
is attributable to government support are significantly higher
than has typically been the case in the UK. Whereas the larger
subsidised lyric and dramatic theatre producers in the UK tend
to receive about a third of their income in subsidy, in continental
Europe the figure is often as high as two-thirds or even four-fifths.
SYSTEM AND
STRUCTURE OF
FUNDING DISTRIBUTION
10. In both Scotland and Wales, the devolved
governments have recently made significant changes to funding
mechanisms in the arts. In England, the Arts Council has endured
a number of reorganisations over the last 10 to 15 years. Although
systems can always be improved, the most pressing need at this
time is for consolidation rather than further change.
11. SOLT and TMA are firmly of the view
that the arms length principle is important to the effective assessment
of individual organisations and of their need for financial support.
CHANGES IN
THE DISTRIBUTION
OF NATIONAL
LOTTERY FUNDS
12. The recent announcement of some increase
in the proportion of National Lottery funds to be made available
to the arts is welcome in itself. However, the increases are small
and are likely to pale into insignificance by comparison with
cuts in other budgets.
NATIONAL LOTTERY
POLICY GUIDELINES
13. In general, SOLT and TMA would like
to see lottery distributers in the arts given greater flexibility
over the uses to which National Lottery funding may be put. Such
flexibility could be particularly helpful at a time of cuts in
central government budgets, especially if Lottery funds can be
used to facilitate the transition of individual organisations
from the current level of public funding to a lower level.
THE ABOLITION
OF THE
UK FILM COUNCIL
AND MLAC
14. These are not matters on which it would
be appropriate for SOLT and TMA to comment.
THE LONG
TERM ROLE
OF BUSINESS
AND PHILANTHROPY
15. UK arts organisations already devote
significant resources to raising sponsorship and donations. They
have been doing this for 30 to 40 years, and in some cases longer.
Taken over all, the sector has been successful in this endeavour.
Having said that, however, some individual organisations find
it much more difficult to raise this kind of funding than others.
This may be because of their geographical location or because
of the nature of the work that they do. All subsidised organisations
will undoubtedly respond to cuts in their public funding by intensifying
their efforts to raise sponsorship and donations.
16. In this context, it is relevant to look
at the US where business and private philanthropy play a much
greater role in sustaining certain arts organisations. By and
large, US philanthropy has been much more heavily attracted by
lyric theatre than by dramatic theatre. One consequence of this
is that culturally significant dramatic theatre within the US
is largely confined to New York, Chicago, Los Angeles and San
Francisco. Across great swathes of the US, the only available
theatre is touring Broadway musicals. It is no doubt partly for
this reason that Broadway itself is very heavily dominated by
musicals. At the time of writing, there are no plays being performed
on Broadway.
INCENTIVES TO
ENCOURAGE PRIVATE
DONATIONS
17. If the government wishes the subsidised
sector to increase its income from private donations, it needs
to will some of the means as well as the ends. As things stand,
donors make a donation of a given sum, and it is for the recipient
charity to reclaim the tax. For high-rate taxpayers in particular,
the total impact of their donation is obscure. In the US, by contract,
donors deduct their donations from their gross income. Introducing
this system would have a major impact on people's willingness
to give large sums.
18. In this context, it is relevant to observe
that the US also offers a much more benign tax regime for investors
in commercial theatre than is the case in the US. Again, if the
UK system were amended along US lines, it would have a significant
impact on the ability of commercial producers to raise investment.
September 2010
| 
