Written evidence submitted by the Royal
Shakespeare Company (arts 25)
KEY POINTS
— Whilst the arts must share the burden
of cuts in government spending, they have a key role to play in
economic recovery through tourism, regional regeneration and feeding
the skills and expertise of the commercial sector—deep cuts
will affect this negatively.
— Any cuts should be implemented in a phased
way to allow organisations to prepare and seek alternative sources
of funding.
— Larger organisations have a responsibility
to share skills, expertise and resource with others in their sector
and to create partnerships across sectors to benefit audiences
and artists.
— Given the significant return for a relatively
small investment, we urge the government to maintain investment
to organisations directly producing art at a broadly similar level.
— We support the arms length principle
and can see benefits in a revised funding system which offers
both longer term partnerships and one-off flexible grants for
specific work.
— We look forward to restitution of lottery
funding to the arts, but we don't believe that philanthropy can
quickly or easily replace public funding and fill any shortfall.
— Creating a culture of giving is a long
term challenge and one that we support, but it needs to be matched
with new tax incentives to encourage giving.
1. Introduction
(a) The RSC is one of the world's best known
theatre companies. It's our job to connect people with Shakespeare
and produce bold, ambitious work with living writers, actors and
artists.
(b) In the last decade, we have given over 11,600
performances, commissioned 186 new plays and worked with 250,000
young people through our education programmes. We've taken over
£100m at the box office, sold 6.3 million tickets, earned
£16.4 million from commercial activities and generated £16
million in revenue from fundraising.
(c) We have also raised over £108 million
from public and private sources for the £112.8 million on-time
and on-budget transformation of our Stratford-upon-Avon home,
due to reopen in November 2010.
(d) Our annual contribution to the regional economy
is estimated at £58 million a year (source: PricewaterhouseCoopers)
and over 1000 full time equivalent jobs.
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
(a) Whist we don't yet know the final figure
for cuts to arts funding, it's clear that cuts on the scale proposed
(25-40%) will have real and significant impact for the arts and
for the audiences who enjoy them. Most likely for the us it will
mean fewer productions, less touring, and a curtailment of the
free events and educational activities which help us reach new
audiences.
(b) Arts funding is a tiny proportion of the
national budget (17p per week per person) and the return on investment
is enormous. For theatre alone, it's obvious that the investment
of the last decade, coupled with the entrepreneurial skill and
commercial professionalism of the sector, has delivered a "golden
age" for audiences, with all the national companies and many
smaller ones delivering outstanding work recognised across the
world and re-establishing the UK's position as a world cultural
leader.
(c) Whilst acknowledging that every area of public
life must play a part in reducing the country's deficit, we argue
that the cuts must be balanced and phased as the subsidised arts
can play a significant part in economic recovery. Our sector must
be strong enough to play its vital role in encouraging in-bound
tourism, boosting regional regeneration (each £1 of ACE investment
in the RSC helps generate £3 for the regional economy from
other sources) and feeding the skills and expertise of the commercial
sector—as Sam West has pointed out, 145 of the 187 British
Academy Award winners started their lives in the subsidised theatre.
The majority of productions in the West End begin as subsidised
shows.
(d) During the current year 2010-11, Arts Council
England (ACE) has been able to keep cuts to its regularly funded
organisations to 0.5%. The RSC has absorbed this cut through across
the board adjustments to departmental budgets. We have however
also seen a significant drop-off in educational investment through
cuts or abolition of Department for Education and DCMS funded
programmes such as Find Your Talent, resulting in a loss of £25,000
in income for projects and services that we had been commissioned
to provide. These range from an 18 month project with Looked After
Children to help raise their aspirations, to professional development
courses for English teachers cancelled by local authorities due
to budget cuts.
(e) It's clear that ACE funding also has a vital
role to play in leveraging other forms of public support, such
as local authority funding. The RSC doesn't receive any funding
from local authorities, but many smaller regional companies do
and it's an important part of the economic mix. We would be concerned
that ACE cutbacks have a domino effect, encouraging local authorities
to remove funding (especially as it's not a statutory obligation)
and potentially leading to the closure of regional theatres and
the loss of many non-building based theatre companies.
(f) We are also concerned about the timeframe
for implementing the cuts. Too much too soon could have a catastrophic
effect, as most organisations will find it extremely difficult
to secure alternative sources of funding or develop new commercial
models quickly. A longer timeframe allows organisations to plan
for and adapt to change—and would allow for the benefits
of the restitution of the arts element of the Lottery to be felt,
rather than facing a "cliff edge" in 2011 and 2012.
(g) For audiences—the most important part
of the picture—the cuts will inevitably mean less to enjoy
and less easy access. The arts are not just a "nice to have"
they are part of everyone's birthright and public investment in
institutions such as the RSC allows us to a run a repertoire,
reduce our ticket prices, offer free events, and provide £5
16-25 tickets, encouraging in audiences who may not otherwise
have access to the arts. For instance, the 400 schools in our
Learning and Performance Network,[8]
with whom we have deep and long-lasting relationships, are selected
precisely because they have a high proportion of children who
are entitled to free school meals and have little access to live
culture.
(h) We fear a return to a disproportionate domination
of the arts by artists and practitioners with private incomes
who can survive lean times, and by audiences who can afford higher
prices, and that this will lead to a narrowing of the field of
reference and decline.
3. What arts organisations can do to work
more closely together in order to reduce duplication of effort
and to make economies of scale
(a) There is clearly a responsibility amongst
the larger arts organisations to share skills, expertise and resource
with others in their sector. Along with many other perrforming
arts organisations, we put collaboration at the heart of our work.
(b) We regularly co-produce shows with some of
the best and most innovative small theatre companies in the UK,
for instance, Kneehigh, Filter and Little Angel Theatre, which
allows costs to be shared and income guaranteed for our partners.
(c) Our voice, text, movement practitioners already
work with drama schools and other groups to provide expertise
and training to artists, and are now extending this to amateur
companies, through a major new programme, part-funded by a charitable
foundation. Our RSC Studio provides resources to help established
artists develop new work, which might include rehearsal space,
actors' time, dramaturgy or access to technical expertise. We
make available our education building, Waterside Space, to local
amateur arts organisations for rehearsals and our reopening programme
includes work by local amateur companies.
(d) There are also benefits in sharing resource
more broadly with other sectors. For instance, we have joined
forces with other charitable and commercial businesses in the
region (Warwick Castle and the Shakespeare Birthplace Trust) to
promote UK and international tourism to the region and with Warwick
University to develop the teaching of Shakespeare and share practice
between theatre and academia, via the jointly run CAPITAL Centre.
(e) We could improve efficiencies by sharing
knowledge about the things we know work for our audiences, as
well as the things that go less well. We can often reinvent wheels
within the cultural sector because the opportunities to share
information with each other are not readily available. In September,
the RSC starts working with ROH, NT, Sage Gateshead, Tate Modern
and ACE to define and agree how we make sure our work with children
and young people is effective and of the highest quality and how
we agree a shared set of outcomes for our education work. This
kind of initiative will reduce the amount of time we all spend
on the needless collection of data we never use, and instead provide
us with a rigorous framework that streamlines measurement and
improves the experience for the young people, schools and families
who work with us.
4. What level of public subsidy for the arts
and heritage is necessary and sustainable
(a) Over the last decade or so, arts organisations
have worked very hard at reducing reliance on subsidies and broadened
their operations, stepping up commercial opportunities, seeking
sponsorships, and professionalising their fundraising. But subsidy
remains a crucial part of a mix for many, alongside box office
income, commercial operations such as catering and retail, corporate
sponsorship and charitable fundraising. It allows arts organisations
to broaden their programming and to reach new audiences. It keeps
ticket prices low and opens up cultural opportunities to lots
of people (especially young people) who wouldn't otherwise be
aware of them or feel they were available to them.
(b) We want every child to have a positive experience
of Shakespeare whilst at school, and without subsidy, our education
programme would have remained small and localised. We could not
have afforded our £5 ticket scheme, which has offered cheap
seats to 16-25 year olds since 2005.
(c) As stated above, the current model has delivered
great art over the last decade, brought work to new audiences
right across the country and has played a part in strengthening
British culture in all its guises and making our cultural institutions
the envy of the world. The return the public receives for taxpayer
investment is significant for a relatively small sum. We would
urge the government to maintain the level of investment at a broadly
similar sum during the coming years to organisations directly
producing art.
(d) Clearly, it's difficult to specify a precise
figure, but the right level must surely be one which continues
to deliver real value to the taxpayer, with that value regularly
reviewed and determined by a combination of professional judgement
on the part of those who administer the grants, the support of
audiences and approval from the broader tax-paying public.
(e) There has been extensive research into the
instrumental benefits the arts can bring, but little or none into
the value of art for arts' sake. We believe that there is an instrinsic
value in a Shakespeare play—that seeing it performed live
can remind us what it is to be human and can connect us to one
another in ways which simply cannot be achieved through other
means. It is, of course, almost impossible to quantify this in
monetary terms, but it is clearly something that the public values.
(f) A recent piece of research from the DCMS
Culture and Sport Evidence (CASE) programme,[9]
explores the value of public investment in the arts through quantifying
the impact of arts participation on well-being. The results of
the research look promising, but it is currently an under-developed
case. This kind of research could provide an important starting
point for understanding the intrinsic value of arts participation
on the individual and inform decisions about optimum levels of
public subsidy for the arts.
5. Whether the current system, and structure,
of funding distribution is the right one
(a) We remain supportive of the "arms-length"
principle, which allows Government to fund the arts at one remove,
without becoming enmeshed in specific questions of merit or suitability.
There is still value in a professional grant giving body, which
understands the sector and is able to take soundings from audiences
and artists to help determine its decisions.
(b) We are aware that ACE is reviewing its funding
operations at present and can see benefits in a revised system
which allows longer term partnerships with organisations, which
allows them to invest in artistic expertise and plan investment
over a period of years and which allows funding in a more opportunistic
way to support individual productions, artworks, or seasons. To
date, we have had a good relationship with ACE, working with good,
knowledgeable officers who have provided both challenge and support
in equal measure.
6. What impact recent changes to the distribution
of National Lottery funds will have on arts and heritage organisations;
and whether the policy guidelines for National Lottery funding
need to be reviewed
(a) Arts organisations have been adept at navigating
the various lottery distributors to secure much needed funds;
Awards for All, Heritage Lottery, Big Lottery, NESTA, the previous
Millennium Festival Fund and the now defunct New Opportunities
Fund were all available to arts-based projects for qualifying
projects. Redirection of lottery funding to the Olympic effort
and the narrowing of focus for other distributors has therefore
been a double whammy. Whilst we welcome the return of Lottery
funding to the arts after 2012—through what mechanism we
are not yet sure—we also hope that arts-based projects will
again qualify for funding from other lottery distributors to help
diversify and sustain our fundraised income. As the sector develops
a response to increasing expectations for "measurable outcomes"
and ways of demonstrating return on investment, we would hope
to compete well with health, education and community sectors for
lottery funds.
7. 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
We have no comment to make on these decisions.
8. Whether businesses and philanthropists
can play a long-term role in funding arts at a national and local
level
(a) Of course, both philanthropy and business
sponsorships have a role in funding the arts—and it's one
they already play very effectively, but they cannot quickly or
easily replace public investment.
(b) We are now in the seventh year of partnership
with Accenture, our Global Performance Partner, who have provided
both cash and consultancy in kind which has allowed us to transform
our business operations. Following their ground-breaking support
in helping us understand and segment our audiences, we have been
able to revolutionise our marketing activity, targeting it much
more effectively and resulting in significant sales increases.
Other commercial sponsorships have also delivered mutual benefits,
though our Stratford location does limit corporate hospitality
opportunities.
(c) We have a very significant donor base, and
have enjoyed private support for both our revenue funding and
our major capital appeal for the Transformation of our theatres
(£34.7 million raised in private fundraising for our Transformation,
including donations from over 13,000 people in 55 countries).
(d) However, the present economic climate is
such that we are running ever harder to stand still. Fundraising
across all types and at all levels of giving has been impacted
by the downturn and we have lost at least one major capital pledge
as a direct consequence. We are also having to adapt cash flow
expectations and invest more in relationships as donors need longer
to honour their pledges During the last two years we have only
been able to maintain our annual revenue fundraising rather than
grow it.
(e) Philanthropists themselves have made it clear
that their funding neither can nor should replace government subsidy—their
contributions allow enhancements and additions, and their resources
would not stretch to replace it. An over reliance on philanthropy
can also make organisations more dependent on short term planning
and vulnerable to changes in a philanthropist's circumstances
and wishes. It is notable that in the US, where the arts has a
much greater reliance on private sector funding, the downturn
has resulted in severe repercussions for the arts with a number
of high profile closures as philanthropists have been unable to
continue their levels of support.
(f) And finally, to grow these areas of funding
in the future, we do need to be able to give greater recognition
to those who give. Gifts are constrained by very restrictive rulings
(especially on the application of VAT) which limit the ways in
which people can be thanked before there is a tax liability. We
would welcome a major review on the tax incentives to give to
the arts and the Gift Aid Scheme.
(g) We also need to beware of adopting wholesale
systems of philanthropy from outside the UK where there are different
sets of expectations of what arts activities are there to achieve
for individuals and the wider community. In the US for example,
there is a strong focus on the Social Return on Investment Model—where
the organisation receiving funding needs to quantify in monetary
terms the level of social benefit that is being experienced by
the participant. UK cultural organisations are a way off being
able to provide this kind of evidence of impact and we should
question whether this very instrumental approach to arts participation
is something we want to encourage.
9. Whether there need to be more Government
incentives to encourage private donations
(a) Yes. There are three ways in which we would
like to see more incentives for private donations:
(i) new tax rules which permit lifetime giving;
(ii) more streamlined and simpler to apply gift
aid arrangements; and
(iii) greater opportunities to recognise gifts
without incurring tax liabilities.
(b) In reference to the US style of philanthropy,
which we are urged to mimic here in the UK, their cultural and
attitudinal context for giving is wholly different to our own.
It will take more than minor adjustments to tax legislation to
change a national mindset that the welfare state is there to help
those in need, and that philanthropy is a remote idea reserved
for the very wealthy. And, as demonstrated by a number of notable
cases in the past few years, if a wealthy individual feels their
own giving or role in British cultural life is being dismissed,
they will take themselves and their tax contribution out of the
country. The cultural shift required to make large scale philanthropy
the norm is a major one and will take considerable time to implement.
September 2010
8 The Learning and Performance Network is a three year
partnership programme between the RSC and 400 primary and secondary
schools across England. To date we have reached 76,000 children
and young people through the network and worked with over 1,300
teachers. Back
9
Understanding the impact of engagement in culture and sport;
July 2010. Back
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