Funding of the arts and heritage - Culture, Media and Sport Committee Contents

Written evidence submitted by Christopher Gordon and Peter Stark (arts 34)

1.  PREFACE AND EXECUTIVE SUMMARY

  1.1  We are grateful to the Chairman of the Committee for being willing to accept evidence at greater length than that indicated. As evidence of the increasingly global environment in which cultural policy operates, it has been co-written from desks on opposite sides of the planet.

  1.2  As the authors, we share a substantial background in cultural policy and management in the UK over four decades as senior professionals and as voluntary board members. We have worked for arts organisations large and small, for local authorities of all tiers and scales; as policy makers and funders; in research and teaching in Higher Education. As independent consultants, evaluators and advisers for the last 10 years we offer additional international perspective through having undertaken major projects encompassing Western and Eastern Europe and South Africa—in countries undergoing transition and reform even more radical than that currently envisaged in the UK. We also share the experience of having been members of the small advisory team on the arts funding system established in 1990 by the then Minister for the Arts, Richard Luce.

  1.3  The structure of our submission begins with the context in which the Committee is asking its questions, including reference to the achievements of government's investment in the arts since the Second World War and to those aspects of the current structures that seem to us to require reform or renewal in the light of rapidly changing circumstances. We conclude by offering some "pointers" to ways forward for both ongoing Treasury support and for the National Lottery. In a concise (six page) central section, we address each of the Committee's questions but with clear reference to the foregoing contextual analysis and our concluding proposals for the future. Our evidence is offered to be considered as a whole.

  1.4.  We should make it clear that while the Inquiry's "Arts and Heritage" subject is broad, our primary (though by no means exclusive) focus is on the "cultural" dimension of the Department's remit—the arts and heritage, film, museums and libraries. We will refer at relevant points to media and broadcasting, the creative industries, international relations and education. Although our primary focus is on England, the principles of increased devolution in this field are not questioned.

  1.5  While the sector as an engine of economic growth, social cohesion and civil participation is powerful, its ecology is complicated and in certain respects fragile. The necessity for a change agenda is clear. However, there is also a need for this process to be managed and implemented in a way that recognises that the impacts will be different in different parts of the country and in particular areas of specialism, calling for care and strategies that can take account of the varying circumstances, strengths and weaknesses.

  1.6  Our analysis of what has gone wrong is challenging, some of our proposals for the future are radical. We have consulted with highly experienced advisers and friends who share our passion that this opportunity for substantial change and reform is grasped—as previous opportunities have not been.

  1.7  We submit our evidence in our personal capacities and stand ready to be of further assistance to the Committee in its work.

  1.8  Above all of our other recommendations, we ask that the Committee do all in its power to encourage the Government to take the time needed to consider and make long overdue structural change in the inherited structure of Non Departmental Public Bodies (NDPBs).

  1.9  We believe that it should be either the Department itself or newly created or authoritatively reconfigured and reconfirmed (NDPBs) that make the funding choices for the next triennium that will form the foundation for the journey towards 2030, not the rump of existing structures or untried shotgun marriages.

  1.10  As an Executive Summary we would emphasise the following points of analysis of the immediate cultural policy context and pointers to the future. A diagrammatic representation of our policy analysis is at the end of our evidence (P.27)

1.11  What that has been achieved under current structures, must we protect?

— the renewal of the cultural patrimony;

— London is established as one of a very, very few unquestioned "Global" cities;

— a renewed "polycentric" England is emerging based on its major provincial cities;

— cultural diversity is increasingly recognised as a substantial national asset;

— high ethical standards have been maintained in cultural management;

— there is political and public recognition of the wide roles played in society and economy;

— the sector has substantially diversified its sources of income. It is more resilient; and

— local facilities for cultural activities are generally available "live and local".

1.12  What that has gone wrong within policy and structures, must we address?

— International responsibilities (and associated opportunities) not currently prioritised.

— National "Cultural" Policy leadership not resourced or provided.

— The loss—where it worked—of the English "regional" dimension in cultural programmes.

— Participation and Traditions massively undervalued as a bedrock of national cultural life.

— The hubris of the over-emphasis on "Cultural Leadership".

— Management cost and failure to deliver savings after substantial transitional costs.

— Extent and growth of differentials in pay and conditions between funders and the field.

— Substantial use of consultants in addition to core salary costs within the system???

1.13   We emphasise—aligned to the vision of The Big Society—the principle of subsidiarity:

— "Nothing should be done by a larger and more complex organization which can be done as well by a smaller and simpler organisation. In other words, any activity which can be performed by a more decentralised entity should be".

— This locates responsibility for the nation's core cultural infrastructure with national government.

— It locates responsibility for the "local" with families, neighbourhoods and communities and with the local authorities they elect.

— It leaves the middle ground—of responsibility for national infrastructure beyond the assets of the "global" capital city to be determined through dialogue at new structural "places" to be created in/with the provinces/cities/regions. NOT determined "top down".

  1.13  We argue for the development of structures at national and above local level that engage

with "culture" as a whole in the delivery of partnerships and service at local authority level and above.

  1.14  We argue for the re-creation where they have been lost of truly specialist arms length bodies able to offer the specialist services and knowledge that the sector requires from a nationally and internationally authoritative position.

  1.15  We suggest consideration of the widening of the statutory duty to provide Library services to a broader (though still well defined) set of cultural purposes and still within permissive powers and with an expectation of co-operation between authorities.

  1.16  We suggest the introduction—after 2012—of a single Distributing Agency for the Cultural beneficiaries of the National Lottery overseeing—at arms length—both delegated funds to the nations and to sub-national areas in England and to specialist sub-sectoral distributors.

  1.17  We argue for a greater focus within the Department for Culture media and Sport (DCMS) on policy research and on its international and interdepartmental roles with specific reference to education and skills, The Big Society (and its Bank), the creative industries and from the perspective of culture (and whether inter or intra departmentally) Tourism and Broadcasting.

2.  THE HISTORICAL CONTEXT

(a)   Before the current public funding infrastructure was in place

The word VALUE, it is to be observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called "value in use", the other "value in exchange". The things which have the greatest value in use have frequently little or no value in exchange: and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water; but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.

Adam Smith. The Wealth of Nations (1776)

  2.a.1 Enquiring whether the current system and structure for sustaining the arts and heritage is the "right" one can only be responsibly addressed in both a historical and a wider contemporary context, not least in the light of key Inquiry issues (such as specific recent reforms, the National Lottery and philanthropy) as well as broader current economic, social and creative concerns. The landscape framing observed by most NDPBs and by the metropolitan-centric UK "national" press and media is largely dominated by institutions and systems developed within a post-1945 Welfare State context. However, if one takes a longer historical perspective and projects ahead, this may seem more of a British exception than the rule.

  2.a.2 The existing cultural infrastructure of the UK is still, to a remarkable extent, the product of a combination of 19th century civic and philanthropic vision and enterprise, encouraged and enabled by Acts of Parliament (eg 1845 Museums Act, 1850 Public Libraries Act). This supplemented a small number of publicly accessible facilities in academic institutions (eg Fitzwilliam and Dulwich). Competitive pride in the great industrial, trading and commercial cities is at the heart of this. Much of it was prompted by Victorian middle class enthusiasm and paternalism, to provide cultural activities for themselves and their families, as well as to encourage the lower orders to spend any free time they might have on morally uplifting activities and to promote the greater social good.

  2.a.3 Donors of public halls and museums/art galleries (these rarely received largesse from the Crown or aristocracy) had a mixture of rationales. Altruism was not always the prevailing motive. Wealthy brewers, distillers and manufacturers with mayoral ambitions during the temperance era or tainted by former associations with slavery, for example, sought the aura of respectability conferred by the arts (consider the names of halls/galleries—Walker, Laing, Mappins, Usher, McEwen, Colston, Tate etc.). This was the age of Thomas Cook's "St Monday" Temperance Tours. Family time spent in museums in the company of one's social superiors was time not spent in drinking or in secret meetings to form trade unions and agitate for improved working conditions.

  2.a.4 Despite Reformation and Civil War damage to heritage, and constraints for many art forms from Puritanism, the tradition of a public sphere in culture in Britain has always owed more to "consensus"' as compared with the Continental "hegemonies" or ruling class. As a patron of the arts, the Church of England could never hold a candle to the Church of Rome. The 18th century "Enlightenment" inspired many citizen initiatives in our great cities to found learned and arts and manufacture-based societies, while The Philharmonic Society, which commissioned Beethoven's Ninth Symphony, is one of the oldest "new" music societies in the world.

  2.a.5 Even if Viscount Melbourne's laissez faire instincts led him, while PM in 1835, to have uttered "God help the Minister that meddles with art", it is remarkable that the founding principles of the British Museum bestowed by Parliament in 1753—"to allow visitors to address through objects, both ancient and more recent, questions of contemporary politics and international relations—are brilliantly alive and well in the museum's and the BBC's A History of the World in 100 Objects.

(b) The post-WW2 structures we have become used to

  2.a.6 Patterns of commercial provision and touring in the performing arts were inevitably affected by the advent of cinema, radio broadcasting and then television (with the arrival of independent commercial television in 1955 largely putting paid to the BBC as a paternalistic body). At the same time, certain large-scale and labour intensive art forms moved increasingly into "market failure". Perceptions of social and economic justice within the welfare state led to steadily increasing subsidy (although without any substantial effect on audience composition). The market mechanism of distribution operating through consumer sovereignty' was no longer to be regarded as the sole arbiter of value.

Activities that are good in themselves are good for the economy, and activities that are bad in themselves are bad for the economy. The only intelligible meaning of "benefit to the economy" is the contribution—direct or indirect—the activity makes to the welfare of ordinary citizens.

Studies that purport to measure the economic contribution of the arts|.point to the number of jobs created, and the ancillary activities needed to make the activities possible. They add up the incomes that result. Reporting the total with pride, the sponsors hope to persuade us not just that the arts make life better, but that they contribute to something called "the economy". The analogy illustrates the obvious fallacy. What the exercises measure is not the benefits of the activities they applaud, but their cost; and the value of an activity is not what it costs, but the amount by which its benefit exceeds its costs.

A good economist knows the true value of the arts. John Kay. 11 August 2010, Financial Times.

  2.a.7 The increasingly "mixed" cultural economy after 1945, with taxpayers as contributors, raised concerns about broader social, economic and geographic access. John Maynard Keynes thought that the Arts Council should act as a midwife, and then "wither away" in time. The current DCMS ministerial commitment to reform over a 20 period of realignment is thinking that is reminiscent of the planning framework that was inherited from the wartime Council for the Encouragement of Music and the Arts (CEMA) in 1946. CEMA was not originally intended to work in London but by the time of the first Treasury letter to the Arts Council of Great Britain (ACGB), it was plain that the principal aim of the new Council was to secure the Royal Opera House—the first of the "few but roses". The vision and advance work of a generation of radical planners (eg "Plans for an Arts Centre",1945) who fully understood both the value of the voluntary in society and the central importance of responsive local government was swiftly discarded. Keynes wrote to his Secretary-General, Mary Glasgow on 7 November 1945, "Who on earth foisted this rubbish on us?".

  2.a.8 Keynes' ambition was to "prime the pump of private spending" with the state as catalyst for a capital programme to create a national network to ensure that artistic performances could be given in properly constructed concert halls, opera houses and theatres. Subsidies to single companies would only be temporary devices, to be treated rather like research and development expenditure. The establishment and growth of "national companies" (which undertook little, if any, national touring) in the post-war period and the ACGB's unilateral closure of all its regional offices in England by 1956 led to ever greater disparity in levels of provision between the capital and the regions (further exacerbated through the replacement funding settlement for the arts and museums after the abolition of the GLC and metropolitan county councils in 1986).

  2.a.9 Jennie Lee's white paper A Policy for the Arts: the first steps (1965) gave encouragement to the growth of the voluntary Regional Arts Associations (addressing the vacuum left by ACGB's withdrawal), and the 1972 Local Government Act (Section 145) provided a codification of the permissive powers for all local authority tiers to act and cooperate in cultural provision and policy. The Arts Council's small capital "Housing the Arts" grants were strategically deployed to encourage the building of modern local theatres; public library provision embraced a wider cultural remit, and the Museums & Galleries Commission (MGC) established a registration scheme which led to an improvement of standards in local museums. The arrival of the National Lottery in 1993 transformed the possibilities for making good the gaps in provision throughout the country.

(c) A simplified Arts and Heritage timeline

Date	Event
1931	Standing Commission on Museums and Galleries established
1936	Workers' Educational Association (WEA) "Art for the People" touring exhibitions in operation Note BBC established 1933, British Film Institute (BFI) 1934, British Council 1936
1941	The Council for the Encouragement of Music and the Arts (CEMA) created.
1946	The Arts Council of Great Britain (ACGB) is established.
1951	A policy of "Few but Roses"
1956	ACGB closes regional offices inherited from CEMA. South West Arts created in response by local voluntary arts societies and music clubs. Gulbenkian Foundation commission `Help for the Arts' (The Bridges Report)
1961	North East Association for the Arts founded by Local Authorities and the Private Sector. The second Housing the Arts Report on "The Needs of the English Provinces"
1966	New funds for Experiment in the Arts after the white paper "A Policy for the Arts: the First Steps"
1971	ACGB closure of "New Activities Committee" Report "Training Arts Administrators"
1976	Lord Redcliffe Maud's report on the Arts in England and Wales (Gulbenkian Foundation) First ACGB Community Arts initiative—led by Marina Vaizey. Creation of the Association for Business Sponsorship of the Arts (ABSA)—in Bath
1981	Select Committee establishes Inquiry into "Public and Private Funding of the Arts" Research leading to "A Hard Fact to Swallow" points to the disparity in funding between London and the Regions (Policy Studies Institute)
1986	The Abolition of GLC and MCCs: the Arts protected through transitional/replacement funding MGC's museum registration scheme in development Museum charges imposed 1991 Conservative manifesto commitment to create the National Lottery
1996	Development of "Creative Industries" policies beyond "Cultural industries" definitions. Updated guidance and enhanced museum/gallery standards implemented 2001 Arts Council England (ACE) announces intention to absorb independent Regional Arts Boards. Final Creative Industries Task Force Mapping Document published.
2006	New Arts Council Structures "consolidated"
2011	New Policies and Structures in place targeting next 20 years

3.  THE CONTEMPORARY CONTEXT

(a) Global and European factors

  3.a.1 We register here our identification of a number of factors and issues that act as a backdrop to, and which will or might or ought to impact substantially on, the radical redefinition of cultural policies and structures in the UK. Despite the additional space granted to us by the Committee, we acknowledge our inability to engage with them adequately.

  3.a.2 Forging a new internationalism:

— Climate Change.

— The global recession.

— Digital connectivity.

— Growth in tourism.

— Attraction of Higher Education learners.

— Export of teaching and training skills.

— Mobility of skills.

— Growth in number and importance of festivals and "global events".

— "Soft power"—and making full use of the advantage of English language.

— The European Union's limited cultural "competence" and subsidiarity.

  3.a.3 Forging a new society:

— Culturally diverse new Europe and new Commonwealth.

— Changing family and leisure patterns and spending priorities.

— Transforming work time and locational patterns.

— Making new arrangements for education within emerging international, demographic, environmental and economic realities.

— A new structural unemployment (and the situation for young people in particular).

— Ageing but active "Third Age".

— Lengthier and increasingly dependent "Fourth Age".

  3.a.4 Facing up to a new economy:

— Decreasing sovereign debt.

— The critical importance of London as a global city.

— The need to enhance economic growth beyond London and the SE.

— Creativity and creative production of increasing importance within manufacturing and distribution.

— Greater emphasis on food, water and energy security.

— Culture and Heritage as a key determinant in tourism decisions.

— A successful "cultural and creative economy" is highly mixed and largely interdependent.

— The need for new international markets for UK production (importance of creativity in value chain).

(b)   Evaluating the status quo

(i) What that has been achieved must we protect?

  3.b.i.1 The cultural patrimony renewed:

— There has been a very substantial increase in the amount of work made by more artists across all disciplines, whether supported by the public sector or by the public through commercial operations.

— There are more and better managed organisations making that work available to a growing public at prices often only made affordable through public financial support.

— There are new museums making the heritage of mankind available and accessible to a growing public through maintained free admission policies.

— Heritage buildings, landscapes and collections better maintained, better understood and more visited.

— The visual arts have moved confidently beyond the gallery and into the public realm.

— The British media continue to produce some of the finest films, television and radio in the world.

— The World's Arts are more available to more people and more enjoyed "live" and digitally.

— The World's Arts are changing rapidly driven principally by technology and international connection and established "art form" divisions are in flux and/or breaking down.

— Over 50% of the UK population is involved in participation in an arts or crafts activity.

  3.b.i.2 London:

— An "alpha" Global City.

— Major cultural institutions and heritage infrastructure of fundamental importance.

— Such "major" institutions include the commercial/private as well as the publicly subsidised.

— An international centre for the creative industries.

— Thriving mixed economy for the performing arts and film.

— Private sector sponsorship makes a major contribution.

— Transformed reputation in the contemporary and commercial visual arts.

— Role of culture in the Olympic bid and programme.

— Huge and celebrated cultural diversity.

  3.b.i.3 A confidently "polycentric" England:

— Renewed confidence in the "great cities" and their city centres beyond the capital.

— As in their earlier heydays the arts and heritage are a defining part of those city centres.

— This, the greatest achievement of 65 years of public support through existing mechanisms?

— Cultural production now beginning to flourish outside the capital (In 20 years the NE has moved from describing itself as the "third home of the RSC" to having three shows on/off Broadway).

— Some of the most vigorous provincial cultural production is beginning to flourish in areas which are the most distant from London (eg Tyneside, Merseyside, Cornwall).

— It may be no coincidence that these places also have the highest levels of public cultural investment per head outside London and its hinterland (from all sources including the EU Structural Funds).

— There is evidence—within an overall trend still dominated by the move to London and the SE—of significant relocation of artists and other creative professionals in the opposite direction attracted by a lower cost and a higher quality of living.

— Plans for an enhanced high speed rail network including seaside towns could support this trend.

  3.b.i.4 Recognition—even celebration?—of Cultural Diversity:

— There is always more that can be done, but the richness in cultural life that flows from a more diverse population is now part of our national definition of ourselves. The arts Britain—no longer—ignores.

— There is a special case here in the importance of facilities for those communities that wish to maintain connection with the cultures of their countries of origin and to share that culture with their neighbours.

— Balancing the need for separation and integration (and the emergence of new hybrids) is one challenge. Maintaining access to performance and training of the highest standards is another.

  3.b.i.5 High ethical standards:

— It is a little commented upon phenomenon of public sector cultural management that it is characterised by very high ethical standards. The extremely rare exceptions prove the rule and a telling comparator is found in the complexities of vested interest in sports management and promotion.

  3.b.i.6 Recognition of a wider role for the arts:

— Although often over-claimed, the role of the sector in important dimensions of the economy—in such areas as tourism and urban and rural regeneration is now acknowledged. The specific role of the arts in the earliest creative phases of the value chain that drives the creative industries is now recognised.

— Definitive evidence for social outcomes and impacts from the engagement of the sector is still elusive, the accumulation of probabilities, particularly in relation to schools and health, is compelling.

— The rejection of the crude deployment of indicators and crude "instrumentalisation" by some NDPBs should not detract from these authentic connections much valued—and paid for from their own budgets—by many colleagues in their own professional work in other "mother" disciplines.

  3.b.i.7 Diversification of income:

— The income streams available to the arts and heritage—particularly to those organisations operating independently of government structures—have widened very substantially.

— This is in large part due to the development of engagement and partnerships with other areas of social and economic life where the arts and heritage can make an appropriate "instrumental" contribution to the goals of other professions.

— The funding of arts (and heritage) organisations is now a complex and interdependent ecology.

— Care will be needed—through the imminent funding reductions and changes to minimise the risk of unintended consequences.

1.  "Treasury"—direct 2.  "Treasury" via NDPBs 3.  European Union 4.  The National Lottery 5.  Philanthropy 6.  Trusts and Foundations 7.  Sponsorship 8.  Memberships and Friends 9.  Attached endowments 10.  Bequests and donations

11.  Covenanting/payroll giving 12.  Private Equity and capital investment 13.  Loans 14.  Rights payments 15.  Volunteering 16.  Nuclear and extended family support 17.  Local Authorities' cultural spend 18.  Education spending at all levels 19.  LAs' "neighbouring" budgets (Social, Regeneration, Tourism.

20.  "Distant" budgets (Prisons, Health) 21.  Regional Economic Development 22.  Job creation and training 23.  Universities and Higher Education 24.  Box Office, and cultural sales 25.  Ancillary trading—catering and retail 26.  Rents and space/equipment hire 27.  Touring, national and international

— The promotion—by Arts and Business—of the idea that the economy of (most) arts organisations is now characterised by 33% public sector, 33% earnings and 33% private sources is, at best, disingenuous.

— The importance of the National Lottery as a stream of funding additional to and, to a sensible degree, "independent" of, Treasury streams cannot be overstated. In some areas there has been creeping absorption and substitution. A redefinition of a proper separate if complementary purpose is needed.

  3.b.i.8 Facilities and activities that keep culture "live and local" and rooted:

— The "mass participation" approach pioneered and promoted by Sports NDPBs from their earliest years (always in partnership with the voluntary sector and Local Government) was not adopted in the Arts.

— The umbrella bodies for amateur, voluntary and youth participants in the arts were largely ignored (the NFMS an acknowledged exception), until the active support of the Carnegie UK Trust and the determination of Richard Luce enabled the creation of the Voluntary Arts Network.

— Thanks to the pioneering Arts Centre and Community Arts movements of the 1970s and 1980s new ways of combining participation, presentation, community development and education were developed (attracting international acclaim and interest). Expertise in the design of new spaces, programmes and events where professionals and amateurs can meet and work together has grown.

— Local Government (through the creation of over-arching Leisure and Recreation Departments) developed more comprehensive policies and, through innovative thinking in local library and community centre provision, made space and professional support increasingly available.

— The arts have shown themselves uniquely able to take over and adapt valuable and valued (and often listed) heritage buildings whose original functions have become redundant.

— The "mixed use" community cultural centre has its natural home beyond the "city centre" (home to more specialist facilities and organisations) in small towns, housing estates and in more rural areas.

— The Government's proposals for a redefinition of Library functions for the future may combine well with lessons learnt in these more widely programmed community spaces.

(ii) What that has gone wrong must we address?

  3.b.ii.1  International—responsibility and opportunity:

— While avoiding "stuffiness" we have slipped from promoting ourselves with dignity and pride to the excesses of Cool Britannia.

— The English have yet to learn a proper humility as "learners" in their relations with other cultures.

— We have not participated fully (sometimes not at all) in European and UN agency cultural policy debates and initiatives, even where our leadership is hoped for.

— The great advantage of our dominant language is also a huge disadvantage in our "avoidance" of the very significant cultural (and other) benefits of the multi-lingualism that is now the international norm.

  3.b.ii.2  National Policy Leadership:

— The concept of "culture" was only introduced into our national structures with the DCMS. Prior to that we had the "arts", "culture" was something other Europeans and "native peoples" had.

— Whether at this—new—level or in the old vertical structures there appears to have been an almost complete absence of the use of research as a basis for policy making. On the other hand good work has been done (for example "Taking Part") that will be able to provide sound benchmarks for the evaluation of programmes moving forward within the emerging overall policies of the Department.

— Major aspects of policy development have consequently tended to be left to Trusts and Foundations—Gulbenkian, Carnegie, Clore—or (more problematically) to ideologically focused "Think Tanks".

— The ambitions of the new administration for a radical re-alignment of the sector over 20 years and a consequent restructuring of NDPBs seems to mandate a clearer policy role for the Department, supported by a research base of its own (not subject to overt or covert advocacy agendas)

— In its national policy oversight role, the DCMS will have an increased inter-departmental role in relation to "cultural" education (including Creativity, Culture and Education [CCE) which is too broad to be located under ACE), skills training, the creative industries, international relations and the Lottery.

— Over-arching policy areas such as the impact of Climate Change, digital connectivity, cultural tourism, or an ageing demography might all be subjects best addressed above the "silo" level.

— We offer three—additional and more specific—cases for research and policy development:

—  The identification of the English language (The World's Words), in all its diversity of dialects, patois and creoles, as Great Britain's greatest cultural asset and our greatest cultural contribution to the world with its huge economic, as well as cultural, importance.

—  The persistent failure of too many cultural organisations to break out—or even seriously attempt to breakout—from the ABC1 domination of their visitor/audience/participant base when there are excellent examples of achievement available for study and adaptation.

—  The opportunities to connect creative production within the broadcasting and cultural sectors.

  3.b.ii.3  The loss—where it worked—of the "regional" dimension in cultural programmes:

— There are parts of the country where—for a mixture of historical, political, geographical and economic reasons—there is authentic cultural identification with an area beyond a local authority but smaller than the nation (London, Yorkshire, North East and South West are probably the clearest examples).

— Already properly recognised in London in the GLA and the government has offered to listen carefully to arguments from other regions' local support base—bottom up and from a range of sectors.

— The field of culture (including broadcasting) may be a particular case where what was lost through the imposition of a "one size fits all" national structural approach was authentic and greatly valued.

— Space should be left for "regions" to re-emerge in the cultural field, albeit transformed for the challenges of the next 20 years, where they are fully supported locally.

  3.b.ii.4  Participation and Traditions:

— The notion that an adequate national sports policy would focus only on élite athletes would clearly be nonsensical, yet in this other area of our shared potential as human beings and social animals such an approach has been routinely accepted.

— A subset of this attitude has been the particular disregard of English traditions (cf in marked contrast with the other UK nations and our own more recently arrived minority cultures) in crafts, music, dance, dialect, rituals, festivals, and metropolitan disdain shown for them.

— Over half the UK adult population is involved in the voluntary arts and crafts—activities undertaken for self-improvement, social networking and leisure, but not primarily for payment. A fundamental part of The Big Society, they should be valued and appropriately supported.

  3.b.ii.5  The hubris of "Cultural Leadership":

— In 1970, Professor Roy Shaw struggled to win the Arts Council's support for training a small number of "arts administrators" each year. The early years of the Clore Foundation's interest in the field focused on succession planning for a small number of the most senior posts nationally.

— Today we are spending millions of pounds on supporting the professional development of hundreds of "cultural leaders" and Higher Education offers courses to many more—whether in cultural leadership or management.

— This both feeds and reflects the massive growth in middle management posts in the public cultural sector—funders (national and local) and those funded by them. Even without the need for substantial economies, part of this growth seems hard to justify even before the imminent redundancy of posts.

  3.b.ii.6  Management cost and the growth of unacceptable differentials in pay:

— The pattern of salary scales in the arts (we restrict our observations here to the arts) before 2001 had Arts Council England staff engaged with reference to, or on, civil service contracts. Regional Arts Board (RAB) staff contracted with reference to Local Authority pay scales and conditions. The professional sector beyond that engaged differentially, with its sole benchmark being the available budget.

— A healthy arts management ecology relies on mobility between its sectors and, despite it always having been difficult for people to lose the advantages of externally negotiated pay and conditions, it did happen. (An entire generation of leaders of Regional Bodies and major arts organisations had early experience in the Arts Council as junior officers).

— Successive (five in twenty years) restructurings within the national and regional funding structures have incurred very substantial "once off" costs. Taken together those costs may actually exceed the total of the promoted (though very seldom, if ever, the achieved) year on year savings "anticipated".

— At each successive restructuring the case has been made for "increased responsibility" and mean average salary levels have increased with what appears to be both a pronounced "top end skew" alongside the "aggrandisement" of the Junior Officer "desk" function (now "Relationship Manager") whilst resources to allow such officers to maintain contact with work and organisations in the field have been reduced.

— With the absorption of the RABs into the "single unified national structure" from 2001, all of the newly and substantially expanded Arts Council England staff were contracted on the higher pay grades of the national body.

— At this point any possibility of mobility within the overall ecology of the arts almost completely disappeared.

  3.b.ii.7]... and conditions:

— Salary differentials have been observed and commented upon by the sector outwith the Arts Council.

— What is less well known and what has contributed perhaps even more to an unwillingness to leave the funder for the field (ie voluntarily) has been the conditions of employment available.

— Any due censure needs to be addressed to the policy makers who, whether knowingly or casually, allowed the differentials in pay and conditions to develop as they have.

— Reports suggest (and we apologise for any inaccuracies here—our research capability is severely limited in the time available) that conditions of service within the Arts Council include—albeit differentially across the grades—provision for:

—  substantial pension provision;

—  payments for the balance of contracts not completed;

—  lump sum severance payments; and

—  performance Bonuses.

  3.b.ii.8  ... and cost and "life after death":

— After restructuring and the "loss of posts", substantial doubts have been raised as to the extent of cost savings that any single restructuring has actually achieved within the core staff of the Arts Council.

— Beyond these questionable savings are the huge sums of money spent on consultants who have often appeared to be engaged to do work that was previously undertaken within the core.

— On some occasions the consultancies appear to have been awarded to previous—and sometimes very recently previous—employees.

— These statements are made with no implication of any wrong doing on the part of individuals. We point to an ongoing systemic problem and probable failure in responsible oversight.

(c) Summary

  3.c.1 Whilst acknowledging the key strategic and leadership role that NDPBs have played at times in the past there has been a consistent tendency to undervalue the key roles played by:

— artists themselves, (and their national and international networking);

— the organisations they have created (often with inspired managers and dedicated, loyal and unremunerated boards);

— local government;

— the private sector;

— relevant trusts and foundations;

— the voluntary sector;

— the BBC and other broadcasters;

  and by potent mixtures of all of the above when they have combined in a common purpose.

  3.c.2 There is much to be proud of in what has been achieved by successive national governments, responsible ministries, NDPB's, Local Government at all tiers, artists, boards, managers, sponsors, philanthropists, foundations and volunteers.

  3.c.3 We now turn to address the Committee's specific questions and then, in the final section of this report, we draw on this analysis and those answers to offer some pointers to a possible way forward.

4. POLICY AND LONG-TERM IMPLEMENTATION

(a) What level of public subsidy is necessary and sustainable?

"Public" subsidy?

  4.a.1 The economic ecology of the arts and heritage throughout the UK is now complex and mixed (as illustrated earlier). To a large degree, the private, public and voluntary are interdependent parts of the environment that sustains what has been achieved. We therefore need to bear in mind that reforms which address particular institutions, or mechanisms which were designed in a different era (or for purposes which may now seem obsolete or obsolescent) may also have resonances or connections with other policy and economic areas that do not come within the more closely defined remit of the DCMS.

"Are you really worth what you cost, or are you merely worthwhile? Are you truly able to accomplish anything that makes a difference, or are you simply an old habit?"

Independent USA enquiry into Museums and their prospects, 1995

  4.a.2 The wider interests of members of the Select Committee will doubtless establish this broader context in which the Inquiry's specific questions are posed and considered. It is reassuring that over the recent General Election campaign, all the major political parties—for the very first time—seemed to acknowledge the importance of the "creative industries" as a dynamic and rapidly growing sector of the UK economy. We must be careful not to confuse the defined DCMS remit with the totality of sources of public (let alone private or commercial) support and subsidy available to the arts and heritage. Great care will be needed to minimise the risk of unintended consequences.

  4.a.3 Recent Local Authority data suggests that 2007 was a high water mark in discretionary spending on culture that is now receding. The force majeure of the national approach to budgets at a local level could push a number of authorities to withdraw from non-statutory roles that have been protected and developed since the 1972 Local Government Act. New powers for local communities to "save" local facilities could well legitimise and accelerate this process. There is a substantial reported acceleration in the creation of "trust" structures for previously directly provided facilities (as has already happened in major cases such as Sheffield's museums and galleries). Grant aid to independent organisations—particularly substantial awards previously made under "partnership" agreements to joint clients with Arts Council—could be particularly vulnerable and these newly "independent" trusts will add to the pressure on national funds such as the Lottery.

Necessity?

  4.a.4 Natural heritage, the built heritage and collections of artefacts could be put on a minimum necessary maintenance base. No Performing Arts Company or gallery is, strictly, "necessary". Artists will continue to create, with those who work in forms that require substantial subsidy seeking to raise it privately or (far more likely) work abroad. People of all ages will sing, play instruments, paint, craft, dance, tell stories. They will find spaces to do so.

  4.a.5 But once the infrastructure built up over 65 years is lost it will be very difficult to resuscitate. Re-opening buildings (if they still happened to be available), re-skilling staff, re-finding audiences and markets and networks built up over many years will be an expensive and time-consuming business—and the project may fail.

  4.a.6 We next consider the "necessity of culture" in the 1982 UNESCO definition.

"...the whole complex of distinctive spiritual, material, intellectual and emotional features that characterize a society or social group. It includes not only arts and letters, but also modes of life, the fundamental rights of the human being, value systems, traditions and beliefs."

  4.a.7 In Maslow's Hierarchy of Human Needs (1943) we only encounter "culture" directly at levels 3, 4 and 5 of his celebrated pyramid. This highlight the importance (in ascending level) of family, self-esteem and confidence, creativity, problem solving, absence of prejudice and open-mindedness. Other commentators such as Anthony Storr, have claimed that creativity in its human origins may have been biologically adaptive. Whatever the truth here, there is no doubt that political judgement, at one of the darkest moments in our modern history was for the "necessity" for public funding of the arts in creating CEMA in 1941—both to give meaning to life under extreme wartime conditions and as a symbol of the revival of hope for a better world thereafter. Before that war, R G Collingwood had addressed "necessity" from a different perspective.

The artist must prophesy not in the sense that he foretells things to come, but in the sense that he tells his audience, at risk of their displeasure, the secrets of their own hearts. His business as an artist is to speak out, to make a clean breast. But what he has to utter is not, as the individualistic theory of art would have us think, his own secrets. As spokesman of his community, the secrets he must utter are theirs. The reason why they need him is that no community altogether knows its own heart; and by failing in this knowledge a community deceives itself on the one subject concerning which ignorance means death.

RG Collingwood's Principles of Art (1938):

  4.a.8 At the opposite extreme are "high" level of international treaty agreements. Under the 1948 Universal Declaration of Human Rights "Everyone has the right freely to participate in the cultural life of the community, and to enjoy the arts" (Article 27) implying some (unspecified) obligation on democratically elected governments in signatory countries to address issues of production, distribution and access for the whole population. It also obliges us to ensure the highest international standards at our 28 inscribed World Heritage Sites

Sustainable?

  4.a.9 Any attempt to define and achieve sustainability in this context would require an overall Government policy framework that authoritatively established a direction forward, and set objectives—and milestones to their achievement—over, say, a 20 year timeframe. At UK and national levels the extent of what is sustained will come down to political judgement as to what is affordable. Scotland, Wales and Northern Ireland will have their own opinions on this, but will also have views on reforms to systems in England which might have UK-wide knock-on implications. Beyond this, sustainability of the sector is massively dependent on the actions of others—partners in public cultural life—in local government, in broadcasting, in schools and Further and Higher Education. For the creative industries, BOP comments:

The danger is that while attempts to understand and develop polices for culture are fraught with peril, the alternative is arguably worse. Fragmenting public policy back into "the arts" (essentially subsidised and philanthropically-funded high culture) and the "digital and media sectors" (which are seen as businesses, and hence subject only to market regulation), goes against decades of trying to understand the complexity of cultural production. The case for cultural funding always rests on a variety of social, economic and cultural criteria. Nothing about the current situation changes that. If rebalancing the economy and achieving sustainable growth are the goals, and if we are to deal successfully with social challenges in this new age of austerity, a vibrant cultural and creative sector will be needed more than ever to help see us through

Burns Owen Partnership (BOP). "Five Policy Challenges to the Coalition" 2010.

(b) Is the current system and structure of funding distribution is the right one?

  4.b.1 Logic suggests that this is extremely unlikely to be the case. The system and structures in use today have evolved over many decades. It was only with the creation of the Department of National Heritage (now the DCMS) that there was a single structure that brought the "silos" together. Nor, has there been—until now—a commitment to a review with a starting point in responsibility for the cultural life of the whole nation. Such a review then reaches out from that base to the international community, to other government departments and tiers of government, to the constituent professional sectors and to the mass participation base and the audience for broadcast and recorded media that is at the heart of the everyday cultural life of the country.

  4.b.2 A cursory glance at the penetration of digital technology, and instant international connectivity, into the cultural as well as learning and social activities of children and young people and an examination of the forward plans of global cultural and media industries suggests that we should all be very wary of looking too far ahead with confidence. However, the suggestion that new structures might be established for the cultural sector that begin from somewhere closer to "where we are now" than where we were 60, 40 or 20 years ago seems a sensible proposition if government is attempting to kick-start a 20 year process of change.

  4.b.3 Similar scales of change will be driven by the Government's different approach within social policy (the Big Society) to the role of local government in relation to communities, neighbourhoods, schools and families. This new social policy environment will require adaptation in cultural organisations "on the ground" and change in the new NDPBs designed to support and fund them.

  4.b.4 In economic policy, the acceptance of the importance of the creative industries as a sector with substantial growth potential sits alongside the Prime Minister's challenge to the Tourism Industry to go for substantially higher targets. In both of these areas the arts and heritage, as well as the media/digital communication industries, play a huge role. Neither industrial sector (nor the technologies that make them possible) could have been imagined when most of the current structural elements of the system were conceived.

  4.b.5 Even if these historical, policy and technological imperatives for change were not present, the government's overall financial policy would necessitate structural change in the cultural NDPBs.

(c) Whether the policy guidelines for National Lottery funding need to be reviewed

  4.c.1 Comparative international research into the operation of state authorised lotteries for culture and good causes has a considerable amount to say about "additionality" and "substitution". In the UK there can be no dispute that the original 1993 "rules" agreed by Parliament when the Lottery was created have been eroded, with very considerable substitution having occurred.

  4.c.2 The Coalition Government's rapid increase in the percentages to the arts and heritage is welcome, as is Ministers' commitment to further restoration, after the London Olympics in 2012, of what has been lost. By then, after almost 20 years of almost exclusively positive experience in funding across the "good causes"' and in the light of the impending reforms to NDPBs, there may well be cause to return to the case (discussed during passage of the National Lottery Bill) for a single unified distribution agency—still operating at arm's length from government

  4.c.3 Later in our evidence we address the need for a new Lottery distribution structure for culture to be able to operate at both community level (through appropriate delegation there) and in highly specialist fields such as film, natural heritage, the preservation of objects, the composer, the art historian, the poet, the choreographer, the naval historian, etc. but to do so through the requisite diversity of specialist sub-structures, albeit operating within such a unified agency.

  4.c.4 We argue here for the reintroduction, where it has been lost, of the capacity for significant capital grants with the specific purpose of reducing long-term operating costs through innovative investment models and/or through environmental grants to improve energy efficiency.

(d) Could businesses and philanthropy play a long-term role in funding arts at a national and local level?

(e) Do there need to be more Government incentives to encourage private donations?

  4.d/e.1  Again, logic suggests that the answer to the first question must be, yes, and particularly so if a twenty year framework is used. In other economies that share large parts of our personal and business philosophies, they do.

  4.d/e.2  Others are more qualified that we are to address the detail but we draw attention to the critical importance of the most up to date evidence of what is happening to the broad base of private philanthropic donation and corporate sponsorship in other developed economies. We particularly cite the USA's experience—too often casually deployed. It appears that the model of the past decades is breaking down there as the recession's impact on private wealth intensifies and as corporate and foundation donors turn their attention to more pressing social and environmental goals, and to more clearly measurable outcomes.

  4.d/e.3  We also draw attention to issues of "national and local level" and the missing link between them Nationally, sponsorship of the arts and heritage has risen dramatically and those involved in promoting and supporting this growth are to be commended. Nonetheless, the bulk of that success (in terms of sums raised) has been in or near the capital city.

  4.d/e.4  Locally, where the vast bulk of sponsorships and donations occur (though each may be small—even tiny) there also appears to have been some growth. Sometimes this has been due to delegated local branch discretion, which could be further encouraged by government—perhaps through The Big Society Bank?.

  4.d/e.5  The "problem area" has been and will continue to be in persuading major sponsors and donors to consider projects and organisations outside the capital and the access to influence and the media available there. Any new or renewed agency that might continue to exist with the remit of encouraging growth in this area should specifically target this challenge—or even be provided with incentives to do so. The major organisations in the capital can now more than look after themselves in this regard.

  4.d/e.6  In addition to its targeted role at local level it is possible that The Big Society Bank could play a major role in this "intermediate" area in leveraging private sector and philanthropic investment in cultural projects with a strong social engagement, delivering direct and substantial benefit in localities but operating from a "multi-authority" or regional base.

  4.d/e.7  Again logic suggests a positive response but the evidence for the likelihood of success here is more mixed. Over the past forty years and more, a substantial number of incentive initiatives have been introduced but with only limited success (eg payroll giving, arts cards and vouchers, community foundations, localised sponsorship incentive schemes and planning gain).

  4.d/e.8  We are led to believe that that there is not as significant a variation between the USA and UK in relevant tax laws as is often claimed in ignorance. The main difference may be "cultural". One key significant difference is that the USA actively encourages "in life giving" (ie legacy donations are tax deductible to provide "in lieu cash", with higher rate benefits going 100% to the giver, not split with the institution concerned).

  4.d/e.9  It may take an intervention of this degree of boldness to achieve the scale of change targeted by ministers in the next two decades.

(f)   What can arts organisations do to work more closely together in order to reduce duplication of effort and to make economies of scale?

  4.f.1 Probably a great deal—although the consequent cost savings will vary hugely from organisation to organisation and many parts of the arts (particularly those with a heavy reliance on box office income) will need to maintain competitive as well as co-operative stances.

  4.f.2 Many areas of cultural life already operate through or with areas of mutual co-operation within which Libraries would be the oldest example. There is additional current significance through their uniquely—in culture—retaining a statutory responsibility (co-operation now further encouraged through the Government's pilot programmes recently announced recognising fundamental changes in reading habits and methods). The continuing decline in traditional (ie pre-cheaper books and the internet) public library services highlights a substantial capital and asset base that is gradually being adapted to other mixed uses for and by communities.

  4.f.3 Might consideration of the extension of the statutory duty in the field of libraries to a wider definition of cultural provision be worthy of examination?

  4.f.4 Museum life in some parts of the country (Merseyside, Sheffield and Tyne and Wear) was already operated through combined models even before "Renaissance in the Regions" which, where it has worked, seems to have worked extremely well. In other parts of the country reports are of continued substantial resistance to the transformation of Museums to a full address to the interest of a wide general public despite financial incentives.

  4.f.5 Again the assumption promulgated by some commentators that Arts Council England will take over functions from other NDPBs needs independent examination. Some of those other NDPBs have often operated through programmes and structures from which ACE has much to learn and sectors in other parts of the DCMS remit have been tackling issues of improved service on lower resources "head on" for a number of years.

  4.f.6 Outwith the DCMS purview are the arrangements between Local Authorities to share functions through Local Economic Partnerships and the maintenance of a "Regional" conversation and lightweight structures through Forums and other mechanisms that bring sectors together within boundaries that have functioned at least adequately for many years. People and sectors within those boundaries are used to talking to each other and to working together on joint projects (often in response to opportunities such as European funding)

  4.f.7 The same is true of (the largest or most prominent) cultural organisations in many parts of the country which have come together around issues of audience development, training and policy input to national and regional strategies. The financial reality of the next four years has already induced further conversations around shared back office functions and others—more radical—involving education and outreach work and partnership with smaller organisations.

  4.f.8 At a smaller, but highly productive, local level there may also need to be some public support to assist individuals or small-scale operators in the cultural field—say the crafts, or small scale publishing—to come together and co-operate (or network) on economies of scale to get what they produce into wider market circulation.

5. THE IMPACT OF CURRENT GOVERNMENT ACTIONS

(a) What impact recent and future spending cuts from central and local Government will have on the arts & heritage at a national and local level

(b) What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations;

(c) The impact of recent changes to the DCMS arm's-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council;

  5.a/b/c.1  Although moderate cuts in expected levels of resources can be a useful reality check for organisations in any field, forcing re-examination and often producing improved service for lower cost, reductions of the scale proposed are bound to result in loss of organisations, productions, employment, visitors and audience. That is acknowledged by government and, to a large extent, accepted by the sector.

  5.a/b/c.2  Such a realignment of public finances was clearly signalled during the recent General Election campaign. What the sector will look for is a fair process of decision making, a long-term vision that offers some light at the end of a dark tunnel and (probably new) national agencies/public bodies working with them and with the Department for that long-term rather than engaged in their own turf wars for survival and status.

  5.a/b/c.3  We see what has been announced so far as being only a part of the structural reforms and economies in national bureaucracies foreseen by Ministers (both since their time spent in Opposition and, now, by the DCMS itself). We would contend that, with good intelligence and good will, impacts can be lessened and the process of building anew for the future accelerated. Nevertheless, that will require a new agency or, in the short term, some new "agent" or catalyst to assist the debate and the definition of the new field.

  5.a/b/c.4  As we argue for radical change, we must therefore also argue for the necessary time to be taken after the announcement of the outcome of the comprehensive spending review to ensure that the changes are well thought through and likely to be an effective improvement.

  5.a/b/c.5  Clearly, existing NDPBs have the responsibility—with appropriate guidance—to make funding decisions on the reduced funds available for the transitional year of 2011-12.

  5.a/b/c.6  We believe that decisions taken for the triennium from 2012-13 must be arrived at by the new agencies, or NDPBs, or arrangements within the DCMS that will be responsible for the "Culture" remit as a whole and for each of its components (whether geographically and/or specialism based) during those years and looking beyond them, with government, through the lens of a 20 year vision to 2030.

  5.a/b/c.7  With such a methodology and timeframe for change in place, there is space and a "table" where the issues of real concern to cultural sub-sector specialists (such as some of those raised by the UK Film Council and bodies concerned with aspects of Natural Heritage) and the geographically-based groupings and funding partners can be properly addressed.

6. POINTERS TO THE FUTURE

(a) Introduction. Subsidiarity and "clearing the ground"

  6.a.1 In 1983 we observed Merseyside Conservative County Councillor John Last (at the time a member of the Arts Council) as he struggled in conversation with the then Minister for the Arts, Lord Gowrie, to compile a list of cultural organisations (arts and museums) outside the capital city that were unquestionably of "national importance" and, therefore, deserving of the same kind of "protected funding" as their sister organisations in London through the process of the abolition of the GLC and the Metropolitan County Councils. It was a very short list.

  6.a.2 In 2010 this is no longer the case. It can perhaps be argued that the greatest achievement of John Major's National Lottery, supplemented by Treasury funding such as the additional sums provided for theatre, and for museums through "Renaissance in the Regions", has been the transformation of the scale and quality of cultural organisations and their facilities for visitors, artists and audiences in the major cities outside London. This, in turn, has made possible the undoubted and celebrated role they have played in the economic and social regeneration of those cities. "Civic Pride" has been redefined as the pride that all citizens seem to have re-found in their City Centres.

  6.a.3 As argued earlier this is one of the really significant achievements of the arts funding system since the war that needs to be protected through the difficult bridging years of deficit elimination and restructuring. We begin by seeking to "clear the ground" for the debate by extracting the "global" and the "local". We use the important principle of subsidiarity as our guide.

  6.a.4 The principle of subsidiarity is a key tenet of Roman Catholic social policy thought. It holds that:

nothing should be done by a larger and more complex organization which can be done as well by a smaller and simpler organisation. In other words, any activity which can be performed by a more decentralised entity should be. The basis of good and sustainable policy is more likely to be bottom-up than top down.

  6.a.5 It is most usual in the UK to hear this doctrine applied as a defence of national sovereignty against encroachment by the European Union. We seek to apply it, as we believe the Coalition Government does, in thinking at and below the level of the nation state and in a context where the devolution debate has been resolved for the time being in Scotland and Wales (Northern Ireland is still something of a "special case"). We begin by seeking to "clear the ground" for the debate and proposing a new approach to the "conundrum" of London.

(b)   The special case of London as a Global City

  6.b.1 We suggest that the presence in London of a portfolio of the largest and most internationally important cultural organisations be treated as a supra-national phenomenon requiring address by National Government. The argument around "spend per head" in London and the English Regions (we have already set aside the smaller nations from the argument) has been bedeviled by the "case" of London's supporters for the "national" companies to be removed from the equation and contrary regional arguments that they should not be. ("A Hard Fact to Swallow", Policy Studies Institute).

  6.b.2 We propose that, in the emerging international competitive environment between nations, the importance to countries fortunate enough to possess one of the few truly global (capital) cities is now such that it deserves to be treated as a special case. If this were not so before the award of the Olympic Games to London, it is now.

  6.b.3 We also share and emphasise Lord Bragg's view that it should be the proper role of Capital Cities "to irrigate not drain" the nations they serve.

  6.b.4 The concentration of international cultural organisations necessarily located in such a city justifies a close relationship with National Government. Such a relationship may also be required to be direct rather than indirect as it is almost impossible in any country to construct a "Board or Council" with sufficient authority, above and beyond that possessed by those of the Institutions themselves, to evaluate, assess or determine funding allocations differentially between them. It can be argued that only National Ministers and Ministries can fulfill this function. It might be possible to add a very small number of cultural organisations to such a portfolio that are almost "accidentally" located outside the capital but still within its cultural hinterland.

  6.b.5 From this perspective there is no sufficient difference between The Tate Galleries and The Royal Opera House to justify their differential structural relationships to national government. Were such a portfolio of organisations to be "extracted" from the rest of the national debate it might also help to clarify the responsibility of the Greater London Assembly and the Mayor.

  6.b.6 The substantial reduction in DCMS staff need not be an obstacle to such a proposal. The largest cultural organisations are (by far) the easiest to fund responsibly. They can afford to employ excellent artistic leadership and management; they have the profile to attract excellent Boards; they have the history, asset base and inertia to be accepted as "there for the long term". They also have the greatest ability to attract other forms of funding, some never accessible to smaller organisations.

(c) The special case of the "truly local"

  6.c.1 Moving to the opposite end of the scale of cultural activity and organisation we are assisted by the clarity of the Prime Minister's advocacy of The Big Society which, to paraphrase, sees three strands of the Big Society agenda as highly relevant:

Social action.

  Government must foster and support a new culture of voluntarism, philanthropy, social action.

Public service reform.

  Get rid of the centralised bureaucracies that waste money, sap energy and undermine morale. Give professionals more freedom, and open up public services to new providers.

Community empowerment

  Create communities that are really capable of being in charge of their own destiny, and feel that if they club together and get involved they can shape the world around them;

  and three techniques to galvanise them:

Decentralisation.

  Push power away from central government to local government and drive it down further to communities, neighbourhoods and individuals;

Transparency.

  For people to play a bigger part in society, we need to give them the information to do so;

Providing finance.

  Paying public service providers by results. Government has a crucial role to play in connecting private capital to investment in social projects. A Big Society Bank to help finance social enterprises, charities and voluntary groups through intermediaries.

  6.c.2 Clearly, the government will intend these principles to apply in the field of local arts and cultural facilities, organisations and activities. They will also, it seems, accept that the answers will be different in different parts of the country. For Local Government the key issue will be one of resources within the competing themes of decentralisation and budget reduction. Just as in London—and as is proper within any system seeking a defensible base in the principles of subsidiarity- there will be robust debate (see later) as to precisely what belongs where, and between "in theory" and "in practice".

(i) The loss of "Regions" and the unreality of "Super Regions"

  6.d.i.1  The concept of "region", never in England a "political" reality, has been discarded. Government Offices in the Regions have been closed as have the RDAs. The North East of England Referendum decisively rejected the opportunity to pilot a regional tier of government, Regional Cultural Consortia were both created and closed down by the last government and it is difficult to see a justification for the "rump" of remaining regional structures in the cultural sector surviving the scale of reductions in staffing required by government's instructions on such costs.

  6.d.i.2  There is no cultural or economic case for the "supra regional" approach of "The Greater North" (Manchester is a longer journey from Newcastle than London) or, as an example, the Arts Council England grouping that brings Lincoln, Bournemouth and St Ives within the same "structure".

(ii) and yet...

  6.d.ii.1  England is still too large and diverse to be governed effectively and intelligently from Whitehall even if the new government was not committed to radical decentralisation of power downwards from national government departments and their NDPBs.

  6.d.ii.2  Equally, no single local authority, even the largest city, under present financial arrangements for local government is able to carry the financial responsibility for the cultural infrastructure of a far wider hinterland by itself. The current regional definitions will remain in place—albeit for a far smaller number of functions.

  6.d.ii.3  The acknowledged "over heating" of the economy in London and its growing hinterland that now stretches towards Bristol, Birmingham and Norwich, as well as absorbing the whole of the South and South East, provides a compelling argument for securing the attractiveness of England beyond that catchment zone for investment, and as a place to raise families and make futures.

  6.d.ii.4  In culture, the "special" status that we argue for public sector investment in London's international infrastructure will be seen as exacerbating this problem. The problem is compounded by the achievement of Arts & Business in building sponsorship within this area but its comparative failure to do so elsewhere in the country. 75% of all arts sponsorship nationally is made in London and the South East.

(iii) The cultural case for "clusters" based on the major cities outside London

  6.d.iii.1  Government has acknowledged the issues posed by London and its hinterland in general terms and proposed a number of measures which follow through on their commitment to subsidiarity in many areas. No one structural solution is to be applied. Different solutions can be found in different parts of the country.

  6.d.iii.2  Local Economic Partnerships are encouraged between local government and business. Where there is a strong consensus in favour of functions previously undertaken by the RDA continuing at a "supra-local" level that case is being listened to and in many areas of the country "regional forums of business and local government" are being created or maintained at that level. The 12 largest cities (it is a slightly strange list that includes Sunderland but excludes Newcastle) are to have (the opportunity to have) Mayors.

  6.d.iii.3  Co-operation between local authorities in the cultural sector in many areas of the country is already in place, driven by the desire to improve service and the need to find economies. That impetus is now being substantially encouraged to go further (eg the newly announced Libraries Strategy and the Prime Minister's Serpentine Gallery speech on Tourism and the need to find "natural" clusters where previous boundaries had proved too rigid or did not reflect reality).

  6.d.iii.4  In some cases where they have worked well, Regional Museums Hubs have been an outstanding success. The arts have lagged behind but, under the pressure of impending cuts, coalitions of larger organisations are forming, often including museums, film theatres and others of scale.

  6.d.iii.5  They become—effectively and potentially—the equivalent portfolio of nationally important large scale organisations in a particular area to that proposed for London. It may be significant that the combined scale of each of these "clusters" places them comfortably, as a group, in a similar category to the major national institutions in London. They will also share international ambitions and networks, and benchmark themselves against international standards. Each may be smaller in scale than their London based counterparts but, culturally, they can punch well above their weight.

  6.d.iii.5  These "cultural clusters" are most likely to be city based—whether within a single city or a small group of them. Nevertheless, they will serve (as does London) a wider hinterland from which visitors and audiences are drawn and with which they identify themselves for activities such as tourism promotion, marketing or training. These are also the natural groupings that are in discussion with each other around sharing costs and improving service in a time of reduced public financial support.

(e) Accepting and welcoming the debate.

  6.e.1 There will be vigorous debate within London between those organisations that will have a principal relationship with National Government, those that will relate principally to the Mayor and the GLA and those that will relate to the London Boroughs. Equally, within the London Boroughs and within Local Authorities throughout England, there will be debate about what organisations/activities continue to relate principally to Local Government and which will be addressed and resourced through the new structures enabled by the new emphasis on voluntary and community organisation.

  6.e.2 In the case of the "Clusters" of major cultural organisations that we propose throughout the country, we argue that their composition needs to be derived, through subsidiarity, as much from a "bottom up" process involving the organisations themselves and the local authorities representing the publics they principally serve as from the centralised decisions of the DCMS or its (current) NDPBs.

  6.e.3 Institutions such as those representing the Business and Voluntary sectors, the Media and Higher Education might also contribute to a consensus on cluster composition. There is an argument that if, after a number of decades of substantial public financial support, cultural organisations at this scale do not enjoy the support of their natural publics, then their continuity of funding should be in question. (We do not apply this argument to smaller, younger organisations, those specifically established to experiment or to individual artists' practice)

  6.e.4 At the beginning of a period of great change, we believe that these debates (around "status" and access to pools of resources that are seen to be larger or more secure) will be difficult but ultimately healthy. Informed instinct also suggests that, on the other side of the debate, a manageable number of "natural" clusters across the country and across museums, heritage and the arts is achievable (and will probably be largely though not exclusively based on existing "regional" groupings and boundaries) and that such a portfolio of clusters could sit comfortably alongside and within funding arrangements for the major National Institutions in London in an appropriately "balanced" national portfolio which would be nationally funded from Treasury sources across a number of years. (The same would be true within each at local authority area but how that debate will be managed is for local determination).

(f) Managing the process

  6.f.1 We suggest that the management of the process of debate and consensus building across all of the stakeholder groups involved and across the arts, museums and heritage might be a task for the the DCMS itself or for a time-limited "agency" or "Commission" appointed by the department or—if there is already an emerging decision on the future shape of cultural NDPBs—a "start up" task for those new or newly mandated structures.

  6.f.2 We do not believe that existing structures without renewed long-term mandates conceived in response to the challenges of the coming twenty years should have leading roles in this process or be empowered to take decisions that could effectively pre-determine or limit the outcome of the wider and more inclusive processes envisaged.

  6.f.3 It is reported that Arts Council England intends a process whereby arts organisations will be asked to apply or bid in January 2011 to be "located" in different parts of a redesigned funding structure which the Arts Council intends to operate from April 2012. It is again reported that decisions on this fundamental restructuring on an existing portfolio would be made by March 2011.

  6.f.4  We suggest that the Committee might consider such a process, precipitate and pre-emptive, and to presume an outcome to a debate on the best national structures for culture in the next twenty years that has yet to begin and which will need to involve many other major stakeholders critical to that future.

(g) National functions and a possible national structure

(i) Planning—positive and negative—some international references

  6.g.i.1  We are at the end of an era of big, centralised government, with a Culture Ministry that aspired to implement a broad UK national policy framework for the first time. That has led to NDPBs losing some of their presumed independence (and some of their innocence?) and, in certain cases, respect from their own client constituencies. This has been exacerbated in recent years, ironically perhaps, by a tendency in the larger NDPBs to continue to grow—in size, complexity and self-importance—alongside a failure to deliver on promises, especially with regard to cost cutting. The transition from DCMS framework guidance into strategy and planning, coupled with all the paraphernalia of the "audit society" ("evidence", targets, output indicators etc) has led to an unproductive quantity of bureaucracy and feelings of frustration.

  6.g.i.2  In the case of Arts Council England, the recent restructurings have made the—always difficult from the centre—dialogue and partnership with local government even more difficult and fragile. The Coalition Government's aspiration to remove many of these constraints, together with the opportunity post-2012 to refocus how Lottery distribution will be handled, provide an opportunity to formulate more transparent and empowering ways of energising, trusting and valuing artistic and local effort (individual, community and local authority) throughout the country.

  6.g.i.3  It is notable in both Western and Eastern Europe (in response to economic and social change in the one case, to the fall of the Berlin Wall in the other) that reforms to existing, and the creation of new post-socialist cultural policy systems have over the past 20 years borrowed considerably from UK models as did the new post-apartheid structures in South Africa. At the same time, aspects of UK public and private practice have been converging with continental examples. While Britain has in the past generally been more willing to acknowledge that it can learn more from the USA than from our European Union partners (particularly in respect of private and philanthropic practice), there are substantial lessons to be learned from comparison with, for example, the Netherlands, Sweden, Italy and France.

The Netherlands

  6.g.i.4  The Netherlands' government from the mid-1990s moved from providing across-the-board grant-aid to cultural organisations to a four-year contractual offer based on financial incentives. Cultural organisations were encouraged to become more independent financially and to develop their markets. They were called upon to cater for the needs of a new, young audience and to an increasing population of immigrants. In addition to the role of the state, private initiative and funding were welcomed and more actively encouraged. Nevertheless, the government still subscribes to the view that "the state should distance itself from value judgements in the arts and science."

France

  6.g.i.5  Although the statist French system is radically different from the British arm's length model, there are useful lessons to be drawn from it. Their "Paris problem" is probably even greater than our "London conundrum" and both houses of the French Parliament have, over the past 20 years, engaged seriously with a déconcentration of cultural policy and funding responsibility. Through the cooperative structures evolved between the Culture Ministry and other tiers of government, the arts and heritage now play a serious role in regional economic and social planning. This decentralisation is achieved through creating a network of cultural affairs professionals that collaborates with the regional and local authorities to draw up plans and funding contracts (that include start-up grants for the creative industries). The objectives of the policy are:

— to strengthen the infrastructure;

— to bring cultural activity closer to citizens; and

— to create new partnerships between the cultural and artistic institutions and professionals in the socio-educational sector.

  6.g.i.6  Binding seven year contracts for the funding and operation of cultural facilities and organisations can extend beyond the lifetime of any particular government, while the involvement of the Ministry of Culture ensures a responsible continuous inspectorate, supervisory and quality assurance role. City contracts define joint initiatives between different government ministries and the local authority to address specific issues, eg economic, social or urban problems. Both types of contract often include a cultural development dimension. The involvement of the Ministry (with a substantial and longstanding commitment to high quality research) also assists the quality of professional and public debate on policy issues.

The United Kingdom

  6.g.i.7  The UK was cited in a 2001 Council of Europe study as the prime example of the difficulty of achieving genuine cultural policy decentralisation within a unitary and majoritarian political system. Centralist control tendencies were seen as having prevailed and undermined intended processes of decentralisation in a rather opaque and anti-democratic way, while the constitutional lack of regional or local legislative competence curtailed decentralisation efforts, and even facilitated a centralist concentration of power through the devolution process (despite the political and managerial rhetoric implying the opposite).

  6.g.i.8  The new government has set itself the difficult task of reconciling the clarity of its overall policies with the commitment to be responsive to local initiative and to the views expressed by local authorities choosing to work together in areas beyond their individual competence but below the level at which the centre should properly be acting unilaterally. In the cultural field the new arrangements that are made for NDPBs beyond a much smaller DCMS will be the key to this achievement.

(ii) The challenge of "unity in diversity"

  6.g.ii.1  The differing specialist focus of the UK's NDPBs, coupled with the fact that the library service is the only statutory cultural function laid upon local government, has made it almost impossible to secure any sensible measure of coherence, comparability or quality assurance through the Department itself, let alone through and/or with its NDPBs. This problem exists in relation to both issues of relationship with the different parts of the country and between the different specialisms within the overall "cultural remit". In England, the extent of the structural separation of film was probably a mistake. In Creative Scotland there could be the equivalent risk of the isolation of museums and heritage.

  6.g.ii.2  The French system has the merits of coherence, comparability and a degree of transparency whilst seeming far too centralised for British application. The experience of the survival and development of the sector in the demanding environment of South Africa illustrates how much (and in some instances how little) can be achieved where structures and plans—where they exist—are substantially detached from both resources and reality in a 15 year old nation with eleven official languages and the same population as England spread across a land mass the size of France, Germany and Italy combined.

  6.g.ii.3  The residual question facing UK government here is, therefore, how to facilitate a "sufficient coherence" in national provision and oversight geographically and "culturally" without being too "directive" and allowing free rein to local variation and structural space for specialism at a time of substantial reduction in resources?

(iii) The challenge of achieving a secure agreement on a core national cultural

 infrastructure

  6.g.iii.1  We anticipate vigorous debate as to the nature and number and cost of the portfolio that will constitute any area's core infrastructure of cultural organisations for any given "contractual" period. There is also the challenge of the Government's desire for flexibility in the nature of the groupings of local authorities that will choose to work together and the need for national coverage.

  6.g.iii.2  Our experience suggests that this latter problem will be much more manageable in practice than in prospect outside the ongoing challenge of the expanding "South, South East and East" around London and longstanding questions surrounding issues such as historic Cumberland and Westmoreland or recent questions (as raised by the Prime Minister in his tourism speech about natural groupings such as `The Cotswolds')

(iv) The challenge of national funding for the local project

  6.g.iv.1  We have made the assumption that a National Treasury funding stream in culture will not be used to fund local activity. We see this challenge being addressed by cross sectoral Lottery funding and commend the simplicity and clarity of the model developed by the Heritage Lottery Fund (HLF) for this purpose.

  6.g.iv.2  Their budgets for sums up to £1 million are delegated on a per capita basis to the nine English Regional and three "Country" committees. Within these allocations, authority for decisions up to £50,000 rests with the relevant Director, above that (up to £1 million) with the committees. These regional committees also play a very significant role in advising HLF nationally on major grants.

  6.g.iv.3  We believe that this system is generally seen as "fair" as it provides regions with smaller budget allocations an equal opportunity to bid for larger grants into the substantial nationally retained sum. The perceived success is held to be rooted in objective and consistent case assessment and a high level of respect between committees and the HLF's Board of Trustees.

(v) The challenge of national funding for the specialist project

  6.g.v.1  As discussed earlier the professional and economic ecology of culture, heritage and the creative industries is complex. There is a real risk of rapid reform having unforeseen and negative long-term side-effects here. This is particularly true in the area of the funding of specialism (beyond institutions). Currently both Treasury and lottery streams are involved and NDPBs/Lottery distributors carry out both generalist (community benefit/ access) and specialist funding functions.

  6.g.v.2  Our suggestion—once the responsibility for the contractual funding of major cultural organisations is located elsewhere—is to return NDPBs to their original more "specialist" functions at arm's length from government; much smaller, more expert and informed by a judicious mixture of national (and international) peer group mechanisms and relevant local knowledge on a case by case basis.

  6.g.v.3  As an example, we would return Arts Council England to this heartland function of its most effective period of influence and able to draw fully on the expertise of the major organisations (now funded elsewhere and—probably—barred from application for additional projects to flexible funds). Support for individual artists and smaller projects (developmental, experimental etc) would be direct or via specific art form "agencies" working within service level agreements for specified periods of time. Such a role justifies and requires the "arm's length" and this focus would be in line with the conclusions of the critical Reports on ACE by Sir Brian McMaster and Baroness Mackintosh with their emphasis on artistic work and restoring lost confidence through peer group assessment.

  6.g.v.4  Similar "specialist" structures (whether entirely separate or sharing some back office functions) would apply in fields such as film investment, archives and heritage—natural, built and collected. Such structures might justify, and require, a mixture of Treasury and Lottery stream funding.

(iii) Summary

  Whilst there are of course numerous cases of connection between:

— specialist areas;

— each of them and the components of the national cultural organisation infrastructure;

— specialist areas and major cultural organizations and local and community activity;

  this broad "division of national labour" between:

— Cultural research policy and planning;

— Funding the national cultural organisational infrastructure;

— Funding local and community cultural activity;

— Funding specialist cultural functions;

  would serve the country and its cultural life better in the next 20 years than the structures we have become used to as they have evolved in the last 65.

THE AUTHORS

Christopher Gordon

  Christopher Gordon is an authority on, and evaluator of, European cultural policies. An independent arts consultant and trainer, formerly Chief Executive of the English Regional Arts Boards. Prior to that he was County Arts Officer for Hampshire, Senior Arts Officer at the London Borough of Camden, managed a London theatre, organised music festivals, and was a music officer at the Arts Council of Great Britain (running opera tours).

  He chaired the Council of Europe's evaluation of cultural policy in Latvia (1998), and wrote the Reports on Italy (1994-95) and Cyprus (2003-04); currently leading on their evaluation of Turkey. UNESCO in 2001 published his critical review of cultural policy evaluation processes. Treasurer of the European Forum for the Arts and Heritage for three years (1997-2000). Since becoming freelance in 2000, projects have included work for the European Cultural Foundation in the former Yugoslavia, the European Union (research into cultural policy/social inclusion and Parliamentary advice), UK regional government and the government of Dubai (2007).

  Christopher is a visiting professor at the University of Bologna, President of the Fondazione Fitzcarraldo (Turin) and of the Brussels-based Fondation Marcel Hicter's European Diploma in cultural management. He also teaches part-time at London City University. Locally, he has been on the University of Southampton's governing Council and a governor of Winchester School of Art, chairs the Hampshire Sculpture Trust, and is a member of Winchester Cathedral's Fabric Committee. Since 2009 a Trustee of the Park Lane Group, which promotes the careers of talented young musicians.

Peter Stark

  Peter Stark OBE is an internationally acknowledged expert in cultural policy research, cultural leadership and management and in the design of programmes and facilities addressing the role of the arts in economic and social regeneration whether at regional, city or community level. He has been based in South Africa since 2000 working principally in Inner City Johannesburg—working on the Newtown Cultural Precinct and for Wits University—and the Eastern Cape from where he now operates The Swallows Partnership/Sihlanganiswa Ziinkonjane linking that Province and North East England through the arts, museums, libraries and film. (www.theswallowspartnership.com )

  From 1984, as Director of Northern Arts, he initiated the policies that led to the Gateshead Quays developments and the culturally led transformation of his native Tyneside—including The Gateshead Millennium Bridge, the Baltic Visual Arts Centre and The Sage Gateshead during the design and development of which he served as Special Projects Adviser to Gateshead Council. His earlier career was in experimental and community arts—serving on numerous Arts Council Committees in the late 1960s and 70s—as a cultural management teacher and as founding Director of both South Hill Park Community Arts Centre in Bracknell and the Voluntary Arts Network.

  Peter was awarded the OBE in 1990 for his work at Northern Arts and a Chair at Northumbria University in 2000. He was made an Honorary Professor of Cultural Policy and Management at Nelson Mandela Metropolitan University in 2008.

GLOSSARY

A&B	Arts and Business
ABSA	Association for Business Sponsorship in the Arts
ACGB	Arts Council of Great Britain
ACE	Arts Council England
CEMA	Council for the Encouragement of Music and the Arts
EH	English Heritage
EU	European Union
GLA	Greater London Authority
GLC	Greater London Council
HLF	Heritage Lottery Fund
IPR	Intellectual property rights
LAs	Local authorities
LEP	Local economic partnership
MCCs	Metropolitan county councils
NDPBs	non-departmental public bodies
NFMS	National Federation of Music Societies (now rebranded "Making Music")
NHMF	National Heritage Memorial Fund
RDA	Regional Development Agency
RSC	Royal Shakespeare Company
WEA	Workers' Educational Association
September 2010

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Prepared 30 March 2011