Written evidence submitted by Cornerhouse
(arts 41)
1. This submission is made on behalf of
Cornerhouse, Manchester's international centre for contemporary
visual arts and film, a leading UK cross artform venue. See www.cornerhouse.org.
2. Located in the heart of the city and
open seven days a week, we have 3 floors of contemporary art galleries,
three screens showing the best of independent cinema, a bar, café
and a bookshop. We also operate Cornerhouse Publications, an international
distribution service for contemporary visual arts books and catalogues.
We welcome over 500,000 visits per year to our building which
is open 260 days per year from 9am until after midnight.
3. An independent study, in March 2010 shows
just how much of an impact we are making, financially as well
as artistically, on a turnover of £2.2 million. Each year
we contribute an annual net expenditure of £6.2 million to
Greater Manchester's economy; or, for every £1 of Arts Council
funding we receive, we put over £7 back into the local economy.
What impact recent, and future, spending cuts
from central and local Government will have on the arts and heritage
at a national and local level:
4. The recent in-year cuts have made little
impact on the organisation. However, the proposed cut of 10% in
2011/2012 and further cuts in the following year could be disastrous.
A 10% cut in Arts Council England funding will be around £90,000
which on a turnover of £2.2m is in itself substantial. If
the there are reductions in local authority funding and funding
for film exhibition/education this figure will increase and become
more damaging taking the level of cut up to £150,000 in 2011-12.
With a total programming budget of £200,000 the impact will
clearly be significant. There will have to be reductions in activity
levels, staffing, opening hours and education activity.
5. Like many arts organisations Cornerhouse
looks very closely at costs and income generation. Following the
serious impact of the 2008 cash and recession on our fundraising
and suppliers we had to make major changes to our cost base and
operations in 2009. This resulted in 4.5 FTE redundancies, changes
to opening hours and price increases. We mention this to illustrate
that our organisation and many like us in the arts sector are
managed within very tight financial constraints and have no organisational
fat to cut. Cuts in funding will result in disproportionally large
cuts in service. This will then reduce the significant economic
impact our organisation generates.
6. A recent letter from leading arts organisations
in Manchester, see appendix 1, to the Secretary of State states:
"The simple fact is there is no room for
cuts of this scale. We already operate with much smaller teams
and far tighter budgets than other sectors, and very few organisations
have any reserves at all. The proposed cut in Arts Council and
MLA funding, cuts in local authority funding, cancellation of
regional development agency projects, reduction of funding to
the UK Film Council and higher education cuts will all have a
major effect on our ability to deliver public benefit, outreach
and education programmes, support for young talent and artistic
enjoyment and improved quality of life for audiences right across
the region".
7. The letter also says:
However, the level and phasing of the cuts proposed
will have a catastrophic impact on cultural production, creative
confidence, heritage and innovation for generations to come.
This is a view that we fully subscribe to.
What arts organisations can do to work more closely
together in order to reduce duplication of effort and to make
economies of scale:
8. In the regions there are undoubtedly
some small potential savings to be made by bringing arts organisations
together. However, most arts organisations already run on significant
levels of sweat-equity so the actual savings made are only ever
going to be marginal. Having been part of the development of arts
marketing consortia in the 1990's I know there is evidence that
collective work on audience development can increase attendances
but rarely reduces costs. The situation in London may be different
given the massing of product.
9. Cornerhouse has been working to develop
a new business model for the Web 2.0 world. An essay by Charles
Leadbeater entitled "The Art of With" is available on
our website (http://www.cornerhouse.org/resources/item.aspx?ID=53).
We are currently engaged in a five year action-based research
project investigating how we can work more collaboratively not
only with peers but audiences. Two years into the project we have
doubled our visitor numbers, improved financial performance and
crucially improved artistic quality. We can provide more information
if this is of interest.
What level of public subsidy for the arts and
heritage is necessary and sustainable
10. The level of public subsidy required
depends upon what the government wants to achieve.
11. There is an outdated and inaccurate view
that artists and arts organisations don't know how to run a business,
this is no so. Like any business sector there are managers and
sole traders who run their businesses well and some who don't.
(After what has happened in the banking sector arts organisations
can be proud of the financial management and perhaps leading cultural
managers should be seconded to banks to help them run their businesses
better!) Across the arts sector there are fantastic examples of
well run businesses that are focused on providing public value,
as opposed to share holders dividends. The people running them
will be have be working on rebalancing their business model away
from public subsidy. However, there are activities that need state
funding because the market cannot/will not support it, but which
the public value/is a public good. This is much of what we do.
If there is less state funding to go around we need to be maximising
the public benefit from the state aid that is there. Consequently,
there needs to be a re-prioritisation of funding. If an arts business
is not well run and does not provide good public value then as
a country we can no longer afford to fund them. Salami slicing
equal misery for all would be a disaster. To make any disinvestment
strategy work there needs to be some clarity about what the state
perceives as public value from the arts. Other than cutting the
deficit the current government is not at all clear on what they
consider to be public value.
Whether the current system, and structure, of
funding distribution is the right one
12. Arms length funding for the arts is
vital. I can't remember who it was but someone during the 1980's
era said something along the lines of "the trouble with artists
and arts organisations is that they bite the hand that feeds them",
well the problem for the state is this is our job. Artists ask
questions of society but when the hand of the state directly intervenes
then there is a problem.
13. However in considering the way funding
is distributed it is interesting to see how artists are working—much
more across media and platform. We have had a bureaucratic division
of funding systems that led to my organisation spending a lot
of time proving to ACE that arts funding was not being spent subsidising
cinema and at the same time as having to prove that film funding
was not subsidising art. Pointless. We have had a great relationship
with ACE over the years and their funding processes have got better
and more efficient. However, we believe the lack of a joined up
approach and, in particular, the artform divisions, across the
wider cultural sector, are restrictive and wasteful.
What impact recent changes to the distribution
of National Lottery funds will have on arts and heritage organisations
14. It is great to have Lottery funds available
for capital and one-off projects in larger amounts in the future.
However, Lottery money is only ever one-off. It cannot replace
Treasury support. It can lead to short termism and encouraging
organisations to lurch from short term project to short term project.
Whether the policy guidelines for National Lottery
funding need to be reviewed
15. Perhaps but not to enable the Treasury
to reduce its contribution, which is relatively small, to arts
funding. When John Major established the Lottery this was never
his intention and it would be the thin end of the wedge if the
small amount of Treasury funding was threatened.
The impact of recent changes to DCMS arm's-length
bodies—in particular the abolition of the UK Film Council
and the Museums, Libraries and Archives Council
16. As yet the impact is unclear. Our understanding
is that even though UK Film Council has been cut there is still
a commitment to film funding but through another mechanism. If
that is the case we will need to understand what that is before
commenting in detail.
Whether businesses and philanthropists can play
a long-term role in funding arts at a national and local level
17. It depends upon what is meant by long-term.
The UK lost the philanthropy habit in the early part of the last
century, it will take generations to rediscover it. It will be
even more difficult during an extended period of austerity. Whilst
there is some important philanthropic giving it is particularly
difficult outside of London. This is a view shared by colleagues
from across Greater Manchester:
We have noted your suggestion that philanthropy
can make up the gap left by a reduction in state funding. Unfortunately
the reality, particularly outside London, is that it will not,
especially without US style tax-breaks.
Furthermore, conversations with philanthropists
and sponsors who currently support have revealed that state support
for our work is fundamental to their giving/sponsorship. We currently
work hard with both philanthropists and sponsors to bring in additional
funding for our organisations. Since the recession this has become
much more difficult. Letter to Secretary of State, see appendix
1.
Whether there need to be more Government incentives
to encourage private donations
18. Yes, significant tax incentives would
be needed.
APPENDIX 1
OPEN LETTER FROM GREATER MANCHESTER BASED
ARTS ORGANISATIONS, TO SECRETARY OF STATE FOR CULTURE MEDIA AND
SPORT, RT HON JEREMY HUNT MP
Dear Secretary of State,
PROPOSED ARTS
CUTS
As leaders of arts organisations in Greater
Manchester, we understand that we have a public duty to protect
and nurture our nation's treasures and talent for the benefit
of the public, future generations and the economy. We are therefore
compelled to write to express our deep concern at the proposed
cuts to arts spending.
We agree that every one must play their part
in reducing the national debt, and we understand that this must
include the cultural sector. However, the level and phasing of
the cuts proposed will have a catastrophic impact on cultural
production, creative confidence, heritage and innovation for generations
to come.
As you know, as a proportion of national spending,
arts and cultural budgets are very small, less than 0.1% of the
total Government Budget, and the proposed cuts will cause disproportionate,
irreparable damage for a relatively tiny saving to the public
purse.
The arts matter—more people in Greater
Manchester and the wider North West region are enjoying them than
ever before. Cultural organisations are at the heart of our "Big
Society", the arts encourage participation, raise aspirations
and improve quality of life and opportunities for the young people
and disadvantaged communities who need them the most. They are
also the North West's economic success story. They develop talent
for the creative industries, which are fundamental to the future
competitiveness of British business, and provide a massive boost
to tourism and the visitor economy.
The simple fact is there is no room for cuts
of this scale. We already operate with much smaller teams and
far tighter budgets than other sectors, and very few organisations
have any reserves at all. The proposed cut in Arts Council and
MLA funding, cuts in local authority funding, cancellation of
regional development agency projects, reduction of funding to
the UK Film Council and higher education cuts will all have a
major effect on our ability to deliver public benefit, outreach
and education programmes, support for young talent and artistic
enjoyment and improved quality of life for audiences right across
the region.
We have noted your suggestion that philanthropy
can make up the gap left by a reduction in state funding. Unfortunately
the reality, particularly outside London, is that it will not,
especially without US style tax-breaks.
Furthermore, conversations with philanthropists
and sponsors who currently support have revealed that state support
for our work is fundamental to their giving/sponsorship. We currently
work hard with both philanthropists and sponsors to bring in additional
funding for our organisations. Since the recession this has become
much more difficult.
You have publicly declared your passion for
arts and culture so we believe that you would want to be remembered
for the protecting the nations cultural infrastructure.
We urge you to reconsider the level of cuts
proposed and invite you to Manchester to view for yourself the
great value for money and public benefit that we provide.
September 2010
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