Written evidence submitted by Wiltshire
Music Centre Trust Ltd (arts 57)
1. SHORT SUMMARY
OF THE
TRUST'S
RESPONSE
— Our response focuses on the arts rather
than heritage as our experience and expertise is in the arts.
— The arts in England operate very cost
effectively and make very modest demands on public funding.
— Yet the UK has world-class arts and artists;
a sector that gives Britain an international edge as a dynamic
place to live, work and do business.
— The arts in the UK are a UK-wide international
success story thanks to 15 years of sustained investment and lottery
funding.
— The arts fuel the creative industries
and help generate future jobs in one of the fastest growing parts
of the economy.
— The cultural sector has a proven track
record of regenerating towns and cities and contributing to a
cohesive and engaged society.
— Sustained support of the arts will allow
them to play a vital role in Britain's economic recovery.
— The arts are central to a government
that places a healthy society at the heart of its agenda.
— Any cut to the arts will have a disproportionate
effect for a relatively tiny saving to the public purse.
— The financial climate is tough, but the
arts remain a compelling case for public investment.
— The arts are valued, they really matter,
they are essential to our quality of life.
— The arts broaden horizons, stimulate
new thinking, provide pleasure and raise aspirations—they
inspire and sustain the spirit. More people are enjoying the arts
than ever before (76% in 2008-09).
— The considerable benefits the arts can
bring in other areas—social, economic, and to general well
being—begin with the quality of the art itself. And this
country has invested in artistic excellence for the long term.
2. What impact recent, and future, spending
cuts from central and local Government will have on the arts and
heritage at a national and local level:
2.1 The arts in England operate very cost
effectively—in most arts organisations there's little if
any fat to trim. Collectively the arts are not a large burden
on the public purse, they operate on a mixed economy. Public investment,
though relatively modest, is nevertheless vital because it underpins
all other income streams.
2.2 The impact of the cuts and where they
will fall are not yet clearly known. We are planning as advised
for a cut of at least 10% for 2011-12. We know that cuts over
the three subsequent years to March 2015 are expected to total
up to 30%. If applied on an equal-misery-for-all basis, it seems
highly likely that some arts organisations would have to close.
We imagine therefore that ACE will want to apply what funding
there is strategically and selectively. These funding decisions
will be known by March 2011 and will need to be managed with considerable
care and attention to detail.
2.3 What we can say for certain is that
government cuts to the arts will yield only tiny savings in public
expenditure. Total public arts funding through Arts Council England
represents only 0.08% of the Government's overall budget. A 30%
cut in this expenditure is less than 0.025% of the total annual
budget and less than one thousandth of the structural deficit.
2.4 Many very successful arts organisations,
such as the Wiltshire Music Centre Trust, operate at the very
boundaries of viability. After 10 very successful years growing
the Centre's work, and with an annual turnover now in excess of
half a million, we had an accumulated trading surplus last year
of just £344. This gives an insight into how a very successful
small-scale regional arts lottery project, doing cutting edge
education work, sits literally on a knife-edge of viability. The
Trust's Arts Council grant represents just 20% of its annual income.
We achieve leverage of 4:1.
2.5 While the contribution that the arts
can make to the budget deficit is minute, the impact on other
aspects of arts income risks de-stabilising the arts infrastructure
and causing irreparable damage. If cuts to its public funding
were severe enough to destabilise the Wiltshire Music Centre Trust,
the collateral damage would be the remaining 80% of our income
(over 60% of which is earned and self-generated) and of course
100% of our work. The people and small businesses whose work depends
on a thriving Music Centre would be adversely affected: musicians,
project leaders and teachers, technicians, maintenance staff,
designers, printers, builders, our suppliers, insurers, outsourced
H&S and HR guidance, legal advisers and accountants etc.,
etc. Ancillary businesses would also be impacted, the restaurants,
hotels, B&Bs and local shops etc. that our artists and audiences
use. With no public funding there would be a loss of economic
activity and vitality but no net gain either to economic prosperity
or as improvement to the structural deficit.
2.6 The impact on our own work would be
no less severe. We deliver an exciting range of charitable education
work, engaging with around 4,000 young people and some 80 schools
and approx. 20 community groups this year, plus 100 public concerts.
This outreach work would disappear and the quality of life in
the communities would suffer. The impact on educational targets,
social cohesion, sense of cultural identity and local pride could
compound this damage. Local communities would suffer a loss in
quality of life, volunteering opportunities for older people and
work experience opportunities for young people would disappear,
as would outreach work with the elderly and disabled, with minority
groups, children at risk, school refusers, young offenders and
other vulnerable people. We have over 100 volunteers to help us
manage this work and a small 10 strong team of staff to sustain
this programme. By no yardstick are we a lavishly resourced organisation,
yet despite starting with literally almost nothing in the bank,
we have never once had an overdraft.
2.7 From a business point of view there
is a point at which the operating models of many such arts organisations
will have to be radically reappraised, and some will not have
that option. There is a tipping point of 10-15% for most arts
organisations. Cuts of the magnitude proposed will have a real
impact on the frontline and cost far more than the extremely small
sums they save government overall. This is because cuts in local
authority funding, a reduction in private sector support and escalating
running costs threaten to create the "perfect storm"
for many successful organisations who operate close to the edge
of viability on the mixed economy model.
2.8 Any cuts need to be spread intelligently
over four years so that they can be managed in the best way. Any
dramatic cut in funding in 2011-12 will hit organisations hardest
in the Olympics year and it would take many years to recover
3. What arts organisations can do to work
more closely together in order to reduce duplication of effort
and to make economies of scale:
3.1 The UK is among the world leaders in
terms of the quality of much of its arts practice and, thanks
to arts lottery funding, it now has more first rate, modern arts
facilities. Yet the level of public funding per head of population
for the arts in this country remains low compared to many other
developed economies. At the same time there isn't the philanthropic
tradition or potential that there is in the USA, nor the degree
of civic and state pride in cultural activity found in most Western
European countries. The arts in the UK have learned to manage
on relatively little subsidy and, with few exceptions, are already
run on a very lean and cost effective basis. They are already
finding new approaches to arts funding and partnerships, collaboration
and delivery and thinking differently within this changing context.
3.2 In Wiltshire we're not aware of much
if any duplication of effort. There are already good networking
forums and lots of collaboration—most of the Centre's education
work is delivered in partnership. Wiltshire's local authorities
have long taken a low rate, low spend approach. Rather than competing
with each other, arts organisations in Wiltshire work together
to make the most of what opportunities there are. This gives added
value, extends the benefit and makes the work more sustainable.
There are good anti-clash mechanisms too, so that we minimise
the risk of splitting audiences. Together we work to ensure that
what public funds are available for the arts in Wiltshire are
used in the most cost effective way to deliver the greatest public
value.
3.3 Nevertheless, building on the willingness
to share intelligence and learn from each other, there may be
scope for further collaboration, perhaps joint commissioning of
work and procurement of goods and services to achieve economies
of scale and greater purchasing and bargaining power. These ideas
are gaining currency.
3.4 Organisations seeking to grow their
outreach work could share a project coordinator rather than engage
their own. However, organisations already undertaking ambitious
county-wide outreach programmes, like the Wiltshire Music Centre,
would have to scale down their work and ambition in order to share
a staff resource because there would be a corresponding loss of
capacity. However, new initiatives to engage hard to reach audiences
might well offer an opportunity, for joint approaches and collaborative
programmes of work, to achieve greater impact and coverage: eg
working with BME communities who are scattered in relatively small
numbers across the county.
3.5 While at first sight regional contract
orchestras might struggle to achieve a reduction in core costs
without drastically revising their artistic remit, the imperative
to find savings might result in their negotiating more flexible
contracts with their musicians. This might enable them, when not
programming symphonic repertoire, to deploy musicians more flexibly
in smaller venues, reaching a wider range of audiences, perhaps
tapping into new sources of income. In the South West, where there
are few satisfactory symphonic spaces, this could bring real benefits.
Many of the more adventurous musicians might welcome a more varied
diet of repertoire and work, opportunities for wider engagement
with audiences and for linked education projects.
4. What level of public subsidy for the arts
and heritage is necessary and sustainable:
4.1 So many arts organisations in the UK
operate at or close to the brink of viability. The current arts
budget costs just 17p a week per person. As relatively little
money can be saved by cutting this funding; since such good value
and benefits flow from this investment; and since so much leverage
and benefit could potentially be lost were the cuts to be severe
enough to jeopardise the viability of arts organisations—the
short truthful answer to this question is that the level of arts
subsidy needed is probably more than what is currently invested
and certainly not less.
4.2 However, the arts have to recognise
the current economic realities and play their part in helping
to eliminate the structural deficit. We are not indulging in special
pleading, we want to emphasise how essential it is for the cultural
health of this country, for its great strengths artistically,
for the welfare of its young people and communities and for its
tourism and related industries, that the arts are not disproportionately
disadvantaged by the proposed cuts and not permanently damaged.
Just as soon as the economy allows, investment in the arts should
be swiftly restored at least to current levels.
4.3 The small amounts of public money invested
in the arts work very hard and stimulate a mixed economy culture
that is admired the world over. They deliver a real return for
the country in economic terms; in terms of the kind of society
we want to be; in general well being. All this relates directly
to the quality of the art itself. Investment in the arts and artistic
excellence has to be for the long term.
4.4 Arts investment is vital for the creative
industries, and these are fundamental to the competitiveness of
British business and seen as our best route out of recession.
Between 1997 and 2006 the creative economy grew faster than any
other sector, accounting for two million jobs and £16.6 billion
of exports in 2007.
4.5 Arts and our cultural heritage are central
to tourism in the UK: this was worth £86 billion in 2007—3.7%
of GDP—and directly employed 1.4 million people. Inbound
tourism is a vital export earner for the UK economy, worth £16.3
billion to the UK economy in 2008. Liverpool 08 was the most successful
European Capital of Culture ever, with 15 million cultural visits
and £800 million worth of local economic benefit.
4.6 Artistic enjoyment and creativity has
never been more universal, more innovative, more easily distributed,
shared and exchanged. The UK has the largest creative sector in
the EU, and relative to GDP probably the largest in the world.
The arts broaden horizons, stimulate new thinking, provide pleasure
and raise aspirations—they inspire and sustain the spirit.
More people are enjoying the arts than ever before (76% in 2008/9)
4.7 For every £1 that the Arts Council
invests, an additional £2 is generated from private and commercial
sources, totalling £3 income. At a local level our ACE funding
levers in four times its worth and in some cases ACE investment
can lever in five. This is because government investment in the
arts through the Arts Council and "kite marked" as such,
acts as a stamp of approval that draws in funding from the private
sector and philanthropic sources: philanthropy follows success.
5. Whether the current system, and structure,
of funding distribution is the right one:
5.1 We believe that the current system,
and structure, of funding distribution is the right one. In the
English regions, the detailed regional knowledge and expertise
of Arts Council staff and artform specialists working at a regional
level, from regional offices, has been a very valuable resource.
5.2 The Arts Council has trimmed down its
operating costs to 6.6% (reduced from 11% in 2001-02) since 1
April, and of that only 3% is spent on administrative costs. DCMS
has asked the Arts Council, along with other Non Departmental
Public Bodies, to model a further 33-50% cut to its administration
costs. If a cut of this size is implemented, the Arts Council
will no longer be able to operate effectively on behalf of the
sector, or manage the profound change to the sector that will
be required over the coming years.
5.3 We are somewhat alarmed to learn of
this. A 30% cut would, if passed on equally, amount to a reduction
in the Arts Council's budget for regularly funded organisations
of £134 million a year. This would mean the loss of many
arts organisations—large and small. At the same time, the
slimming down of the Arts Council implies increased demands on
specialist arts organisations such as the Wiltshire Music Centre
to provide artform specific advice, guidance, evaluation and peer
review. We are simply not convinced that arts organisations already
on the margins of viability could sustain cuts of up to 30%, take
on additional responsibilities of this sort and continue to deliver
work of the highest quality. Attempting to squeeze yet more productivity
out of already marginally viable organisations would destabilise
them, resulting in the government getting much less value for
their investment.
6. What impact recent changes to the distribution
of National Lottery funds will have on arts and heritage organisations:
6.1 It is thanks to 15 years of sustained
investment and lottery funding that the arts in the UK are a UK-wide
international success story. The shift of Lottery funding to help
support sport and the Olympics has already greatly disadvantaged
the arts. While the arts sector recognises the need to contribute
to the economic recovery—it has already sustained £112.5
million of Arts Council Lottery funding being diverted to the
Olympics, in addition to the in-year Grant-in-aid cuts.
6.2 While the proposed return of Lottery
money to the arts will be greatly welcomed by all, Lottery money
is only to be phased in over time. Any increase in Lottery funding
will therefore not mitigate the impact of grant-in-aid cuts in
the next couple of years, and Lottery cannot substitute for government
funding because of the important principle of "additionality".
7. Whether the policy guidelines for National
Lottery funding need to be reviewed:
7.1 We believe that the principle of "additionality"
is an important aspect of Lottery funding. It is this that has
enabled the arts to raise its game, become more effective and
have a wider impact and benefit without requiring any significant
increases in revenue funding.
8. The impact of recent changes to DCMS arm's-length
bodies—in particular the abolition of the UK Film Council
and the Museums, Libraries and Archives Council:
8.1 While this isn't our area of expertise,
we are concerned that bodies with this degree of expertise and
objectivity are being so swiftly closed down. We wonder what the
long-term consequences of such "savings" will be and
what the future holds for the arts funding system.
9. Whether businesses and philanthropists
can play a long-term role in funding arts at a national and local
level:
9.1 Britain has developed a modern and progressive
model for cultural organisations, bringing together public funding
and private enterprise—a truly public-private partnership.
But it is a finely balanced economy: if public funding is significantly
reduced, the knock-on effect will be profound and the private
sector will not be able to make up the shortfall, earned income
would be lost and this thriving economic activity would collapse.
Major donors and Friends groups play their part in supporting
the arts, as do sponsors, corporate donors, trusts and foundations.
But it should be born in mind that philanthropy and sponsorship
follow success, they don't have the resource in the UK to sustain
organisations whose public funding has been cut.
9.2 In addressing this point we shouldn't
overlook the potential impact of cuts on arts organisations' earned
income: well over 2.3 million people, more than 47% of the South
West's population, engaged with the arts in 2008-09 (the highest
percentage outside London and the South East) spending an estimated
£137 million each year on culture and recreation—higher
than the national average. None of these people would see it as
feasible or desirable to replace the public funding. Short term
Government funding and Local Authority cuts could therefore have
unintended long-term consequences causing this fragile economy
to collapse and many vulnerable arts businesses to fail. Under
these circumstances, the loss of other income and damage to the
infrastructure risks becoming permanent—redundancies would
be inevitable, as would the loss of associated employment. Philanthropy
is part of the picture, but only a part. The same goes for government
funding, but that public subsidy is a crucial part.
10. Whether there need to be more Government
incentives to encourage private donations:
10.1 The re-gearing of the UK arts economy
implied by this question and 9 above would require considerable
additional investment up front and sustained for long enough for
a long-term strategy to achieve the required shift. To be sustainable
there would also need to be much greater buoyancy and growth in
the UK economy.
10.2 In brief, the financial climate is
tough but the arts remain a compelling case for public investment.
September 2010
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