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

Written evidence submitted by Liverpool City Council and members of Liverpool Arts Regeneration Consortium (LARC) (arts 54)

  1. This response has been produced in partnership between Liverpool City Council and members of Liverpool Arts Regeneration Consortium (LARC), a partnership of several major cultural institutions in Liverpool, including the Bluecoat, FACT, Liverpool Biennial, Liverpool Everyman and Playhouse, Royal Liverpool Philharmonic, Tate Liverpool and the Unity Theatre.

  2. Liverpool City Council and cultural organisations in the city work day-to-day with a range of other partners in tourism, health, regeneration, inward investment, higher education, as well as with other local authorities in the Liverpool City Region area. Many of these partners have provided input into this submission.

  3. LARC and Liverpool City Council are working together to create a new cultural vision statement for Liverpool. We believe that cities need a new script for setting out the way in which investment in culture can make them successful. This new account will stress the connection between cultural creativity and a broader social creativity, about health, social care, education, the environment. It will seek solutions that genuinely involve the whole community, ensuring that the benefits of cultural success reach out across the whole city and the surrounding region. It will stress that success is dependent upon a healthy core infrastructure of artists and organisations as much as major new capital investments.[16]


  4. Liverpool[17] has a world-class cultural offer. This offer has been a key driver in the area's recent renaissance, and is recognised and exploited by businesses, agencies and local government as a crucial asset in the city region's economic and social development and future competitiveness.

  5. The main points of our response to the select committee's questions are as follows:

    —  The Liverpool experience of culture-driven regeneration is unique, has been very successful and provides a model and approach that may benefit other cities. It demonstrates a high level of mature and sophisticated collaboration within and across sectors, and has been well-tested. It delivers world-class arts for tax-payers based in the city region, as well as enabling a return on investment supporting the city's economic and social development.

    —  There is now a particularly strong partnership between Liverpool City Council and Arts Council England, North West. It is important that future funding is able to be locally responsive, knowledgeable about art-form development and regionally strategic.

    —  Arts organisations in Liverpool form part of a part of a finely-balanced cultural ecology, which has international impact and reach, but is locally relevant and specific. This role is at risk if funding cuts and future policy do not recognise and build on success; and recognise and respond to local challenges, such as a limited potential philanthropic base.

    —  The city region has placed culture at the heart of its future. Thus funding cuts may damage not only the arts sector, but the future competitiveness of Liverpool as a city, impacting on tourism, external image and profile, inward investment, talent retention, and the quality of life for existing and potential residents.[18]

  6. An appendix is attached to this submission, which gives an indication of the range of evidence available of the impact of culture in terms of the economy, health, education, and social cohesion.

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?

  7. As our tenure as European City of Culture 2008 demonstrated, Liverpool is a city where culture is playing a fundamental role in the renaissance of the city and its surrounding region. There is a real risk that funding cuts will not only undermine the quality of our cultural offer but, in doing so, have a negative impact on the regeneration process. Investment in culture galvanises economic benefits through attracting both leisure and business visitors, creating a dynamic environment that attracts inward business investment, and raising Liverpool's profile nationally and internationally.[19], [20]

  8. Less investment will mean we are less able to take the programming risks and undertake the development work needed to deliver the exciting and challenging new art that sustains the city's international cultural reputation and gives regionally-based tax payers a balanced and excellent cultural offer. It will be harder to attract the "big names"—like the Picasso exhibition now at Tate Liverpool and Sex and the City star Kim Cattrall, who is shortly to appear as Shakespeare's Cleopatra at the Liverpool Playhouse. It will be harder to sustain the consistently high-quality, high-profile work which can attract those "big names" in the first place.

  9. Liverpool has attracted significant artistic talent to be based in or attached to the city—such as Vasily Petrenko, the award winning and widely acclaimed Chief Conductor of the Royal Liverpool Philharmonic Orchestra. Significant funding cuts will mean a real risk to our competitiveness in this regard. We will lose out to other countries because organisations will no longer be able to afford to maintain a sufficient critical mass of high quality activity that attracts such artists in the first place. It will become difficult to ensure the influx of new talent to the city, and to the country, which is crucial to the competitiveness of the UK's cultural offer.

  10. In Liverpool we have a national reputation for delivering outreach and education work that is making a real difference to some of the most deprived communities in the city. Much of the development and delivery of this work with our local communities could be threatened as it is underwritten by the core public investment that cultural organisations receive, or by regeneration funding that is now being lost to the City.[21]

  11. Major events in the city, which are free and draw large crowds, help to make culture widely accessible.[22] The well-developed programme in Liverpool is highly popular and often introduces audiences to new artistic experiences from international artists. The events give residents an opportunity to engage with their city and feel part of celebrating it. A number of partners across the arts sector are involved in delivering the city events programme, and the potential loss of major external funds and reduction in local authority budgets is likely to impact on the delivery of these events significantly.

  12. Any process of determining future spending cuts must show an awareness of local challenges and recent history; it should also seek to build on success and genuine potential and avoid successful past investment being wasted. It can cost substantially more to repair the damage of cuts which provide relatively small-scale, short-term savings; in the long-term this approach provides both funders and tax-payers with poor value for money. The recent history of the Liverpool Everyman and Playhouse Theatres is a good example where the theatres suffered from a lack of investment over many years and it took very significant funding to reverse. This is also particularly the case when it comes to capital development and renewal of assets.

  13. The arts and cultural organisations and practitioners of the Liverpool city region operate in an ecology which extends across the creative industries, is crucial to the tourism offer and connects with the city's knowledge economy.[23], [24]Individual artists and practitioners work across both the fully commercial and publicly funded sectors, and if there are fewer overall opportunities available due to substantial cuts within the funded sector, they are more likely to relocate to London. If the growth and development of Liverpool's creative and knowledge economy is damaged, its contribution to the region as a viable context for creative and knowledge industries development is damaged; related institutions and initiatives such as the North West universities and Media City in Salford are likely to suffer indirectly.

  14. There is also the importance of publicly funded cultural organisations undertaking research and development of artistic products which then move into the commercial sector. Liverpool is playing a strong role in this, for example two productions from the Liverpool Everyman and Playhouse have played in the West End recently,[25] and a film that resulted from a FACT programme won the Palme D'Or in Cannes.[26]

  15. The city's brand—for both tourists and potential investors—now focuses on the cultural, creative city. Liverpool's economic development strategy identifies the development of the tourism and knowledge economies as crucial to its successful diversification. The future economic competitiveness of the city—and its global positioning—is tied to its cultural offer and profile.

  16. Liverpool city region's Visitor Economy Strategy to 2020 uses the area's cultural offer as the key distinctiveness in attracting new markets and repeat visitors. The long-term viability of the tourism industry in Liverpool is linked to the quality and vitality of its culture offer, and if cuts are made in a way which limits or damages that offer, it will damage the tourism industry, affecting jobs (including hotels and restaurants), future developments and the growth of the area.

  17. And it is important to recognise that Liverpool's cultural offer is truly part of the UK's unique national cultural and tourism offer; an offer which extends beyond London to include a broad body of crucial and outstanding artists and arts organisations across the country.

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

  18. Liverpool already provides a strong example of arts organisation working in close collaboration amongst themselves, and in a mature, sophisticated partnership with the City Council and other sectors. The arts networks include LARC (as described above), and smaller organisations joining together as part of COOL (Creative Organisations of Liverpool). This is mirrored through the Merseyside (local authority) Arts Officers Group, and developing networks of smaller organisations in other boroughs.

  19. LARC partners have a particularly strong history of working together from artistic collaborations, to working on shared operational services aiming both to save money and to reduce combined environmental impact. Equally, we work with other sectors, such as health and education, in activities which often add significant value to the return on investment over and above what could be delivered if they were undertaken by one sector working on its own.[27], [28]In addition, there is a growing practice of working with tourism partners, including the Tourist Board, on successful external marketing to visitors, promoting culture and heritage through destinational campaigns, visitor-focused guides and websites.

  20. Artistic collaboration and sharing has been at the heart of Liverpool's success over the past few years, as shown through Liverpool 08, and through the extensive artistic collaborations that are still continuing. The Liverpool Biennial is a prime example of partnership working, involving all the major visual arts organisations in delivering this major international event.

  21. In terms of operational costs, cultural organisations are already lean operations—they are charities and, predominantly, SMEs with minimal room for duplication, already limited "back office" functions and each quite distinctive in character and shape.

  22. Nevertheless, in Liverpool we have been working for some time to foster greater operational collaboration. Our Chief Executives, Marketing, Education, HR and operational managers all meet regularly to share knowledge and support each other in effective working and identifying savings. We are now considering how we can take this collaboration to a new level in order to provide more sustainable models of operation for the long term.

What level of public subsidy for the arts and heritage is necessary and sustainable?

  23. Cultural organisations all have very differing patterns of public investment, earned income and donated income. It is hard to be specific therefore about a generic level of public investment which is necessary, as it will depend on the purpose and focus of the organisation. However all the major arts organisations in Liverpool work on a mixed economy, and in many cases, where the nature of their work allows for earned income, public subsidy represents a minority proportion of overall turnover.

  24. Certain activities, particularly those with social development or artistic innovation at their core do not always have an immediate economic return and require specific and focussed financial support to realise their long term benefits in both economic and social terms. These activities are often supported on a time-limited basis and are not given time to engender real social change. Geographical areas receive support, and then lose momentum as the initiatives end and the funding moves to other problem agendas.

  25. There should be a long-term strategy for the embedding of cultural delivery into public services, (education, health, environment), for the development of initiatives that bring long term benefits, creating new audiences for culture and benefiting a wider range of people.[29], [30]

  26. We would also argue that public funding for culture and heritage should not be seen as subsidy but as investment that can stimulate a local economy. Liverpool's success as European Capital of Culture (ECoC) demonstrated this with substantial returns across the social, economic and physical fabric of the city, proving a substantial return on public investment. It attracted 9.7 million additional visits to Liverpool, generating a direct economic impact of £753.8 million of additional visitor spend in the city region and region. These included 2.6 million visits from Europe and the rest of the world, 97% of which were first-time visitors to the city. These additional visitors generated 2.43 million staying visitor nights in the city region. Subseqeuently, over 1,000 new hotel rooms have opened in Liverpool city centre in the last year, on the strength of the leisure weekend break market.

  27. This positive effect is continuing with an underlying upward trend in audiences, and continuing strong performance in the visitor economy. Local Enterprise Partnerships will be ideally placed to ensure the development of effective and positive collaborations that can have real impact, and that investment continues to support genuine economic growth and development.

  28. Cultural investment has helped to make the city economically and socially viable again, but the pillars of the city's recovery remain relatively fragile. We still lack the commercial and private wealth that, in other major cities, helps fuel cultural success and the city's smaller cultural organisations particularly suffer as a result, particularly in relation to fundraising from individual and corporate partners.

Whether the current system, and structure, of funding distribution is the right one?

  29. In the run up to 2008, DCMS, ACE and Liverpool City Council (LCC) worked together in their approach to the cultural infrastructure in Liverpool to be strategic in their investment, and to support the significant rise in investment from LCC. DCMS were particularly crucial and forward-thinking in their support of Liverpool and in recognising and investing in the breadth of potential benefits. This joining-up has paid significant dividends, but if national partners significantly reduce their funding, key local partners will be unable to fill that gap.

  30. The regional and sub-regional role which ACE NW has played in Liverpool in the last decade has been invaluable beyond its relationship with LCC. This capacity for regional and sub-regional knowledge and for using that knowledge to inform strategic investment—whether large or small—must continue.

  31. There has already been a significant impact from the loss of RDA tourism-focused investment, affecting our ability regionally to support significant international arts activity and facilities development which has been proved to generate substantial tourism gain for the region. This is not only about the loss of investment, but also the loss of promotional campaigns run at a regional level which have directly benefited Liverpool and other parts of the North West.[31]

  32. In funding terms, it is important that the mechanisms which support a city region approach can guide and develop city region ambition. We will seek to work with our Local Enterprise Partnership when it is formed to ensure that the relationships and mutually supporting activities which have already been developed between the cultural offer and the area's economic growth are not lost.

What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations?

  33. We welcome the Government's commitment to restoring the original principles of Lottery distribution but firmly believe that the real impact will depend on how it is distributed in practical terms.

  34. There must be a fair balance between cultural and heritage beneficiaries, and between investment in projects and investment in infrastructural development and maintenance. In addition, Liverpool city region and its cultural offer has benefited significantly from lottery funds distributed by Arts Council England. This approach to investing lottery money strategically—rather than only through open competition—has been crucial to a real balance in terms of the impact which lottery funding can have, and has supported organisations to take risks and fundamentally move forward.

Whether the policy guidelines for National Lottery funding need to be reviewed?

  35. Lottery funding must be managed strategically and in a way which properly understands an area's long-term needs.

  36. Policy guidelines on capital support must be structured to ensure development of new/refurbished buildings where they are most needed and to make sure that infrastructure is not allowed to crumble at the expense of funding for projects. The emphasis should be on the capital needs of existing successful organisations whose ambition is cramped by inadequate or dilapidated buildings, rather than on new initiatives, unless there is a really compelling case for why a new organisation and a new building is needed.

  37. Policy guidelines will need greater flexibility, especially in terms of match funding requirements, as smaller organisations will struggle to meet those requirements in a reduced funding environment.

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?

  38. From the experience and success which we have had with European Capital of Culture 2008, and more generally over the last decade of redevelopment in Liverpool city region, we believe that it is important that the Arts Council should maintain genuine regional/sub-regional and art-form knowledge, in order to be relevant to tax payers, needs and assets in our area; and that it should be enabled at a regional level to be strategic and support regional/sub-regional aspirations.

  39. We are also concerned about changes to MLA which may affect both training in the museums sector, and the Renaissance in the Regions programme, which has, thus far, been very successful in the North West. We consider it crucial that that strategic approach to investing in the regions not be lost.

  40. Finally, we welcome the Prime Minister's recent comments on the value of the tourism industry, and wait to see the potential impact of changes to tourism agencies and support bodies. We are concerned that a balance should be struck between locally responsive activity, and a broader, strategic view. The relationship between the RDA and the local city region body—The Mersey Partnership—was crucial to the tourism success and impacts of the European Capital of Culture 2008.

Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level?

  41. LARC partners are already engaged in a range of relationships with businesses and philanthropists, and firmly believe that there is a long-term role for both to contribute to funding the arts, in balance with public investment and earned income, as well as to continue the other kinds of contributions they also make through bringing their expertise to board membership, and engaging in other kinds of mutually responsive partnerships.

  42. It is important, however, that, in promoting philanthropic giving, government recognises that the local environment plays a fundamental part on the potential availability of philanthropic partners. Liverpool is classified as "vulnerable" in the recent Private Sector Cities report from Centre for Cities.[32] The city currently has a very limited private sector and individual wealth base. It has also suffered in recent years from the trend of consolidation of professional services businesses, with locally and regionally-based firms being bought up by national and international conglomerations, and the decision-making power subsequently moving out of the city. Arts and Business reported that private investment in arts in the North West was down 27% in 2008-09 on the previous year, and accounts for only 3% of the total private investment received in the UK arts sector.[33], [34]

  43. There is significant competition already for the available philanthropic resource in Liverpool, not only from within the arts sector, but also from heritage, higher education, faith-based organisations and other charities. Whilst a number of arts organisations in Liverpool have well-developed partnerships and initiatives, smaller organisations are not necessarily equipped with the expertise or resource to engage in significant fundraising activity.

  44. Whilst we feel that there may be opportunities in the future to grow the level of philanthropic giving in Liverpool, we believe that it is likely to be at a lower level than in other, more economically prosperous cities. This is also likely to affect the potential for undertaking fundraising for endowment funds, as a limited market for fundraising will necessarily have an impact on all areas of fundraising (revenue, capital and endowment), and potentially bring them into competition with each other.

  45. Finally, in encouraging greater philanthropy it will be important to recognise that there is a limited culture of philanthropic giving in the UK at present, which goes beyond the experiences and endeavours of the arts sector. The university sector in the UK has only recently benefited from significant government matched funds, to help promote greater philanthropic giving. In moving towards greater philanthropy, small-scale giving must be appreciated as much as larger gifts, in order to foster that greater giving culture and habit.

Whether there need to be more Government incentives to encourage private donations?

  46. Introduction of incentives to encourage private donations would be welcome, in particular in relation to "Lifetime giving", whereby a donor gifting a work of art retains some ownership of the item, is enabled to share it with the public through an arts organisation, and gains the benefits of both a tax benefit and being recognised as a donor within their lifetime. In Liverpool, where there is a limited pool of potential individuals who may have money to give, finding other ways in which to support giving—such as the giving of objects—will be particularly important.

September 2010

16   From The Liverpool Way the draft vision statement that is being prepared jointly between LARC and Liverpool City Council: "It's about making the most of Liverpool's remarkable cultural assets, and the major cultural organisations delivering to their individual and collective strengths, including outstanding international programmes and linking these to local communities and visitors to the city in a strong, collaborative partnership with the city council and others. It is about creating a movement for arts and culture not just monuments, about new ways of connecting creative producers, institutions, and creators to communities and social networks. It unlocks, opens up and makes visible the potential and talent in these communities and brings great art to Liverpool in a way that draws out and builds on our talent." Back

17   For brevity, Liverpool is referred in this submission simply as "Liverpool" or the "city"; however, much of the planning and activity delivery referenced here extends to the broader city region. Back

18   The visitor economy in Liverpool city region already sustains 23,000 jobs and £1.3 billion annual visitor expenditure, and is set to grow to 25,000 jobs and £1.4 billion expenditure by 2012, rising to 37,000 jobs and £2 billion expenditure by 2020. Back

19   Liverpool City Region sold a record-breaking number of rooms in July 2010 95,000, a rise of 22% on the previous year and 11% on 2008, with occupancy levels rising overall, compounded by an overall increase in hotel rooms. Overseas spend for 2009 is estimated to be worth £47 million, with total visitor spend (and economic impact) for the year estimated at £485.8 million, supporting 6,753 FTE jobs. 57.1% of staying visitors and 47.9% of day visitors identified culture as a key reason for their visit. Back

20   Recent research undertaken by the city to understand the motivations of potential inward investors revealed that: 65% said it is harder to differentiate between destinations; 92% said that image and profile are becoming more important in their decisions; 58% said "soft" factors such as culture and architecture are more important than five years ago; and 60% cited a "Strong tradition in culture and the arts" as an asset of a demand destination. Back

21   A recent example of such work is a community arts project undertaken by Liverpool Everyman and Playhouse with a group of unemployed young men in North Liverpool. Inspired by this, the participants gained theatre lighting certificates by working with the theatres' technical team, and can now gain work in the industry. Moving these young people from reliance on benefits to employment has given the young men hope and confidence, impacting on the individuals and their communities, and demonstrating a fiscal and social return on "investment". Back

22   The major events programme includes the Mathew Street Festival, Africa Oye and the Hub Festival, as well as seasonal events and public art trails. In 2009 the programme attracted 915,000 visitors, who spent just over £33 million. Back

23   The Knowledge Economy prospectus for Liverpool recognises the importance of the "clustering effect"' to building a healthy creativity and knowledge-based industry. The city's Knowledge Quarter, the wider Hope Street area, is a key example of this interdependent clustering, where arts venues, cathedrals, universities and a science park provide a critical mass of "talented and productive people"' which helps to drive this economic growth. Back

24   Jon Corner, Managing Director of private sector, Liverpool-based digital firm, said: "What is important to the future of my business is my ability to attract and keep talented people here and Liverpool's cultural offer is a part of that." Back

25   Ghost Stories is currently running in the West End, and The Caretaker has completed a three-month West End run and is about to commence a commercial tour of the US. Back

26   Uncle Boonmee Who Can Recall His Past Lives was awarded the Palme d'Or at this year's Cannes International Film Festival. The film was made as part of Thai artist Apichatpong Weerasethakul's Primitive Project, which was co-commissioned by Arts Council England regularly funded organisation FACT for the inaugural Abandon Normal Devices (AND) Festival of New Cinema and Digital Culture. Back

27   One example of how the arts have added value to health provision is a project undertaken by FACT in partnership with Alder Hey Children's Hospital, in which an installation based on Birdsong had a proven impact on patient anxiety and is now forming the base for long term study on reducing needle phobia in patients. Back

28   Another example of ground-breaking collaborative working is the Creative Apprenticeships scheme, led by Tate Liverpool working with all LARC partners and Liverpool Community College to support skills development in young people giving them greater access to working in the creative and cultural sectors. In 2008-09 the first 10 Creative Apprentices in the UK were placed in all the major arts organisations in Liverpool. In 2010 the scope of the hosting organisations has broadened significantly with 20 young people currently in post. Back

29   The Royal Liverpool Philharmonic's In Harmony programme is a strong example why cultural organisations should be supported through mainstream education budgets, given the real impacts that can be achieved. Inspired by the Venezuelan El Sistema model, In Harmony is supporting a three-year programme between the RLP and the local primary school and the community in West Everton, one of the most deprived areas in the UK. Interim evaluation results demonstrate strong improvements in numeracy and literacy rates. The percentage of children improving by two national curriculum levels or more in SATS tests in reading has increased from 36% in 2009 to 84% this year, and in numeracy from 35% in 2009 to 75% in 2010. Back

30   The Bluecoat engages directly with current social care agendas through provision of high quality services for learning disabled people in a mainstream arts venue. Participants in the programme have significantly increased their confidence, for example now travelling independently to the project, and joining in volunteering activity. This scheme is currently funded through Area Based Grant. Funding cuts will affect delivery in 2010-11 and the future is uncertain for this award-winning programme. Back

31   In 2007, 746,000 visitors were estimated to be directly influenced to visit the city by specific marketing from the tourist board; a further 101,000 visitors were indirectly influenced by marketing to make their visit. Some 112,000 staying visitors were influenced by marketing; these visitors spent £24.6 million on their visits. Back

32   The index of England's stable cities looked at Liverpool's declining population, limited real GVA growth, limited private sector jobs growth, low average house prices, high average JSA and Incapacity Benefit Rate and low average wages. Neighbouring Birkenhead, within the city region area, appears on the index of England's struggling cities. Back

33 Back

34   Brenda Parkerson, Regional Director, Arts and Business North comments: "The North West continues to have an extraordinary cultural life. We need everyone to understand how hard cultural organisations work to secure private money to make this cultural life flourish. Many of our cultural partners are showing a real willingness and ability to adapt to the new funding environment and Arts & Business is with them every step of the way. It is not about `quick fix' fundraising, arts organisations need to help foster a culture of long-lasting relationships. We know it can be harder to raise private money here in the North West than in other parts of the country. London arts bodies receive more than three times as much private investment as in the England regions-and 88% of all individual giving is concentrated in London. Arts and Business' analysis also reveals there is a vast difference in levels of private investment received by large and small organisations. Large and major organisations (with an annual turnover of £1 million +) receiving approximately £602 million, while medium and small organisations (with an annual turnover of under £1 million), collectively receive around £59 million. The UK model of public and private investment is working and while under severe threat, must not be allowed to falter. Collectively we must do all we can to champion and grow the contribution of the private sector in this region to make our cultural world succeed." Back

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Prepared 30 April 2011