Written evidence submitted by English
Heritage (arts 74)
SUMMARY
— Our heritage is at greater risk as
a result of the recession.
— Tackling heritage at risk is dependent
on public funding and resources, both national and local.
— Cuts to public funding, added to
other impacts of the recession such as restrictions on credit
and the liquidation of developers and construction companies,
will make it more difficult to find solutions for heritage at
risk.
— Over the past 13 years, English Heritage
has received real terms cuts in our grant in aid. This contrasts
with increases in funding to the DCMS and to other DCMS bodies.
— English Heritage has already made
significant efficiency savings which limit our ability to make
further efficiency savings over the next four years.
— If there were further cuts to English
Heritage funding, depending on their level, we would aim to protect
our core services, target our resources more effectively and generate
more income from other sources (depending on our capital allocation
from government). We are already working more creatively with
other organisations and we aim to do more.
— We hope that the government will
allow English Heritage to use income generated from other sources
to complete the Stonehenge project for 2012.
— Public subsidy will continue to be
necessary to address the market failure in funding heritage which
provides a public benefit and to conserve and maintain the historic
properties which English Heritage cares for on behalf of the nation.
— English Heritage is happy to consider
any structural changes which result in better services for the
public and reduced costs.
— Changes to the Government's rules
on End Year Flexibility would help us make greater use of private
philanthropy.
Q. What impact recent and future spending
cuts from central Government will have on heritage at a national
and local level.
1. English Heritage is the UK Government's
statutory adviser and a statutory consultee on all aspects of
the historic environment and its heritage assets. This includes
archaeology on land and under water, historic buildings sites
and areas, designated landscapes and the historic elements of
the wider landscape.
2. English Heritage monitors and reports
on the state of England's Heritage. Each year we publish the Heritage
at Risk survey which is an Official Statistic. The condition of
our heritage and the recent trends, including the impact of the
recession, provide the context for the consideration of the impact
of reductions in funding.
3. In 1999, one in six buildings on the
Heritage at Risk Register was fully economic to repair. In 2010
that figure has fallen to just one in eight. The "conservation
deficit"—the difference between the cost of repair
and the end value—of these 1,218 buildings is now estimated
to be £465 million, a 10% rise on the 2009 figure. Public
funding and resources are critical to ensuring these, our most
important national assets, are brought back into viable economic
use and are not lost to future generations. Reductions in public
funding alongside restrictions on credit, falling investment returns
and the failure of development companies will make it much harder
to find viable solutions for our heritage at risk.
4. There will be impacts at national and
local levels, both in the resources available to look after publicly
owned historic properties and in the support public organisations
give to private and voluntary sector owners. 16% of the properties
on the Heritage at Risk Register are in public ownership and public
resources, in the form of advice as well as grants, are also vital
in bringing back into use properties owned by the private and
voluntary sectors.
IMPACT ON
PUBLICLY OWNED
HISTORIC PROPERTIES
5. A significant part of England's heritage
is owned and managed by public organisations. Reductions in public
spending are likely to affect their ability to maintain the heritage
in their care. We have already seen evidence of this in the withdrawal
of the Higher Education Funding Council's dedicated funding stream
for historic buildings in university estates.
6. There will be increasing pressure to
dispose of property regarded as superfluous to requirements—Finsbury
Health Centre being one example. This could lead to an increase
in sensitive buildings and sites coming on to a flat property
market at a time when investors with the capital and experience
to take on challenging restoration projects have become increasingly
scarce. At the same time, voluntary and charitable organisations
may have more limited ability to take on such projects as a result
of the falling value of their endowments.
IMPACT ON
PUBLIC SECTOR
SUPPORT FOR
PRIVATE AND
VOLUNTARY SECTOR
OWNERS
7. Public bodies provide a range of practical
support to maintain our heritage. English Heritage grants to historic
places although modest (about £25 million per year) are carefully
targeted and enable us to help owners of heritage at risk in ways
that other organisations cannot by removing enough of the risk
to make it worthwhile for the private sector to invest. For example:
— We invested £250,000 to keep
the roof on the Roundhouse in Camden at a time when no long term
solution was in prospect. This helped to attract the philanthropic
investment which has secured the future of the building and provided
new cultural facilities for London and the local community.
— In August this year a £50,000
grant was made to save the lead mining centre at Grassington Moor
in the Yorkshire Dales where water erosion had caused such severe
damage that the site was on the Heritage at Risk Register. This
relatively small sum will pay for emergency repairs and a management
plan to ensure a long term future for this important part of our
industrial heritage which would otherwise be lost.
When necessary we can make grants available
very quickly to save buildings at urgent risk. However, the value
of our grants has declined with the real terms reduction in our
grant in aid over the past 13 years. This trend will continue
if our grant in aid is cut in the next spending round and without
our "last resort" assistance, historic buildings and
sites will be lost forever.
8. Because our heritage is part of the fabric
of our daily lives it is generally maintained by funding from
organisations whose primary purpose is not conservation, including
for example the Regional Development Agencies' place-based funding
programmes and DEFRA's Environmental Stewardship programme (administered
by Natural England) which is the largest source of funding for
heritage in rural areas. English Heritage is concerned that pressures
on the budgets of other organisations may result in them no longer
supporting heritage projects.
9. At the local level, over £1.1 billion
will be cut from local authority funding for the financial year
2010-11, with further reductions to come across the course of
the next spending round.[35]
Reductions in local authority funding will affect their ability
to support heritage. Local authority budgets for taking statutory
action for repairs and urgent works notices to historic buildings
are also likely to be reduced. Partnership schemes involving owners,
local authorities, English Heritage and third parties have been
particularly successful in tackling some of the more intractable
cases, but are now themselves at risk from budgetary cut-backs.
10. The number of heritage staff employed
in local authorities has declined by 14%[36]
since 2007, a trend that could accelerate as council budgets are
squeezed and local authorities look to make cuts in non-statutory
services. Conservation and archaeological officers play a vital
role in identifying solutions and putting investors in touch with
owners and identifying and pursuing funding opportunities from
organisations such as English Heritage and the Heritage Lottery
Fund (HLF). Without their expertise the task of removing buildings
from national and local "at risk" Registers will become
much more difficult.
IMPACT ON
ENGLISH HERITAGE
Funding History
11. English Heritage's recent funding history
affects our ability to sustain further cuts.
Since 1997 EH has received grant settlements
of below inflation, resulting in a real terms reduction of £130
million. EH funding was cut when DCMS received above inflation
increases. Some of the other DCMS Arms Length Bodies have received
increases significantly above inflation over recent years. Over
the last 10 years, Arts Council England experienced real terms
growth of 41%, Sport England experienced 182% growth while English
Heritage received a cut of over 11% in real terms.
12. The reduction in our funding over the
last 13 years has had a significant impact, including the reduction
in the value of our grants referred to above, exacerbated by the
fact that construction industry costs have risen above the rate
of inflation during that period. English Heritage cares for 420
historic sites and monuments put together since the 1880s as the
national collection of historic places and we now have a maintenance
backlog at our properties of over £50 million.
13. Against this background, we have made
significant efficiency savings and generated more income to enable
us to continue to provide our services. For example, we have relocated
our finance department out of London and reduced its cost by £800k
per annum. Our admin cost has fallen by 16% in the three years
since 2006-07. The scope for additional efficiency savings is
limited because of what we have already achieved.
14. English Heritage has been highly successful
at generating more income and achieved 7% year on year growth
in recent years. The income we generate helps to sustain the heritage
in the care of the nation and reduces the burden on the taxpayer
but our ability to increase income is dependent on being able
to invest to improve our offer to visitors. For example, at Kenilworth
Castle we invested around £3 million which has taken the
property from a deficit of £395k in 2004-05 to a surplus
of £414k in 2009-10. We are keen to continue to increase
the income we generate but this is dependent on the level of capital
we are allocated by government.
In year Cuts
15. Government funding for English Heritage
has been subject to an in-year cut of £4.24 million. To deal
with this, we have introduced a series of measures including an
immediate recruitment freeze across the organisation, the withdrawal
from our successful bid to the Future Jobs Fund and a cut of £1
million to our Heritage Protection Reform budget. Further efficiency
measures are also being introduced but given the savings that
have already been achieved in recent years, each further saving
is more of a challenge to achieve.
Future Cuts
16. Despite our funding history, English
Heritage is realistic that further cuts are likely as part of
tackling the national economic problems. If we are faced with
further cuts our response would be to:
— protect our core services, especially
our expert staff who advise on planning, so that we can be most
effective in supporting local authorities and owners;
— target our resources more effectively
using the National Heritage Protection Plan we are developing
to prioritise the resources we (and others) put into the understanding
and protection of the historic environment and our Asset Management
Plan which will enable us to direct resources towards the most
pressing conservation and maintenance needs in the historic properties
we care for directly;
— generate more income from other sources,
where we have been very successful in recent years (as outline
above). Subject to the capital allocation we receive as part of
the Spending Review we will continue to invest in our sites. We
want to dedicate as much of our resource as possible to improving
the experience for visitors to our properties. We will therefore
be looking hard at which of our assets could release income which
we can use to reinvest for greater public benefit; and
— increase partnership working, including
working more closely with the voluntary sector and other public
bodies (this is explored further in the section on working together
more closely)
Stonehenge
17. English Heritage was bitterly disappointed
at the Government's decision to withdraw Government funding for
the Stonehenge Environmental Improvement Project. As the House
of Commons Public Accounts Committee concluded in 1993 the presentation
of Stonehenge is a "national disgrace." Stonehenge is
an iconic site, familiar to millions all over the world. 71% of
current visitors to Stonehenge are from overseas and we expect
numbers to increase in 2012. In the context of the very considerable
investment being put into the London 2012 Olympic Games and Paralympic
Games, English Heritage believes it is vital that Stonehenge offers
visitors a high quality experience, worthy of the significance
of the monument. We therefore hope that the government will allow
us to use income generated from other sources to complete the
project for 2012.
Q. What arts organisations can do to work
more closely together in order to reduce duplication of effort
and to make economies of scale
18. English Heritage already works closely
with other organisations and we aim to do more of this in future.
For example, we already run a joint scheme with the Heritage Lottery
Fund for Repair Grants for Places of Worship. We will continue
to explore how we can work together more effectively using English
Heritage's practical expertise to help communities identify, prepare
and implement projects that can secure HLF support, and ensure
that their funding is used efficiently and effectively.
19. Sharing services in back office functions
is being promoted across the public sector. In the light of this,
the Commission for Architecture and the Built Environment (CABE)
recently requested that English Heritage provide them with a full
range of finance services. CABE and English Heritage have sought
DCMS approval with a view to starting this arrangement through
a service level agreement from December 2010.
Q. What level of public subsidy for the arts
and heritage is necessary and sustainable
20. Some level of public subsidy is necessary
to sustain parts of our heritage, reflecting its the public value
and the fact that market solutions will not always be possible.
21. As already mentioned above, our Heritage
at Risk Register estimated the "conservation deficit"
to be £465 million. This is the difference between the cost
of repairing designated heritage at risk and the end value, ie
the funding necessary to attract private investment.
22. A level of public subsidy will continue
to be necessary for the maintenance and conservation of the 420
historic sites and monuments put together since the 1880s as the
national collection of historic places and cared for by English
Heritage. As already stated above, there is a maintenance backlog
at our properties of over £50 million. Our Asset Management
Plan provides us with evidence that if investment in the condition
of our sites and properties continues at the current level, the
maintenance backlog will increase. If we were able to increase
the £14 million we currently spend on our historic estate
by £6 million we could reverse the decline in the condition
of the properties.
23. Excluding the costs of conservation
and maintenance, we have worked hard to reduce the cost of to
the taxpayer of opening the properties we care for to the public
by cutting our costs and generating more income. In 2009-10 we
made an operating surplus of £2.5 million compared with a
deficit of £2.4 million in the previous year. This is partly
due to the increase in visitors due to people holidaying at home
but also reflects efficiencies and investments in improving the
quality of our sites.
Q. Whether the current system, and structure,
of funding distribution is the right one
24. On 26 July 2010 DCMS announced that
it is looking at its responsibility for heritage and the built
environment, and considering the role and remit of English Heritage,
the Heritage Lottery Fund and the National Heritage Memorial Fund.
English Heritage is happy to consider any structural changes that
would result in better services to the public and reduced costs.
We are working closely with the Department for Culture, Media
and Sport to see what opportunities there might be.
25. In considering the relationship between
English Heritage and the Heritage Lottery Fund it is helpful to
understand the differences between the grants made by English
Heritage and those made by the HLF. As outlined above, our grants
are targeted on heritage at risk and we do not require projects
to meet multiple objectives. English Heritage grants safeguard
important buildings so that they are not lost while a solution
can be found by the market, removing enough of the risk to make
it worthwhile for the private sector to invest. Around 20% of
English Heritage grants for repairs to buildings at risk go to
private owners. Almost half go to charitable organisations. When
necessary we can make grants available very quickly to save buildings
at urgent risk.
Q. What impact recent changes to the distribution
of National Lottery funds will have on arts and heritage organisations
26. The Lottery is a vital source of funding
for heritage. Against the background of the impact of past and
future public spending cuts outlined above, it is very welcome
that the government has made a commitment to redistribute Lottery
resources to the original good causes, including heritage.
Q. The impact of recent changes to DCMS arm's
length bodies—in particular the abolition of the UK Film
Council and the MLA
27. The structures for channelling public
funding are a matter for Government to decide. English Heritage
hopes that the future will be secured for important functions
currently carried out by the MLA, notably the Museum Accreditation
Scheme and the Government Indemnity Scheme. We also note the Government's
decision to abolish the Advisory Committee on Historic Wreck Sites.
We will work with DCMS to identify options for securing the functions
of the Committee which is currently administered by EH on behalf
of Government.
Q. Whether businesses and philanthropists
can play a long-term role in funding arts at a national and local
level
Q. Whether there need to be more Government
incentives to encourage private donations
28. English Heritage raises around £3.5
million (net) from major benefactors, legacies and smaller donations
and corporate fundraising (the latter is relatively small). Philanthropic
organisations and individuals have played a significant role for
a number of years, but more so in the larger London-based cultural
organisations. A mixed economy of public and private funding is
preferable but there will be a limit to what can be raised through
philanthropy as organisations will be competing against each other.
29. There are two reforms Government could
make which would improve our ability to take advantage of private
giving:
— Releasing Arms Length Bodies which
receive philanthropic donations from End of Year Flexibility requirements
would make an enormous difference. This would allow for a much
greater degree of coordination across projects and forward planning
and would respect the fact that donations are not public expenditure.
— Reform of the Gift Aid scheme in
order to simplify the process for both membership and admissions
would be of benefit to the heritage sector.
September 2010
35 LGA Briefing June 2010. Back
36
EH/ALGAO/IHBC Survey 2010. Back
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