Written evidence submitted by Historic
Houses Association (HHA) (arts 203)
KEY ISSUES
— The arts and heritage play a very
positive role in the UK economy and some areas of expenditure
are essential if our heritage is to play its part at the heart
of social and economic recovery.
— The historic environment requires
not only grant aid, but expertise to underpin conservation.
— There is scope for the creation of
public-private partnerships to pool resources and improve efficiency.
— The restoration to 20%, of the shares
of National Lottery funding to the arts, heritage and sport, would
be very beneficial.
— Government incentives are essential
to optimise business sponsorship and philanthropy, whether through
funding or reform of taxation.
INTRODUCTION
The Historic Houses Association (HHA) represents
historic houses, gardens, castles and estates mainly in private
ownership, although there are a number of charitably owned houses
in membership. We have 1,500 members throughout the UK, representing
an astonishing variety of cultural heritage, ranging from intimate
family homes to some of Britain's most iconic buildings.
Our members' houses and gardens welcome 14 million
visitors each year; 500 are open to the public, more than the
National Trust and English Heritage and their equivalents throughout
the UK combined. One in five of all member houses and gardens
have developed education resources and programmes and welcome
over 300,000[50]
educational visitors each year.
Historic houses provide character, distinctiveness
and a sense of place and help create pride in where people live.
87% of British people think the historic environment plays an
important part in the cultural life of the country.[51]
Historic houses are seen as being central to our quality of life
and our sense of identity and well-being. The latest English Heritage
research shows that in all seven historic environment regeneration
areas surveyed, over 90% of people who lived and worked locally
agreed that these projects had improved their quality of life.[52]
The virtual disappearance of grants for the
restoration of privately-owned historic houses and the loss of
incentives such as the One-Estate Election, have had a significant
impact. Since much of the heritage economy is in private hands
and operates outside DCMS control, the impact of government funding
reductions is in reality much greater than DCMS budget reductions
suggest. Government has a critical role in filling the gaps that
the market cannot cover.
Over the years, some houses have been sold and
have closed their doors to the public, while one owner in eight
has had to sell art in order to finance repairs. When art is sold
to finance repairs, the chances of it ever coming back to it house
of origin in the UK are very slim.
THE IMPACT
OF GOVERNMENT
SPENDING CUTS
1. The potential negative impact on the
UK economy, of significant arts and heritage spending cuts by
central and local Government, can be demonstrated by the fact
that 80% of international visitors say that their principal reason
for visiting Britain is connected to heritage and culture.[53]
Heritage tourism contributes £20.6 billion to GDP each year,
supporting 460,000 jobs.[54]
Reductions in spending on heritage would be a false economy if
they led to reduced tourism revenues, as would be likely.
2. Many historic houses and their gardens
are the key players in their local economies, particularly in
rural areas, where other opportunities for employment and business
activity are often limited. 30,000 people are employed directly
at historic houses, or in businesses occupying premises in the
grounds.[55]
The beneficial effect that public visiting to these places has
on the wider economy is estimated at £1.6 billion per annum.[56]
Cuts in spending on grants and advice for privately owned heritage
would over time, have a significant and negative impact on the
economy of rural areas.
3. The historic environment creates not
only a sense of environment, but stimulating and exciting places
for learning. For instance, one in five HHA properties offer educational
visits. Cuts in grants and advice for privately owned heritage
are likely, over time, to reduce the provision of these educational
visits, by handicapping the ability of owners to restore and adapt
their properties. Cuts in educational spending will also erode
the ability of schools to make visits. The combined effect will
be a diminished educational experience for school pupils.
4. Since two-thirds of Britain's historic
environment is privately owned and managed, its owners bear the
costs of stewardship. HHA owners alone spend £139 million
per annum on conserving historic buildings and their contents,
with practically no public support. Even this figure falls well
short of the amount needed to maintain the fabric of historic
houses. As a result, the backlog of repairs at HHA houses has
risen by 50% from £260 million in 2003 to £390 million
in 2009.[57]
5. The provision of expert advice by English
Heritage to owners and managers and through local authorities
is of considerable importance. Without this expert advice many
local authorities might, inevitably, make uninformed decisions,
which cause damage to the historic environment, or avoid making
decisions which are essential to the viability of historic buildings.
The consequences, including the possible loss of important places
and environments and the effects on quality of life could be very
damaging, not just in practical terms, but in relation to loss
of identity and sense of place.
6. Spending cuts in this area also pose
a threat to the role that historic buildings can play in regeneration
of communities and local economies. There are numerous examples
across the country of the way in which the historic environment
plays an essential role in regeneration through sustainable development.
It can make a unique contribution to the quality of the environment
and historic houses often support the regeneration of local economies,
especially in rural areas, by sourcing local products and services.
Castle Howard, for example, does business with 1,000 local companies.
ECONOMIES OF
SCALE
7. There are, no doubt, efficiency savings
that may be made within the funding systems for the arts and heritage.
In particular, partnership working may play an important role
in husbanding resources efficiently.
8. However, a reduction in the number of
agencies does not necessarily equate to a beneficial economy of
scale. For example, English Heritage plays a unique role as the
specialist body which advises Government on the historic environment,
supporting the sector through grant-giving, advocacy and expert
advice, as well as playing a critical role in supporting local
authorities in championing the historic environment.
9. Any compromising of English Heritage's
(EH's) highly professional advice service to owners and local
authorities in planning and casework, or where complexity is beyond
local expertise, could result in disparate standards and short-term
interest outweighing the national good. As such, EH has a different
geographical remit and plays a distinct role from that of the
Heritage Lottery Fund (HLF) and their two sets of functions would
not sit well together within a single organisation.
10. Given that EH currently provides both
funding and expertise in support of the historic environment,
it is important, in order to ensure the best use of public funds,
that its expertise is not separated from its capacity to award
grants. So even if, for example, the introduction of a single
specialist agency for awarding arts and heritage grants were to
appear cheaper, it would provide significantly less value for
money than the current system, as a consequence of the separation
of roles.
LEVELS OF
PUBLIC SUBSIDY
11. Cuts in heritage expenditure have potentially
serious consequences, some of which can be demonstrated by examining
recent history. For example, reducing EH support to buildings
on the Heritage at Risk register by 40% would have resulted in
the loss of 460 Grade I and II* buildings during the period 1999-2010.[58]
12. While any reductions in EH's ability
to deliver these services would be undesirable, it would nevertheless
make strategic sense for it to invest in external partnership
working in order to deliver more of its objectives in the medium
to long term. Investment in the private sector could underpin
strong, cost-effective partnerships which benefit the historic
environment.
13. Currently, while financial support for
privately owned heritage from EH is extremely limited, it is specifically
excluded from HLF conservation funding. There is, however, a strong
case for reviewing this policy and making HLF grants available
to projects in the private sector. This case is explained in paragraph
23 below.
14. Sustainable funding sources are particularly
important for the historic environment, because once neglect has
set in, the ultimate expenditure required to restore a property
may be much greater than if funds were available to enable early
repair.
15. Some areas of public expenditure are
essential if our heritage is to play its part at the heart of
social and economic recovery. Certain areas need to be protected,
as a consequence. These should include:
— the specialist legislative capability
within the DCMS to frame the legislation required to update the
heritage protection regime;
— proper resourcing for historic environment
services in the forthcoming review of local authority finance;
and
— support for cultural learning opportunities
for children and adults, in which heritage plays an integral part.
The HHA has put these ideas forward to DCMS
as part of our response to the DCMS Structural Reform plan, both
on its own behalf and as part of the Heritage Alliance.
THE CURRENT
FUNDING SYSTEM
16. Public investment in the historic environment
is needed for the reasons already given, but also generates employment
in the tourism and construction industries. In addition, quality
of environment is one of the key factors in promoting inward investment
and historic buildings have an important role to play in creating
places where people want to live, work and visit. The funding
system has a role to play in conserving and enhancing the quality
of the environment.
17. Given this and the fact that two thirds
of the historic environment is privately owned, we would welcome
a statement of policy from government that the privately owned
heritage should be as entitled to eligibility for grant aid as
historic buildings in public ownership, so long as funding is
directly linked to a significant public benefit.
18. The establishment of this principle
would not undermine the current system, but could facilitate the
establishment of public-private partnerships, which would enhance
the existing system and enable the best use of limited resources.
19. The current system lacks fiscal incentives
to support the built heritage. Proposals for these are referred
to in the final section of this response.
THE NATIONAL
LOTTERY
20. The HHA strongly supports the HLF as
a nationwide body delivering the National Lottery for heritage
organisations throughout the UK. Its funding is coordinated and
has allowed for a more sensitive response to grantees, for example
in the percentages of partnership funding needed, particularly
for smaller projects.
21. The HHA welcomes the coalition government's
intention to increase the shares to arts, heritage and sport,
restoring the original share of 20% in 2012. However, Lottery
money should not be allowed to become a substitute for funding
that would normally fall to mainstream Government spending and
we welcome the commitment to the principle of additionally that
this proposal makes, at a time when other sources of public funding
will be under greater pressure.
22. Funding distributed by the HLF has had
a huge impact on the historic and natural environment and has
helped to generate further investment and presented opportunities
for regeneration and community growth. The HHA supports the HLF's
role as investor, rather than funder, which means that grants
have an effect substantially greater than the funds invested,
particularly when they involve other funders and partners.
23. The HHA hopes that the increase in funding
available to HLF will pave the way for further support for heritage
projects supported by the private sector. Currently, privately
owned heritage is, as stated in six above, specifically excluded
from HLF conservation funding. We believe that there is a strong
case to review this policy and to make HLF grants available to
projects in the private sector, so long as the public benefit
is sizeable in relation to the grant and particularly in relation
to any incidental private benefit. The principle is not new. English
Heritage grant aids privately owned heritage (albeit on a tiny
scale compared with previous practice) and in other areas, such
as environmental conservation, school or hospital building or
defence procurement, it is the norm for government to purchase
goods or services for public benefit or use from the private sector.
24. The HLF already devotes resources to
encouraging applications from underrepresented groups and geographic
areas. Increasing this role through additional funding should
improve take up from these sectors.
25. The HHA shares the concerns expressed
by the Heritage Alliance about the requirement for Lottery distributors
to reduce the proportion of funding for administrative purposes.
This could have the negative result of discouraging distributors
from making smaller grants which are proportionately more costly
to administer. Projects with which the HHA has been involved have
often had to piece together grants from different funders for
relatively modest grants and it would be a great concern if these
smaller grants were not properly supported. As an example, the
HHA is currently involved in a heritage outreach project which
has received £36,000 of public funding but will go on to
unlock a further £70,000 of partnership funding and involve
a groundbreaking collaborative partnership.
26. The HHA is also concerned that HLF research
resources are to be included in administrative costs. The HLF
is uniquely able to undertake robust research on the social and
economic outcomes of heritage investment and to provide a national
UK wide perspective. The Heritage Lottery Fund's report: Investing
in Success: Heritage and the UK Tourism Economy 2010 revealed
the scale of the heritage tourism industry in the UK, estimating
its gross domestic produce contribution to be £20.6 billion.
BUSINESS SPONSORSHIP,
PHILANTHROPY AND
GOVERNMENT INCENTIVES
27. The HHA believes that a mixed economy,
involving public-private partnership working and including a robust
system of public funding is essential to the health of the arts
and heritage in the UK.
28. A strong and unequivocal government
commitment to the value of our heritage is needed, in order to
avoid demotivating both potential philanthropists (including those
responsible for the maintenance of our heritage) and the large
number of volunteers who work on the historic environment and
whose contribution is increasingly important in times of economic
stringency. Such a commitment would also help to focus the attention
of potential business sponsors on the benefits of supporting heritage
projects.
29. If the historic environment is to meet
the challenges which result from reductions in spending—if
the gap in funding, and more, is to be made up from the support
of large and small-scale philanthropists—practical incentives
are needed. Improving the operation of the existing tax regime,
for example on Acceptance in Lieu and Gift Aid, would help both
to conserve historic houses and extend public enjoyment of the
nation's heritage.
30. Other mechanisms are needed too, to
encourage increased and enduring funding from businesses and philanthropists.
The historic environment needs schemes similar to the Big Arts
Give or Arts and Business's former Pairing Scheme, by which government
support directly stimulates increased investment from private
sources.
31. For the privately-owned historic environment,
the principal issue may not be reductions in public funding. A
tax regime to stimulate the maintenance of historic buildings,
including a reduction in VAT on repairs to all listed buildings,
which properly recognises their value to society and the economy,
would help significantly.
32. The greater use of Heritage Maintenance
Funds would eat into the backlog of repairs referred to in paragraph
4 above and generate employment in conservation skills. However,
such use will not be made without changes to the currently unfavourable
tax treatment of income and capital gains generated within such
funds. The HHA has made proposals for improvements in the tax
treatment of HMFs, taking into account that the money generated
by them can be used only for the maintenance of nationally important
historic buildings, usually open to the public. The details can
be found at: http://www.hha.org.uk/our-policies/tax-campaigns.html.
September 2010
50 HHA Education Survey (2006). Back
51
Valuing our Heritage (2007). Back
52
Amiom Locum/English Heritage, The impact of Historic Environment
Regeneration (2010). Back
53
British Tourism Framework Review (2009). Back
54
HLF/Visit Britain: Investing in Success (2006). Back
55
Jeremy Eckstein Associates, HHA Survey of Member (2009). Back
56
Parliamentary Question reply by Rt Hon Margaret Hodge MP (2009). Back
57
Jeremy Eckstein Associates, HHA Survey of Members (2009). Back
58
Heritage Alliance submission on DCMS Structural Reform Plan (2010). Back
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