Written evidence submitted by the Department
for Culture, Media and Sport (arts 210)
1. 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
This Government has sought to protect front
line artistic and cultural provision wherever possible. The recent
in-year cuts to cultural budgets were focused on back office and
lower priority functions. Arts Council England Regularly Funded
Organisations, for example, received only a 0.5% reduction in
their budgets. Any future changes in funding will adhere to the
same principle of protecting front line cultural provision as
far as is possible. The impact of any changes will also depend
on other changes at local government level, the response of the
sector in further increasing self-generated income, changes to
the National Lottery good cause allocations and the fostering
of philanthropy. It would, therefore, be wrong to attempt to predict
the impact now, particularly as the outcome of the Spending Review
will not be known until 20 October.
2. What arts organisations can do to work
more closely together in order to reduce duplication of effort
and to make economies of scale
This Government would encourage any co-operative
work between arts venues, in sharing knowledge, equipment and
expertise in order to save money and increase efficiency. There
are undoubtedly areas of duplication within publicly funded cultural
organisations and we would encourage our Non-Departmental Public
Bodies to take the lead in encouraging the organisations they
fund to take advantage of the benefits shared services can bring.
We welcome Arts Council England's emphasis on regularly funded
organisations taking on a greater role as art form leads, which
should provide the support structure for this to happen and also
the work done by the National Museums and Galleries, English Heritage
and CABE to share and collaboratively procure some back office
and service functions.
3. What level of public subsidy for the arts
and heritage is necessary and sustainable
This Government firmly believes in public support
for culture, supported by self-generated income and philanthropic
giving. We believe public subsidy should be at a level that allows
the cultural sector to operate in a sustainable way; that is why
we continue to protect front line artistic provision wherever
possible. The Spending Review will set the level of public subsidy
for the cultural sector from 2011-12 to 2014-15 and we cannot
pre-empt the outcome of that process.
4. Whether the current system, and structure,
of funding distribution is the right one
This Government is committed to the mixed funding
model with funding coming from Government, from earned income
and from other sources including sponsorship and philanthropy.
We are always looking at ways in which we can improve the distribution
of funding, as seen with the changes currently being made to our
arms length bodies. We also welcome the changes to funding schemes
that Arts Council England have recently consulted the public on,
including replacing regularly funded organisation status with
partner organisations and specific programme funding. This should
provide a more flexible way of providing funding to organisations
and individuals, reflecting the differing roles they play in the
sector and how they can best contribute to delivering public policy
objectives.
5. What impact recent changes to the distribution
of National Lottery funds will have on arts and heritage organisations
"The Coalition: Our Programme for Government"
states that this Government will reform the National Lottery so
that more money goes into the arts and heritage, and also sport.
We propose that the arts, heritage and sport should each be increased
from 16.66% to 20% of the funding that goes to good causes, restoring
the shares they received when the National Lottery was set up.
In order to protect the voluntary and community sector funding
through Big Lottery Fund, whose share would be reduced from 50%
to 40%, we propose to stage the change, with the shares for arts,
heritage and sport increasing to 18% on 1 April 2011, and then
to 20% on 1 April 2012. A public consultation on this was run
by DCMS between 21 May and 21 August 2010 and the responses are
currently being analysed. Taking account of the consultation responses,
we propose to introduce an Order to Parliament in the autumn.
This Government believes that, in line with
the principle of "additionality", that Lottery funds
are additional to core Government spending, funds should go to
causes that would not otherwise receive funding. It is important
and accepted that the Lottery funds arts and heritage among its
good causes, sectors which are crucial to the well-being and quality
of life of the public.
Arts and heritage currently receive, together,
around £500 million each of Lottery income a year, although
amounts are currently reduced because of the transfers towards
the London 2012 Olympic and Paralympic Games, amounting to a total
of £322 million from the arts and heritage together over
a period of five years from 2008-09 to 2012-13. These amounts
are dependent on ticket sales and so vary from year to year, but
income has increased and current projections are healthy.
Excluding the effect of the Olympic transfers,
the Government's change would mean around £100 million a
year extra for arts and heritage combined. In cash terms, therefore,
taking account of the additional funds available to arts and heritage
distributors after the Olympic transfers end, the increase will
be greater. Under current projections, the arts and heritage together
can expect to receive the following income, year by year:
APPROXIMATE CASH AMOUNTS BASED ON CURRENT
PROJECTIONS
| 2010-11 | 2011-12
| 2012-13 | 2013-14
|
| Arts | £200 million
| £220 million | £285 million
| £315 million |
| Heritage | £200 million
| £220 million | £285 million
| £315 million |
6. Whether the policy guidelines for National Lottery funding need to be reviewed
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Policy Directions to the UK and England distributing bodies
(which are currently Arts Council England and the UK Film Council
for the arts good cause and the Heritage Lottery Fund for the
heritage good cause) are issued by the Secretary of State. These
Directions set the broad framework within which the individual
Lottery distributors work and the distributors are required to
take them into account. In line with its support for the principle
of "additionality", the Government has no plans to change
the system whereby funding decisions are entirely for the distributing
bodies to make.
The existing directions to UK and England arts and heritage
distributors have been in place since 2007 and those for Arts
Council England and Heritage Lottery Fund include the following:
— Fundamental principles of the Lottery as it was
set up in 1994, and which the Government has no plans to change,
including the need for an element of partnership funding or contributions
in kind from other sources; for projects to be for a specific,
time-limited purpose; and for projects to demonstrate financial
viability; and where capital funding is sought, a clear business
plan to show how running costs will be met.
— The need to involve communities in making policies
and spending money, foster local community initiatives, and support
volunteering, in line with the Coalition Government's proposals
for the "Big Society".
— The need to ensure all areas of the country have
access to funding.
— The need to assess the needs of the arts and heritage
and the priorities for addressing them.
— The need to ensure that those receiving Lottery
money acknowledge it using the common Lottery branding so that
the public know where Lottery money has gone.
Where there are structural changes to the Lottery distributing
bodies, new policy directions will be issued to successor bodies.
In the arts and heritage area, the Government has proposed the
abolition of the UK Film Council and is considering the role and
remit of the Heritage Lottery Fund.
We continue to look closely at the current directions for
the Lottery in respect of arts and heritage and how they can deliver
the Coalition Government's priorities. The Government will consider
issuing new or amended policy directions in any good cause if
it is appropriate to do so, as has already been the case with
Sport England, for a specific issue relating to Olympic legacy.
The Department is currently consulting on a proposed new policy
direction to the Big Lottery Fund.
7. 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
DCMS is responsible for a network of more than 50 public
bodies and one of the priorities of the Secretary of State has
been to examine DCMS's network of public bodies critically with
the aim of improving accountability, transparency and value for
money.
This forms part of the work being undertaken across Government,
and led by the Cabinet Office, to restore proper accountability
for activities funded by public money. Public bodies which do
not meet one of the three tests outlined will be bought back into
departments or devolved if their function is necessary or abolished
if not. This work will reduce the number of public bodies, increase
the transparency and accountability of the remaining few, and
ensure more effective delivery of public services.
As a result of this review, the Secretary of State announced
on 26 July his intention to make a number of changes that included:
— the abolition of the UK Film Council;
— the abolition of the Museums, Libraries and Archives
Council (MLA);
— the merger of UK Sport and Sport England;
— the merger of the National Lottery Commission
and Gambling Commission (subject to a business case); and
— the abolition of the Advisory Council on Libraries
and the wind up of the Legal Deposit Advisory Panel.
We will continue to explore further opportunities to improve
the accountability and coherence of our public bodies landscape.
The details and timing of the proposals announced on 26 July
are still being finalised and are subject to discussions with
the parties involved. Any necessary legislative changes will be
made through the Cabinet Office Public Bodies Bill, which is due
to be introduced in the autumn.
Where bodies are to be abolished we will look to transfer
key functions to other existing bodies so as to continue to support
our sectors and preserve the necessary expertise. In the case
of the Film Council, for example, this will include their current
responsibilities for those key mechanisms that support the industry
including the film tax relief, which is worth more than £100
million a year, which will remain in place and Lottery funding
for film which is set to increase because of the changes this
Government intends to make. We are now considering options to
transfer the distribution of these Lottery funds to other existing
bodies, with a view to reducing administrative costs; and we will
maintain key priorities such as strengthening the sustainability
of the UK film industry and support its diversity. We will maintain
a strong relationship with the British Film Institute which plays
an important role in our cultural heritage. We are discussing
with the BFI setting up a direct, less bureaucratic relationship
with DCMS.
The decision to abolish the MLA was taken by DCMS in order
to focus on front-line services, and to reduce costs and the number
of its public bodies. The MLA's key functions such as providing
strategic leadership for the Museums, Libraries and Archives sectors,
administering the Renaissance programme, library improvement work
and carrying out statutory functions for cultural property, will
continue and will be transferred to other organisations. The DCMS
is working closely with the MLA to ensure that the transfer of
these functions takes place smoothly.
8. Whether businesses and philanthropists can play a long-term
role in funding arts at a national and local level
Philanthropy and business support are key elements of the
mixed funding model for culture in this country. Some of the most
iconic and enduring cultural institutions were established through
the generosity of philanthropists and private individuals, from
the National Trust to the British Museum, from Tate to the public
libraries across the country endowed by Andrew Carnegie and John
Passmore Edwards.
This support continues today, and is a vital strand of the
mixed funding model. For example the support for the Cultural
Olympiad by Premier Partners BT and BP, and Panasonic. Enlightened
businesses have demonstrated corporate social responsibility through
their support for cultural activity and while this has in some
cases been understandably constrained through the recession, we
hope and believe corporate support for the cultural life of the
nation will grow as the economy recovers.
The Government recognises the profound generosity of donors,
whether individuals, businesses or trusts and foundations across
society. The £655 million of private sector support for culture
in 2008-09 formed a key element of the overall funding framework,
alongside public funding from central and local government, National
Lottery support and commercial revenue. We believe businesses
and philanthropists will continue to play a vital role in funding
the arts and heritage over the long term, alongside public funding,
not replacing it and they deserve our thanks and appreciation
for so doing.
9. Whether there need to be more Government incentives
to encourage private donations
It is right that Government should play a role in seeking
to incentivise private donations to culture. Philanthropy should
not replace Government funding but Government must take an holistic
approach to public support for cultural activity and the broad
range of business models pursued across the sector. Government
needs to provide leadership and pursue a long-term strategy in
pursuit of its public policy objectives, while working in partnership
with the sector and other funders. Philanthropists also demonstrate
leadership, strikingly so in the case of the recently announced
Giving Pledge in the United States, and our aspiration for the
Big Society is that all members of the public will embrace charitable
giving and decide which charities to support, in their communities
and nationally.
Incentives come in many forms and donors have multiple motivations
for their philanthropy, so Government should be cautious about
being overly prescriptive, but we believe it is right that people
should take informed decisions about charitable giving. We recognise
there are occasions on which giving can be incentivised by the
tax system, but tax measures also carry costs and it is right
that the Chancellor should have primacy in that aspect of taxation
policy. Government also has a role to play in ensuring effective
giving and that the highest proportion possible of any charitable
donation goes to the primary purpose for which it was intended.
Transparency and value for money are as important to charitable
giving as to any other area of public policy.
We must not lose sight of the fact that while the act of
philanthropy can be an end in itself, giving pleasure to the donor
as well as to the recipient, or creating a legacy which may endure
beyond the donor's lifetime, it is just as importantly a means
to an end. The creation, curation, performance and dissemination
of great art, and the preservation of our national heritage for
future generations, is the fruit of philanthropy. If we can enhance
that public benefit through more incentives to encourage charitable
giving, we should do so.
September 2010
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