Funding of the arts and heritage

Written evidence submitted by the West Yorkshire Playhouse (arts 06)

Executive Summary

· The UK Cultural Sector is one of, if not the most, valuable and successful globally and a significant driver of the national and regional economies

· This success is due to the diversity of the sector, its mixed funding model and the efficiency of arms length funding bodies

· Significant cuts in state funding cannot be made up from private sources

· Significant cuts in state funding will have serious consequences for arts organisations and therefore UK economy and society

· Recommendation is for the Government to have a rigorous, evidence based approach to cultural policy and the current mixed model of funding with arms length funding bodies to be left intact

· First person testimony

1. Economic and social impact of UK Cultural Sector

There is a tendency to view the Cultural Sector and its sub-set, the Arts, as an essentially frivolous and luxurious past-time which is ‘nice to have’ but has little importance to the economy or health of society. The facts suggest otherwise. In the UK the Cultural Sector has enjoyed significant growth (6.6% 1999-2003), attracts highly skilled and innovative workforce, enables more cohesive, creative communities and is a significant segment of the economy. The UK heads the Organisation for Economic Co-operation and Development’s (OECD) league table for the Cultural Industries with between 3 – 6% of Gross Value Added to the economy. Even just looking at the figures for ‘the Arts’ (music, visual and performing arts), the UK heads the league with 0.5% GVA as opposed to the US 0.3% or France 0.2%. In the UK this puts the Cultural Sector ahead of manufacture of food, real estate and computing in its overall contribution to the economy. In 2003 the figure for exports from the Cultural Sector (excluding software) was £7,700million. The UK also leads the OECD league table in terms of level of attendance or involvement in cultural activities and time spent on average participating or engaging with a cultural activity. The importance of the Cultural Sector is demonstrated in its use as part of regional regeneration schemes. Culture 10 in Newcastle Gateshead (2000-2007) supported 50 world and UK premieres and the opening of nine new cultural institutions along with a programme of community engagement. Through Culture 10 tourism has become a key component of the region’s economy accounting for about 10% of jobs and reversing a ‘brain drain’ of skilled workers from the region. This programme was supported by a mix of state (Arts Council), regional, European and private funding. This effect is not confined to the larger urban areas. The net economic impact of just six local festivals and events in the local authority area of Kirklees (West Yorkshire) is assessed at £1.9million.

2. Benefits of mixed funding economy and arms-length funding

In the UK on average public (including state, local, Lottery) funding makes up 50% of cultural organisations funding, with earned income at around 30% and private the remaining 15-20%. At West Yorkshire Playhouse 40% of our income (£2.5million) comes from state funding, and the remaining 60% from earned and private income. This contrasts with around 70% state funding in France, up to 90% for major arts organisations in Germany and a tiny proportion of state funding in the US. The UK is more successful, as measured both in engagement with culture and in economic impact, than the largely state funded model (France, Germany) AND the largely private funded model (the US). In levels of per capita state funding the UK does come out just ahead of France and Germany and a long way ahead of the US: about £12 per person per year as opposed to £11.50 in Germany, £9.50 in France and 34p in US. However, when regional funds are added in (7million Euros in Germany) state funding in the UK is considerably less for a greater impact. An equivalent sized theatre in Graz, Austria, has a turnover of 22million Euros (of which 80% is state subsidy). West Yorkshire Playhouse has a turnover of £6million pounds. The theatres produce roughly the same number of productions per year, with the Austrian theatre producing far less community and education projects. In the UK where costs and efficiency of the Regularly Funded Organisations are rigorously examined by the Arts Councils, Local Authorities, Boards and Charity Commission, arts and cultural organisations are more efficient with a greater proportion of turnover going into making art than bureaucracy.

3. The Role of Philanthropy

The total figure for private investment, including business sponsorship, individual giving and trusts and foundations, for the UK in 2008/09 was £653.5million. But the amount given varies wildly between art form and region. Of that total figure £527.2million was in London, Scotland and the South East leaving just £126.9mill for the rest of the country. Across art forms, £347.5mill going to the sector covered by the Arts Councils with Heritage and Museums making up the rest. The Arts Councils’ total budgets are roughly £734.79mill. This means that a 25% cut across their budget (£183.70mill) would require a 53% increase in private investment to make up the shortfall. To translate this into how it would affect West Yorkshire Playhouse and theatre in Yorkshire:

· The total Arts Council Yorkshire funding for Regularly Funded Organisations in Theatre is £7.32mill;

· A 25% cut would be £1.8mill;

· The total private investment in Theatre in Yorkshire is £1.3mill;

· So private investment would have to go up by 138% to make up the short fall.

Quite simply, it isn’t going to happen. An ambitious but reasonable expectation is that private investment may be able to grow by around 10% annually. A cut in the order of 25% in the Arts Council budget will shrink the sector, probably damaging its ability to raise funds from the private sector. Philanthropy can only in this context be seen as additional to, not a replacement for, state funding.

4. The Impact of Reduced Funding

This paragraph will deal specifically with theatre, and this theatre in particular, as the potential impact can be very different across different art forms. The performing arts, including theatre, are a particularly labour intensive art form. On a typical production here around 75% of direct costs go on people and only 25% on materials. This makes it hard to reduce costs. The obvious reduction is in number of actors and the average size of casts has been driven relentless down for decades from about 10-15 in the 70s/80s to somewhere around 4 – 6 now. Theatres are not overstaffed, in many cases relying on much volunteer and intern labour to make up for lack of paid staff. Cutting material costs may not help overall, as the set, costumes and props are part of the package people buy so it would be difficult to charge the same ticket price for a show with no physical production at all. So costs may go down but then so would income. While digital innovations can and will improve the performing arts through reaching and interacting with a greater range of audience and diversifying the artists and means by which art is made, they cannot ever significantly alter the production model. At the heart of the performing arts is the inalienable experience of one group of people performing and another watching. As it is not possible to ‘salami slice’ cuts of 10-25% out of individual production budgets, cuts would mean losing 10-25% of productions. If this happens across the whole sector the inevitable consequence is that theatres will close, some temporarily, some permanently. Closed theatres means the audience will diminish, leading to a vicious cycle of decreasing income and production. This will have far reaching effects. Outside of London there is no such thing as a wholly commercial cultural sector. Commercial companies such as design and marketing firms depend upon the subsidised sector for a large part of their business. Even inside London the commercial sector depends on people, innovation and product from the subsidised sector. A severely reduced subsidised sector will severely reduce the economic and social impact of the whole Cultural Sector.

5. Recommendations

The funding model for UK Arts and Heritage works very well. It produces some of the best art and cultural attractions in the world, is attended by a large, diverse and growing audience, and contributes to local and national economies, for a very small administrative cost. The Cultural Sector enriches communities; in tangible ways through employment, training, creation and retention of skilled workers, and tourism; and intangible through great community identity, cohesion, education and experiences that cannot be had anywhere else. While it is acknowledged that the Cultural Sector will not be exempt from funding cuts, it is strongly recommended that the cuts are not taken as an opportunity to dismantle the system of funding. The funding model we have is world class. To put it bluntly: it isn’t broken; please don’t try to fix it.

6. Testimony

The above figures attempt to give a snapshot of the economic value of the Cultural Sector and the effectiveness of the current funding model. It cannot capture the true value of the Arts for communities and individuals; it cannot measure the joy of a young person helped to feel part of creating something for the first time, or an older person treasuring a memory or the pleasure of escaping into something beautiful. The following first person testimony, taken from a response to a blog on arts funding and the subsequent discussion, tries to give a sense of this intrinsic value.

· Just a thought.

Reading through this (substantial) discussion there seems to be an occasional misapprehension made by some of you.

The arts are not just for the middle-classes.

My friends and I are from working class families, most of us came from the same 'rough' ( we thought it was alright) estate, lived in council houses and went to an average state school.

We love theatre.

Now I am talking just about theatre here (and indeed it seems that all the arts have been thrown into the same bag...which is perhaps not helpful)

Our drama teacher took us to see a piece of new writing- a play that seemed to be talking about our lives, our situation. Relating with the characters on stage was a thrill, more so because we were sharing the experience with the rest of the theatre audience. That actor/audience relationship simply cannot be reproduced in any other art form (Certainly not film, tv etc . and definitely not the internet, as some here have suggested, which is a very lonely medium)

Because of that play we decided to create our own similar work, at GCSE. It was a piece that allowed us all a chance to express ourselves in a way we could never have before.

This was not outreach or educational work... It was just a play. A play we paid to go watch and it was worth every penny.

Importantly it was a play that might not have been produced if it relied on private funding. The fact is that businessmen are not (usually) artists, they may enjoy art but it is not there job to create it, to consider and develop it. As such they will most likely feel more comfortable supporting work that they feel they understand or would personally enjoy.

This does not allow for experimentation or development. Nor does it allow for art that represents people who do not have the disposable income to support it.

I am the only one of that group of friends who has gone on to pursue a career in theatre. The others are mechanics, teachers, office workers etc but they will still come to the theatre with me...they're not all massive theatre fanatics but they enjoy it and can afford it because its FREE with the Arts Council's Night Less Ordinary scheme.

One last thought, my mum is a nurse and yes she would definitely love more money but she loves nothing more than going to see the ballet. It maker her SO VERY happy:

Sometimes watching a thing of beauty is enough to make everything else seem ok.

And sometimes watching something that makes you think just a bit differently may change your life for the better.

Surely a form which might inspire such positive change deserves a little support from that state?

As I say, just a thought.

August 2010