Funding of the arts and heritage

Written evidence submitted by South East Dance (SED) (arts 17)

1. Introduction and Summary

1.1 Introduction to South East Dance and the South East region

1.1.1 South East Dance (SED) is the national development agency for dance in South East England. Our mission is to ensure a thriving ecology for dance in the South East, enhancing conditions for more, bolder and better dance. We aim to raise the profile of dance and work with partners within and beyond the region to achieve this. Artists and audiences are at the heart of all we do. Our aims are:

 

· To increase access to dance

· To increase participation in dance

· To raise the profile of dance

· To provide artistic and strategic leadership for dance

· To encourage learning and workforce development in dance

· To operate an effective dance organisation

1.1.2 During 2009/10, despite entering a period of organisational and artistic review where activity was reduced, SED reached 15929 people through its live and recorded work. In addition it engaged 246 professional artists whilst providing 1220 volunteering opportunities for young people. In the same year our film programme Forward Motion was presented in 12 countries securing 109 screenings and audiences of 4689 whilst raising the international profile and cultural capital of British arts work.

1.1.3 Achieving this level of activity would prove impossible without revenue funding distributed from central and local government by our core funders Arts Council England and Brighton & Hove City Council.

1.1.4 The South East region currently encompasses 19 county and unitary authorities and 55 districts. It is the third largest of the 9 English regions and is the most heavily populated with the highest percentage of inhabitants born out of the UK second only to London. The population of the region is growing faster than any other region, with a large percentage projected to be above the age of 50 by 2020. 80% of the region is classified as rural. Whilst the South East is perceived to be an affluent region, it also has pockets of deprivation with some of the most deprived areas in England within Brighton & Hove, Hastings, Southampton and Medway.

1.2 Summary of response to DCMS Inquiry

· Any spending cuts from central and local government will equate to less front line arts activity

· A mixed financial model, including central and local government investment, is essential in order to sustain the arts

· A carefully phased approach to central and local government cuts will be essential in order to avoid killing front line arts activity

· Many arts organisations are very effectively streamlined and therefore whilst some work can be done to develop shared services, the potential savings in this area are limited

· Arts organisations are not a homogenous group and therefore no one funding programme will fit all.

· The arts sector welcomes an Increase in lottery funds, however it should not be seen as an opportunity to reduce revenue funding provided by central and local government which is needed to ensure longer term stability and lever funding from other sources

· Businesses and philanthropists can have an important role to play as part of a mixed financial model, however more should be done to encourage investment to organisations beyond London.

2 Response to DCMS Committee Inquiry Questions

2.1 What impact recent, and future, will spending cuts from central and local Government have on the arts and heritage at a national and local level?

2.1.1 Less funding from central and local government will directly equate to less arts activity. This will result in fewer people engaging or experiencing the arts.

2.1.2 The mixed financial model for arts organisations in England has been central to its success. Using public investment to lever private investment or commercial return is essential to the arts ecology. In the event of significant cuts from central and local government, arts organisations such as SED could be forced to operate entirely as commercial concerns. Whilst SED recognises the opportunities presented by its commercial ventures, reliance on one sole model could place the organisation in a vulnerable position.

2.1.3 By operating as a commercial concern SED would be forced to provide arts experiences solely to those that could afford them. During summer 2010 SED worked in partnership with 6 sub regional hubs to provide strategic and artistic leadership in the delivery of Big Dance. The project provided free opportunities for over 8000 people to engage with dance regardless of age, ability, economic background etc. A reduction in funding from central and local government would make this project impossible to deliver.

2.1.4 Nationally, cuts will jeapordise the UK’s thriving, world-class arts scene. Relatively small amounts of public funding stimulate a creative mixed economy which accounted for 2 million jobs and £16.6 billion of exports in 2007. For every £1 that the Arts Council invests, an additional £2 is generated from private and commercial sources

2.1.5 Additionally, cuts will impact on the tourism industry, on regeneration and on the development of a cohesive and engaged society. Arts and culture are central to tourism in the UK, worth £86 billion in 2007. Inbound tourism is a vital export earner for the UK economy, worth £16.3 billion to the UK economy in 2008.

2.1.6 Cuts at any level will have an impact on the development and delivery of the arts in the UK. However a phased approach would ensure organisations have an opportunity to plan more effectively for the future and protect the ongoing delivery of frontline arts activity.

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

2.2.1 In 2009/10 SED undertook an artistic and organisational review in order to ensure that front line arts activity was provided to the best of its ability and with the most effective use of resources. During this process it reduced its core operational costs by 25% resulting in increased funds of over £100,000 being redirected to its programme of activity. SED is now as operationally streamlined as possible with administrative functions working to capacity in order to deliver activity.

2.2.2 In light of the process outlined in section 2.2.1 above, the benefits of shared services for SED would be limited. In order for this to be a useful exercise it would need to reduce its own activity, thus providing fewer opportunities for the public to engage with arts activity.

2.2.3 Arts organisations cannot be considered as a homogenous group. Each organisation has different operating models, financial models, activity plans, communication needs and resource needs. The notion of shared services and economies of scale in this landscape is complex. Whilst SED is actively exploring possibilities for shared services with other organisations, it believes the financial return would at best be limited.

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

2.3.1 SED urges the committee to be mindful that arts organisations are not a homogenous group. The optimum level of public subsidy will differ in response to a number of variables that might include; national profile, geographic base, art form focus, building/non building based. In addition activity will impact on level of subsidy. For example projects engaging ‘hard to reach’ young people are more labour intensive and expensive, but may be more valuable to society than working with those who can afford to contribute.

2.3.2 SED is committed to moving towards a ratio of 50% public subsidy. In the past it has secured £1 investment for every £1 of public funds (revenue and lottery). SED does not have a building and as such it can be flexible and fleet of foot as an organisation, responding to opportunity and demand as it arises. However, with this it loses potential to generate commercial income from dance classes, studio hire etc. SED is currently moving towards becoming a building based organisation and hoping to reduce its ratio of public subsidy to 30%.

2.4 Is the current system, and structure, of funding distribution the right one?

2.4.1 The current system of funding based on demonstration of artistic excellence, partner support, public benefit etc. with a mixed economy financial model works well for SED. We currently benefit from fixed term funding for a period of three years from Arts Council England and Brighton and Hove City Council. This enables us to act strategically and lever additional funds to work across the region with local partners. SED believes it is essential that any future model should provide the support for organisations to lay the foundations for long term plans and that a minimum of three years funding is required to realise this.

2.4.2 The current system has national, regional and strategic art form overviews built in. If this is lost (for example, funding becomes localised), strategic development could suffer, and funding could become less cost-effective.

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

2.5.1 SED welcomes the proposed increase in the percentage of National Lottery to the arts through sub section (3) (a) to 20%. L ottery funding has been central to our development as an organisation, often providing an injection when the organisation was entering a period of substantial/strategic change. Although we are not reliant on lottery funds, they have been increasingly important in adding value to our core programme, in turn having had a direct correlation to our ability to increase participation, enhance partnership working etc.

2.5.2 On behalf of a number of organisations we support who ar e reliant on lottery funding, we feel certain that this increased allocation will be welcome. Competition is currently incredibly fierce for funding, resulting in many high quality applications being rejected on the grounds of insufficient funds.

2.5.3 SED remains concerned that the proposed increase in lottery funding to the arts could be seen as an opportunity to reduce/replace revenue funding. Currently arts organisations are also facing cuts in funding from other public sources as well as increased competition for funding from other key sources such as trusts and foundations.

2.5.4 SED believes it to be entirely inappropriate to consider lottery funds as an alternative to revenue funds which provide organisations with an opportunity to plan strategical ly for the long term. There is a r eal danger that arts organisations strategic position and contribution to the arts would be weakened and they would be forc ed towards short- term projects if reliant on lottery funding.

2.6 Do policy guidelines for National Lottery funding need to be reviewed?

2.6.1 The criteria for lottery funds allocated to the arts are somewhat inflexible. If the criteria were to be reconsidered to include funding for extended periods of time or for core resource needs, this too would be a positive outcome of increased lottery funds.

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

2.7.1 SED believes that businesses and philanthropists can play a role in long term funding for the arts as part of a mixed financial model. However, this will mean a cultural shift which will take time and encouragement to develop. This funding will also need to be one income stream within a diverse income range, as reliance on one sole financial model would place the arts in a vulnerable position.

2.7.2 SED remains concerned that currently 70% of private investment is directed to the larger London-based arts organisations. If we develop a model that is more reliant on private investment, there is a danger the arts will become increasingly more centralised at the expense of regional arts provision. Similarly, investment opportunities are greatest for those organisations which offer high-profile corporate entertainment and marketing opportunities, meaning support for small to medium size operations would be less appealing. Those working at the cutting edge, within the community settings and supporting emerging artists are likely to find it far harder to secure investment.

2.7.3 SED would welcome the opportunity to engage with any initiatives that supported learning between arts organisations and businesses/philanthropists in order to increase investment to regional and local arts organisations.

2.7.4 SED believes that in a time of recession, support for smaller organisations from businesses and philanthropists is unlikely to materialise at the same rate as proposed central and local government cuts. To focus entirely in supporting the arts in this manner would be a flawed and high risk strategy that could result in irreparable damage to the arts.

2.8 Is there a need for more Government incentives to encourage private donations?

2.8.1 SED would welcome more Government incentives to encourage private donations. It considers this to be essential to exploit a mixed funding model where businesses and philanthropists have an increased presence.

August 2010