Funding of the arts and heritage

Written evidence submitted by Birmingham Museums and Art Gallery (arts 29)

1. Summary Bullet Points

· The reduction in public sector funding for museums and heritage will result in a diminished sector, a reduction in consumer choice and in the quality of management of significant cultural assets held in trust. Though the economic situation makes retrenchment inevitable, strategic decisions need to be made about what is lost and what sustained.

· If the proposed levels of reductions come into force it will take a considerable length of time to recover to existing levels of provision.

· There are undoubted opportunities to create economies of scale through working collaboratively – if there are sound and practicable business reasons, common objectives, shared ethos, which ensure partnerships are functional and effective.

· A coherent national strategy is needed for the museums sector to guide decisions about allocating resources and prioritising provision. There will be a need to determine how this is lead and delivered.

· Policy guidelines for National Lottery Funding should be reviewed and include consideration of the need to provide revenue funding along the lines of the Arts Council, Revenue Funded Organisations (RFO) system.

· With the abolition of the MLA and the need to determine how its areas of responsibility are managed in future, emphasis should be placed on ‘how’ programmes and functions are managed in addition to ‘who’ does so to ensure greatest energy is given to delivery and disproportionate levels of monitoring and administration are avoided.

· The grouping of Museums, Libraries and Archives together has not to date been entirely effective in encouraging joined up thinking/working and the principle should be reviewed.

· Tax breaks and other financial incentives will be critical to increasing the potential for philanthropic giving. It will be important for local and national Government to retain appropriate levels of investment in the arts and museums and seek to work in partnership businesses and private funders to enable stable funding regimes to flourish.

2. Birmingham Museums and Art Gallery (BMAG) is one of the largest local authority funded services in Europe. The present service, established in the latter part of the 19th Century was founded on the principles of philanthropy, civic pride and entrepreneurialism reflected in the museum’s motto ‘By the gains of Industry we promote art’. The service currently comprises seven listed buildings including the main Museum and Art Gallery in Chamberlain Square, Aston Hall, one of the finest examples of a Jacobean domestic architecture surviving in the UK, and Soho House, former/18th C home of Matthew Boulton – one of the foremost industrialists and patrons of the arts of his day. The service holds well in excess of 800,000 items in its outstanding collections of fine and decorative arts, archaeology and historical material that are recognised as being of national and international significance.

2.1 The service welcomed over 850,000 visitors to its sites last year and over 3 million people viewed items from its collections on loan to international museums. Birmingham is the lead for the West Midlands Renaissance hub and was most recently one of the two acquiring partners of the Staffordshire Hoard ensuring that this outstanding historic discovery remained in the West Midlands. Birmingham City Council has made significant investment in the service over the previous ten years which has in turn encouraged investment by HLF and other funders in excess of £50 million. It is estimated that the service accounts for £16 million per annum in secondary spend by its visitors.

2.2 The service will be significantly affected by all areas to be examined by the Culture, Media and Sport Committee.

3. 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?

3. Current and future/predicted reductions in funding will have a profound and long-term impact on the UK’s cultural landscape and infrastructure. With most cultural organisations having already seen core budgets reduced over time, it is clear that many smaller and moderate size arts/heritage organisations will be forced to close. Others will face reduced opening hours, and need to consider entrance charges in order to maintain services. The reductions will diminish the UK’s arts and heritage sector which will in turn impact on the country’s economy, in terms of both its tourism and workforce.

3.1 BMAG for example is facing significant reductions in its LA core funding and is consequently reducing the range of public services it delivers in areas such as education, family and community cohesion programmes. Delivery of previously free public services such as temporary exhibitions and provision of education programmes are now reliant on charging in order to be retained, this will present a barrier for many families on low incomes as well as culturally diverse audiences, something that is particularly important in a city such as Birmingham.

3.2 A significant reduction in staffing (the largest overhead) within museums/heritage organisations is inevitable, with an associated loss of professional expertise and experience. This will impact on standards of management of primary assets - collections and buildings, the provision that stems from these, and also the potential for attracting the support of commercial and private sponsors, donors and additional funding from trusts/charities etc. Current and future budget cuts will affect future generations’ access to and understanding of their cultural heritage.

3.3 BMAG has until recent times enjoyed a period of growth supported by investment from both the local authority and the Renaissance in the Regions programme, which accounts for between 12 – 14% of the service’s income since the beginning of this funding stream. This investment has been invaluable and hugely effective in developing and improving service provision and resulted in audiences increasing year on year, enhanced education provision and community engagement. It has enabled the service to become highly effective in levering in additional funds, over £20 million last year including a significant HLF contribution. Renaissance investment has created extra capacity to enable and deliver major capital developments/improvements projects as well as enhanced day to day service provision.

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

4.1 Governance, management and operational structures are key areas that many cultural organisations will be forced to review as a result of current and impending budget cuts. Arts/heritage organisations however governed may need to consider merging, where applicable become less reliant on local authority funding and more effective at levering in support from other funding sources.

4.2 Closer partnership working between arts and heritage organisations is essential if the quality of museum and arts programmes is to be sustained. At BMAG costs for temporary exhibitions and public engagement programmes have been significantly reduced through working in partnership with other publicly funded or independent arts organisations. Museums and arts organisations with the venues for cultural provision but without the budgets to fund programming, will need to work more closely with non venue-based arts organisations seeking a public platform for their work. Museums and arts organisations will need to be more flexible about how their venues are used, becoming more adept at hiring out space to other arts/other organisations as a means of both income generation and maintaining a strong cultural offer.

4.3 Museums and galleries are already exploring opportunities for jointly developing and managing collections as long term partnerships, sharing the costs of management and storage whilst also jointly exploring related commercial opportunities. Such is the model developed by Birmingham Museum and Art Gallery and the Potteries Museum & Art Gallery in relation to the recent acquisition of the Anglo Saxon Staffordshire Hoard.

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

5.1 Sustaining public subsidy is critical. Though many museum/arts/heritage organisations have made significant progress in working more entrepreneurially, public subsidy is crucial to enabling income generation. Determining appropriate funding levels is complex, and needs to take account of such factors as the scale/scope and significance of assets held, geographical location of organisations, population served, local economic environment and how this impacts on income generating potential.

5.2 In the case of most of the largest regional museums services the two most critical funding streams are the funding provided by the Local Authorities and the DCMS Renaissance in the Regions funding. LA funding for museums, arts and cultural provision will inevitably be squeezed as council’s prioritise statutory services. However, there is a case for Government/DCMS articulating the significant and highly tangible value (economic and intrinsic) of cultural provision in terms quality of life, place-making, education and skills, tourism and the visitor economy and encourage LAs to take a strategic approach in sustaining financial support at appropriate levels. Likewise it is critical that Renaissance in the Regions funding continues, and is recognised by DCMS to be a core funding stream and an essential element of public subsidy for the sector. In the case of BMAG it has been crucial to maintaining and maximising service provision across a range of areas – curatorial, educational and interpretative etc. commensurate with the size and significance of its sites and collections. BMAG makes a key contribution to the local and regional economy through the services delivered.

6. Whether the current system, and structure, of funding distribution is the right one?

6.1 The current system of funding provision for the arts and heritage is enormously complex, given the multiplicity of funding sources. A diversity of funding sources and funding streams is not necessarily a disadvantageous position. In the museums sector there are significant variations in the levels of national and local government funding provision for nationals, regional, independent, university museums etc. as well as considerable variations income generating ability and capacity. A national strategy for museums encompassing a review of current funding systems would help enable a more strategic approach to emerge.

6.2 Within the museums sector, the current lack of clarity regarding the shape and scope of Renaissance funding, together with clarity on how the funding will be administered in future presents difficulties in forward-planning, and impacts on maintaining partner funders and stakeholders confidence. However, the principles of funding a ‘Core’ group of museums and the envisaged ‘Challenge’ fund and ‘Museum Development’ will result in more effective use of resources and support partnership working.

7. What impact the recent changes to the distribution of National Lottery Funds will have on arts and heritage organisations?

7.1 We welcome the Government’s proposals to restore the percentage of lottery funding going to each of the Arts and Heritage sectors to 20%.

7.2 The bulk of our funding applications go to the Heritage Lottery Fund who we consider to have been very effective in processing and distributing grant aid with minimal bureaucracy.

7.3 However, it would seem beneficial to review the grant programmes and application processes. For example, with regard to the HLF, one change that we would like to see would be the creation of a medium sized grant programme of say, up to £500k. We feel the current system whereby everything above £50k counts as a major award does not address the need for a medium-sized grant stream. The net result is that it is equally onerous to apply for a grant of £200k as it is for one for £2m.

7.4 We would also encourage consideration of a single stage application for grants under £1m given the added bureaucracy of a two stage system.

7.5 Longer-term revenue funding programmes for both Heritage and Arts lotteries should be introduced to ensure that the products of capital investments are maintained and the best value is delivered to users.

8. Whether the policy guidelines for National Lottery Funding need to be reviewed?

8.1 We are content with the policy guidelines for the Heritage and Arts Lottery Funds.

8.2 As stated above, most of our suggested improvements are concerned with the scope of the various programmes and the application process.

9. 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?

9.1 Whilst the Museums, Libraries and Archives Council has played an important role in the implementation of Renaissance in the Regions since 2003, the success of Renaissance has primarily emerged from the participant museums enhanced capacity to provide improved, high-quality services to users and the positive outcomes of that delivery on people’s lives. ‘How’ the programme is managed in future rather than ‘who’ does so is the most critical factor. The focus will need to be – minimal bureaucracy and maximum attention to front-line delivery.

9.2 However the MLA did play a role in setting strategic direction and ensuring that museums worked more closely with each other and with other key partners. It is therefore important that in any process of transition, strategic direction and partnership working can be maintained. New mechanisms whereby regional museums communicate and plan strategically on common issues and have the most productive relationship and partnerships with the national museums will be essential.

9.3 Appropriate consultation and dialogue is needed about where the functions MLA has managed transfer to in future (Renaissance, AIL, National Security Advice, Government Indemnity etc). An ‘Arts Council’ solution for some or all elements would require this organisation transforming in character, ethos and raison d’etre etc. Some, but by no means all museums are arts organisations.

10. Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level?

10.1 Museums undoubtedly have the potential to work more effectively with businesses and philanthropists for the benefit of their users and society in general. As is the case with BMAG, many museum services building and collections were founded and developed through collaborations between philanthropists and ‘local authorities/public funding bodies’. As public funding increased over time, input from private philanthropy reduced. Finding the ways and means to achieve an effective balance of public, private and business sector support is a critical objective.

10.2 BMAG has begun a programme, supported by the MLA, to develop its relationship with the business community and build capacity to be more consistent and strategic in fundraising. This has resulted in increased sponsorship on a small scale, and a more marked increase in levering in funds from various funding bodies. The programme (and funding support for this) has enabled BMAG to build the skills and capacity within the organisation to make this progress. It is still the case that many museums service lack the capacity, skills and resource to move in this direction.

11. Whether there needs to be more Government incentives to encourage private donations?

11 The foundation of Birmingham’s outstanding collections is largely the result of donations of valuable and significant works of art and attest to the importance of philanthropy in this regard. The Museum was also built with the support of wealthy local business people who wished to ensure that the people of Birmingham had access to fine quality collections, a wish that is expressed succinctly in the foundation stone of the gallery ‘by the gains of Industry we promote art’. Our experience is that the donation of significant gifts by individuals in the form of money or art/historical items is now the exception rather than the rule. Likewise there has been a decline in bequests over time. The museum does however receive generous support through long term loans of significant and valuable works of art which enhance the overall quality of the collections on public display – also a form of philanthropy to include in this arena.

11.1 There are a range of tangible incentives and reforms that would aid and encourage private giving including – lifetime legacies, reforms to Gift Aid, donor recognition together with a campaign or ‘education programme’ which encourages not only high-net worth individuals to consider becoming philanthropists. Consideration should be given to ways the Government could ‘incentivise’ volunteering as this is a highly valuable resource within the arts and museums/heritage sector. BMAG for example receives significant support from it’s Friends organisation and through individual volunteers.

11.2 Government incentives to encourage private donations could also be brought about through directing that elements of the funding it allocates to the arts, museums, heritage sector develops skills and capacity in this area.

11.3 If individuals and businesses are to be encouraged to support arts and culture even more proactively, they will expect to do so in partnership with and not instead of local and national government funding.

August 2010