Funding of the arts and heritage

Written evidence submitted by Luton Culture (arts 60)

Summary

· The impact in the most negative scenario could be significantly reduced services and potentially large numbers of redundancies.

· However, if they are targeted strategically and gradually, reductions could have positive implications in encouraging arts and heritage organisations to come together in more collaborative, creative and efficient ways

· Careful consideration needs to be taken of how the responsibilities of MLA are picked up in order to ensure resources are targeted effectively at frontline delivery

· The new Renaissance model must not waste the learning and positive developments that have been successful over the last seven years and must not sweep away positive hub partnerships where they have transformed their areas. These partnerships could take on some of the MLA responsibilities – indeed some of the hubs have already been doing this since the MLA restructure a few years ago.

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

For ourselves, as for many other cultural organisations, spending cuts will affect us at a range of levels, both via grant cuts from the local authority and funding from national bodies such as MLA and the Arts Council. The impact in the most negative scenario could be significantly reduced services and potentially large numbers of redundancies. However, if they are targeted strategically and gradually, reductions could have positive implications in encouraging arts and heritage organisations to come together in more collaborative, creative and efficient ways which could save significant amounts of money over the long term while sustaining – and possibly even improving – our outcomes for the public. That opportunity will be wasted if dramatic cuts are made over a very short period of time. If the reductions in spending come in one blow and are not phased over a sensible longer term, my fear is that many will be back to running on a skeleton staff that just manages to keep the doors open.

Cultural organisations have been relatively well funded for the past decade and this has allowed much of the sector to develop work in areas to support national and local priorities such as community cohesion, health, learning, economic development etc. Many arts and heritage organisations are already exploring how to use what they have learned over the last years to change their business models to sustain themselves in different ways through commissioning, new collaborations and partnerships, co-location of services and so on. Unfortunately, although many cultural organisations are ready to take up this challenge, often commissioning is not sufficiently developed at a local level and so those opportunities are simply not yet there to be exploited.

In terms of the impact on ourselves specifically, Luton Culture is a relatively new charity (less than three years old) and currently relies on our local authority grant for 72% of our £6m budget and other public funding (MLA / Arts Council) for another 12%. Our vision when the charity was formed was to move to a 50% local authority / 50% other funding model over a ten year period. Clearly the timing of the cuts is not good for us as we have not yet reached that level of independence – and as a charity that runs mainly free services (libraries, museums and our outreach activity) building up self sustained income through secondary spend etc cannot happen overnight – particularly when the individuals are generally cutting back on their spending.

Renaissance in the Regions has transformed the museums sector over the last seven years and we await news of what the new model will look like, what the level of funding is likely to be and over what period of time the transition to the new model will take place. The hub partners in the East fo England are clear that the hub structure has worked extremely effectively in the region. There are certainly areas for improvement but the most effective way to herald the next phase of Renaissance will be to build on what works already. The East of England hub picked up many of the responsibilities of MLA when it was streamlined a few years ago which significantly lessened the impact of the cuts on the museums sector. With MLA due to close in 2012 the hub would be in a positive place to take that further at a much-reduced cost (see Q7).

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

Cultural and arts organisations need to be working more closely together and to consider mergers and different models of working to meet the current challenges. They need to be open to see the opportunities to make economies of scale to become more efficient. Unfortunately, political barriers and the bureaucracy of local authorities still hamper them from being bold and coming together to embrace Total Place solutions.

As referred to above, if reductions in spending are phased with incentives for organisations to come together either by merging or to run shared services, this could be a significant opportunity to improve the efficiency of the sector. In many areas, ours being one, there are relatively small local authorities each running their own libraries, arts and museums. Coming together under one sub regional agreement, charitable trust or social enterprise model would enable large savings while sustaining or even improving the offer to the public. But this is still a step too far for many authorities to countenance and our fear is that, if funding cuts are both deep and immediate, many cultural services and organisations will instead wither and die.

It may also be an opportunity for arts and heritage organisations to work across their sectors at a local level. At Luton Culture we’ve discovered tangible benefits in being a charity that runs libraries, arts and museums both in terms of efficiency of scale for the back office operations but also in sharing skills and resources which is supporting us to become more than the sum of our parts.

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

On the one hand Luton Culture embraces the need for arts and heritage to be more independent, self-sustaining and imaginative in their work. This underpins our vision as a charity and was Luton Borough Council’s aim when we were set up in March 2008. However, and it is a large however, much of the work that is integral to supporting our communities through learning, positive activities and working with people to explore and instil a sense of place and identity is something that must remain a core free offer at the point of delivery. (Our trading activities support this core work but still to a very minimal degree.) Indeed, the core work of cultural organisations is even more critical in times of economic hardship so public investment in them has to continue if the arts and culture – and by that we include free access to books, computers, libraries and museums – are not to be denied to the less well off and cultural activity reverts to being the preserve of those who can comfortably afford it. However that does not mean that we conserve in aspic every cultural outpost and cultural organisations need to look carefully and strategically at their operations in order to remodel them to meet the challenge.

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

The current system differs of course for individual organisations depending on their governance. It is clear that local authorities will be looking at fewer directly delivered services and those that remain in-house will most likely be the key statutory ones. However, whether it is directly or indirectly, via core grants or commissioned services, local authorities must continue to be key investors in the heritage and arts organisations who serve their populations. Better and clearer SLAs with cultural organisations to deliver their outcomes are critical – as are longer term funding agreements that allow for redress if the organisation is not performing but gives cultural organisations the stability of resource to plan and manage their priorities and resources effectively. Otherwise organisations spend a disproportionate amount of time chasing funding and their people on short term contracts are constantly on the look out for longer term roles that will give them better personal security. None of this serves the sector well and even more importantly does not help it to focus on the key outcomes that its communities and funders require.

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

The additional funding for lottery distributers is very welcome. However, the funding is often for capital or smaller revenue programmes so cannot replace core funding. Moreover, most lottery grants require match funding, much of which comes from the public sector. There is already serious concern that good projects and programmes underway or in the pipeline are in jeopardy because of the loss of the match funding element and this issue needs to be addressed.

6. Whether the policy guidelines for National Lottery funding need to be reviewed

I don’t think that they need a huge overhaul. Bearing in mind my previous comment regarding the concern over match funding from public sources these guidelines could be reviewed. However, I think it is still critical that there is a match funding element from applicants to demonstrate their commitment to the programmes that they are being supported to deliver – and from local authorities where the project or programme enhances their locality and / or quality of life for residents.

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

The impact really depends on what organisation takes over MLA’s and the Film Council’s responsibilities and how they operate. As mentioned above, when MLA restructured and became more streamlined a few years ago, the impact on museums was minimised because the museums hubs took on much of the advice and support role that MLA had formerly given. With the museums hub structure also potentially ending this could be a significant gap. A clear plan must be made and communicated in good time to allow effective transition and it would be sensible to base this on those hubs that have worked well under Renaissance with potentially the core museum model used in areas where it has not.

With regards to libraries, the Advisory Council on Libraries which advised the Secretary of State about library and information services has also been abolished leaving a further gap in advice and support for cultural provision.

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

The simple answer is yes but clearly philanthropic and corporate giving are not a panacea to replace public funding – certainly not in the short term. Philanthropy in the UK is underdeveloped compared to the US and will need sustained work to develop it over the medium to long term.

Moreover, cultural philanthropy in the UK is largely based around support for capital projects, when the most urgent need for cultural organisations is revenue funding. Encouraging existing philanthropists away from a desire to support very visible, high kudos projects is key if they are to support the long-term sustainability of the sector.

Substantial encouragement will also be required to increase the number of cultural philanthropists if philanthropy is to make any substantial impact at both a national and local level. Increasing the numbers of people who identify themselves as philanthropists could be achieved through a campaign highlighting that relatively modest single donations can make a considerable difference to small and medium sized cultural organisations. Also, encouraging the idea of local cultural philanthropists might be effective – and would closely align with Big Society principles. A successful business owner, for example, could have significant impact as a donor in a defined area and could therefore understand their own potential as a local philanthropist, whereas they might not be able to identify with the concept of a national / international philanthropist.

9. Whether there need to be more Government incentives to encourage private donations

This would be useful. A good model is the scheme run by Arts and Business during the late 1990s which provided match funding for projects which attracted sponsorship from businesses that were first-time sponsors of the arts. Greater promotion of Gift Aid (and all tax effective donation schemes) and legacy giving would also be valuable.

September 2010