Funding of the arts and heritage

Written evidence submitted by Orchestras Live (arts 82)

Executive summary

· Sustained public investment in the arts has been maintained for the past 15 years. Public investment in the arts is extremely small in relation to overall public spending.

· An erosion of that public investment will immediately undermine the positive effect it has had over the past 15 years.

· The maintenance of both central and local Government funding for the arts is essential.

· Private funding cannot replace a shortfall in public funding for the arts – they are mutually dependent.

· The role of national organisations like Orchestras Live in coordinating national programmes for arts distribution is effective in reducing duplication of effort and achieving economies of scale.

· The maintenance of Arts Council England as an internationally acknowledged, expert and independent public body for the distribution of public funding of the arts is essential.

· The Government’s proposed changes to the distribution of National Lottery funds are welcome.

· Relatively small amounts of public funds are proven to lever significant private and commercial investment. The UK’s mixed economy model of arts funding is both unique and effective. It also reinforces the function of public subsidy as a lever for additional funding (on a ratio of 1:2) and has also helped to underpin the success of Britain’s creative economy over the past ten years.

1. Introduction

1.1 is the national development agency for professional orchestral music, working intensively in partnership with local authorities and other promoters throughout England. Our mission is to inspire, motivate and empower the widest range of people through excellent professional live orchestral music.

1.2 In 2009/10, Orchestras Live supported activity which reached over 83,000 people. This was achieved through support for more than 304 events in partnership with 69 local authorities and other promoters across England. These events involved 37 professional orchestras and included formal and informal concerts, concerts for children and families, community and education projects ranging from half-day workshops to year-round residencies.

1.3 Orchestras Live is pleased to submit evidence to this important inquiry as a long-standing recipient of public funding from Government via Arts Council England. Orchestras Live works in partnership with 69 local authorities throughout England and has since 1986, through its predecessor body the Eastern Orchestral Board, established a very successful track record in using central Government funding to lever local Government and other funding to support the delivery of excellent professional orchestral programmes for communities that do not have regular access to this work. Public subsidy is an essential source of income for arts organisations like ours and the inquiry raises some important questions, the conclusions of which will have a significant impact on the future health of the arts and heritage sector.

2. 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?

2.1 The Arts in England are a success, underpinned by 15 years of sustained investment, including the introduction of the National Lottery in 1994. Furthermore the arts budget is very small in comparison to other areas of public spending. It currently costs around 17p per week per person. And for every £1 of public money that is invested in the arts, a further £2 is generated from commercial and private sources – a ratio of 1:2.

2.2 An erosion in the current public funding base both locally and nationally will undo the beneficial effects of the positive pattern of sustained investment over the past fifteen years

2.3 In many arts sectors, the relationship between central and local Government funding is an essential component towards a successful and balanced funding ecology. Our own organisation, Orchestras Live has a successful track record in using central Government funding (from DCMS via the Arts Council) to lever significant additional local authority funding. In the last financial year (2009/10) our Arts Council funding of £815,000 yielded an additional £362,000 in partnership funding, of which £262,000 came from approximately 60 local authorities, working in partnership with us across England.

2.4 The unique model which exists in the UK between public funding and private and commercial support is one in which the balance is mutually dependent. A reduction in public funding on either a national or a local level will inevitably create an income shortfall which the private and commercial sector will struggle to restore.

2.5 As an inevitable consequence the range, activity and output of arts organisations will reduce. However, fixed running costs including overheads and salaries are likely to stay at their current level. And the arts sector as a whole will cease to offer the current ‘value for money proposition’ expressed as a ratio of fixed costs to output that it does now.

2.6 Orchestras Live is representative of many arts organisations in that its impact is considerably greater than its size. The skills, experience and expertise that underpins our partnerships across England are located in our small staff team of six. The maintenance of that team is essential to ensure the ongoing successful delivery of our work on a national scale. In common with other arts organisations of our size we have comparatively limited options to accommodate spending cuts.

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

3.1 Obvious examples are the sharing of administration services, particularly in the areas of finance and human resources.

3.2 There is also scope for the greater exploitation of digital resources to create economies of scale and to drive down costs, particularly in the areas of marketing and publicity.

3.3 Policies for joint procurement for services, particularly among larger-scale arts organizations will be important; for example the recent collaboration between a number of large-scale London based arts organisations on a joint energy procurement plan which drives down the unit cost to each and offers greater value for money.

3.4 An issue which is of particular relevance to Orchestras Live is the co-ordination of national programmes which promote greater access to and greater and wider distribution of excellent art, particularly to communities and parts of the country away from large urban centres of population where the access to quality art is limited. Orchestras Live Concerts delivers the best of the UK’s chamber orchestral programmes to 28 promoters throughout England whose audiences would not normally have access to this work. In this year, working through strategic partnership with professional orchestras and promoters, we will co-promote 57 concerts by 18 professional chamber orchestras across 7 English regions with an emphasis on programming the work of living composers and newly commissioned work. The national co-ordination that we bring to this work avoids duplication of effort and delivers economies of scale where one concert programme can be repeated in other parts of the country.

3.5 Orchestras Live Concerts is just one example of this kind of activity. In the classical music sector, the Sheffield based organisation, Music in the Round delivers a similar model for chamber music. And more widely in the music sector, funding for consortia of promoters (for example, Music beyond the Mainstream) has enabled international large-scale world music to be shared among a community of promoters delivering significant economies of scale and maximising the partnership between arts organisations

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

4.1 The evidence of the last fifteen years shows that the current levels of public subsidy with annual allowances for inflation are necessary to retain the positive momentum of the last fifteen years. As for the sustainability, the average cost of public funding for the arts per person is just 17p per week – a very small proportion of overall public spending. The argument for the sustainability of that investment is further reinforced by the level of return where for every £1 of public subsidy, a further £2 is generated through private and commercial sources.

4.2 Moreover the link between public subsidy for the arts and commercial return is now proven. Public subsidy for the arts plays a vital role in the evolution of talent within the creative industries, which are an essential component of the future competitiveness of British business and are acknowledged as our best route out of recession. Between 1997 and 2006 the creative economy grew faster than any other sector, accounting for 2 million jobs and £16.6 billion of exports in 2007.

4.3 To further support the sustainability argument, the position of the arts and heritage sector as one of the ‘crown jewels’ of UK society foregrounds the role of the sector as a prime lever for incoming tourism in the UK. Arts and culture are central to tourism in the UK, worth £86 billion in 2007 3.7% of GDP and directly employed 1.4 million people. Inbound tourism is a crucial earner of exports for the UK economy, worth £16.3 billion to the UK economy in 2008 .

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

5.1 The Government’s commitment to ‘arms length’ funding presumes that the retention of the Arts Council as a non departmental public body remains a priority. Put simply, if the Arts Council didn’t exist, then Government would need to establish a similar body to ensure the independent distribution of public subsidy to the arts sector without political influence.

5.2 Arts Council England is recognized worldwide as an exemplar body for the distribution of public subsidy for the arts. It has the authority and expertise to represent the arts sector and to advocate for its ongoing vibrancy and health.

5.3 Furthermore funding from Arts Council England acts as an endorsement and an indicator of high quality. This stamp of approval is proven to lever partnership funding from the private sector and philanthropic sources, particularly private charitable Trusts and Foundation s.

5.4 Through its recent consultation – Great Art for Everyone – which set out Arts Council England’s ten-year vision for the Arts, the Arts Council advocated the introduction of more flexible funding arrangements for the Arts. These proposed measures are welcome and should deliver a less hierarchical and more fit for purpose mechanism for funding the arts.

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

6.1 We understand this question to relate to the Government’s proposals (recently opened to public consultation) to restore the balance of distribution of National Lottery funds to their original good causes of the arts, sport and heritage. If enacted, the effect of these changes will be positive. Specifically, an increase in the share of lottery funds for the arts will mean that arts organisations will be able to increase the impact of the delivery of their priorities, in particular in relation to broadening their reach and delivery of education projects in addition to their core activity.

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

7.1 There have been historic issues over the restrictions governing the use of National Lottery funding which in the past have inhibited strategies to combine Lottery and Treasury funding in the most cost effective way. Policy guidelines for National Lottery funding should be reviewed to ensure that they are sufficiently flexible for its investment to work strategically, effectively and flexibly alongside Treasury funding.

8. 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;

8.1 Currently the impact of these changes remains unclear. Our concern would be that of those DCMS arms length bodies that remain, the Arts Council is not expected to assume responsibility for the work and activity of either the abolished Film Council or the MLA.

8.2 Recently the Arts Council has evolved into a strong, efficient, outward looking organisation. It has amply demonstrated its commitment to drive down costs while maintaining the quality and effectiveness of its advice, support and expertise.

8.3 Any expectation therefore from Government that the Arts Council should assume additional responsibilities without additional resource would compromise the core mission of the Arts Council and undermine its success over the past fifteen years in championing the arts in England.

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

9.1 The UK is renowned for its unique mixed model of arts funding. The evidence of the last 15 years confirms that small amounts of public money work hard to stimulate a mixed economy culture that is internationally acknowledged and which delivers a real return for the country both in economic terms, and in terms of quality of life and the cohesion of society and communities

9.2 In the UK, a modern and progressive model for cultural organisations has been developed which brings together public funding and private enterprise. However the model is finely balanced and if public funding is significantly reduced, the knock-on effect will be profound and the private sector will not be in a position to make good reductions in public funding.

9.3 In the current economic climate, the maintenance of public funding for the Arts is more important than ever. Commercial and philanthropic organisations will be facing financial challenges. This is particularly true of the Trust and Foundation sector in the UK which relies upon the performance of large capital funds as the means to support their grant giving to arts organisations. It would be a dangerous assumption to make that commercial and philanthropic giving could replace reductions in public funding for the arts.

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

10.1 As we have previously stated, the award of funding from an independent national funding body with proven artistic knowledge and expertise such as the Arts Council is already proven to be an effective incentive which levers funding from the private sector and philanthropic sources.

10.2 We would advocate reform of the current structure of the HMRC Gift Aid scheme to make it more user friendly for individual giving to the Arts.

September 2010