Funding of the arts and heritage

Written evidence submitted by the Royal Court Theatre (arts 86)

1) The Royal Court

The Royal Court is the UK’s leading new writing theatre. It stages up to 14 new plays every year across two theatre spaces, many of them world premieres, and has a world-renowned reputation for producing original, contemporary and challenging new plays.

Since it was established in 1956, the Royal Court has staged more new plays than any other theatre in the world. Many of these have gone on to become seminal classics - John Osborne’s Look Back in Anger and The Entertainer, Richard O’Brien’s The Rocky Horror Show, Sarah Kane’s Blasted, Caryl Churchill’s Top Girls, Polly Stenham’s That Face and Lucy Prebble’s Enron to name a few.

Jerusalem by Jez Butterworth was the smash hit of 2009: It swept the board at industry awards and enjoyed a 12 week West End transfer, a brilliant example of subsidised theatre feeding the commercial sector. A transfer to Broadway is planned in 2011, which will promote the best of British culture in America and bring revenue back into the UK. Jeremy Hunt MP cited Jerusalem in his keynote speech and commended the mixture of public and private investment that underpinned its germination and enabled its commercial life.

The Royal Court responds to more than 3,000 writers every year and is a hub of activity and support for new and emerging playwrights. It is the research and development wing of new writing in the UK and writers who began their careers here are produced regularly in major national and international venues – Joe Penhall, Mike Bartlett, Conor McPherson and Mark Ravenhill are just a selection of writers who started out at the Court and have since written for the National Theatre. The International Playwriting Programme also works in over 30 countries across the globe. Little of this work is income generating and is reliant on public and private investment.

In the financial year ending 31 March 2009, the Royal Court’s total income was £5.4 million. £2.2 million came from Arts Council England with the theatre raising a further £3.2 million through trading, fundraising and ticket sales. In percentage terms, income is broken down as:

- 38% income from Arts Council funding

- 21% income from box office income – no tickets are more than £25 and all tickets on a Monday night are £10

- 21% income comes from fundraising

- 16% from commercial activities and other public funding

2) Impact of proposed funding cuts

a) On the Royal Court

The Royal Court, like many UK arts organisations, survives and excels because of its mixed funding ecology. Regular and long-term funding from Arts Council England is essential to covering the running costs of the theatre and gives the Royal Court the opportunity and the remit to stage new work that questions, challenges and innovates. But it is critical to the success of the Royal Court that it raises a significant portion of its income from sales, trading and fundraising. In doing this, the theatre maintains a delicate and vitally important balance in its funding base, which is essential to ensuring artistic integrity and good overall management of the organisation. Additional income streams are already sought out and maximised and we take an entrepreneurial approach to West End transfers and other similar opportunities.

The Royal Court is a breeding ground for artistic talent and feeds theatre, film, radio and television. Stephen Daldry and Danny Boyle both worked at the Royal Court in the formative years of their career, as did leading actors such as Carey Mulligan and Matt Smith. Best known for finding and producing new writers, the Royal Court has also supported some of the UK’s leading directors now directing in theatres across the UK, including Terry Johnson, Jeremy Herrin, Bijan Sheibani, Joe Hill-Gibbins, Jamie Lloyd and Nina Raine. If the Royal Court’s income is cut, the theatre will have to produce less work, resulting in fewer opportunities for emerging talent, which would damage the whole of UK theatre as a result.

Businesses and philanthropists already play a long-term role in arts funding and from our conversations with current supporters it seems highly unlikely that this will increase significantly nor be able to cover the proposed reduction in Arts Council England funding. In fact the breadth of our work is a major factor in securing the level of philanthropic support we achieve. Tickets on a Monday night are subsidised in autumn 2010 through a sponsorship with French Wines, whilst Theatre Local – the Royal Court’s new venture in the Elephant and Castle shopping centre – was made possible by a major partnership with Bloomberg. More still can be done by Government and the sector to promote philanthropic and charitable giving amongst the wider UK population and to explain and simplify Gift Aid rules. American fundraising is fed by tax incentives and structures, which do not exist in the UK, and further investigation into these possibilities, would be beneficial.

b) On Arts and Heritage

The impact of the funding cuts will be far-reaching and destructive for the following reasons:

· Artistic innovation and experimentation, essential to a thriving arts and cultural climate, will suffer as organisations have greater dependency on private philanthropic sources, which are more likely to stipulate specific grant restrictions or conditions

· A reduction in core funding will almost certainly lead to staff cuts or redundancies; yet, paradoxically, the government’s expectations are that arts organisations need to increase fundraising income - which will necessitate more fundraising staff. If projects are cut because of cuts in funding, then there will also be fewer opportunities to fundraise for. Staff and resources are already thinly spread and the average salary in subsidised theatre is significantly lower than other voluntary organisations and the commercial sector

· Arts organisations will have to compromise the number of productions on stage / exhibitions per year, with falling income affecting the creative industries’ economy as a whole. The creative industries are one of the most profitable areas of government spending - British theatre generates over £2 billion annually for the UK economy, is a magnet for tourism and in London alone last year generated £76 million in VAT on tickets

· Commercial theatre, media and film will also suffer – over 40% of all plays in the West End in 2009 started in the subsidised sector (e.g., Jerusalem, Enron, War Horse) and of the 187 Academy Award nominations given to British nominees, 145 of them went to people who started their careers in subsidised theatres/arts organisations

· It is well documented that participation in the arts is of great benefit to health, education, regeneration and community cohesion; cuts in government funding will compromise these programmes, having a much wider social, educational and economic impact

The proposed return to the founding principles of the National Lottery’s "good causes" (which included the arts) will only part-cover the loss in proposed government funding cuts and furthermore only do this from 2013, post Olympics. In order for small and medium organisations to benefit from Lottery funding, the application process and grant management processes must be radically changed and simplified. Most arts organisations have very small fundraising teams and it will be difficult to manage complex funding arrangements with such limited resource.

3) Collaboration in the Sector

In answer to the Select Committee question on what arts organisations can do to reduce duplication of effort and make economies of scale, it is essential to understand that theatres and arts organisations already collaborate prolifically.

The Executive Directors of several London-based venues meet regularly to share ideas and best practise, whilst there are networks and forums to encourage exchange between fundraising and marketing departments across the theatre sector. Similar networks exist in other arts forms too. In this way, information is shared amongst organisations, duplication in practice minimised and opportunities for collaboration maximised.

Further collaboration is being pursued by the Royal Court and our peers, including the National Theatre. For example, many arts organisations are too small to have their own experts on employment law or Information Technology and it may be possible to broker the purchase of professional advice more cheaply between several companies; there are other back office functions where resources could also be pooled.

4) Summary

There is an understanding and acceptance of the plan for a reduction in public investment and the Arts do not expect to be treated as a special case. However, the planned phasing of the reduction in investment levels is crucial if we are to avoid devastating a thriving industry. We support the Arts Council England view that first year reductions should be minimised in order to give this sector the best chance of continuing to deliver the wide range of benefits it has achieved for the population as a whole and the profile of our nation across the world.

September 2010