Funding of the arts and heritage

Written evidence submitted by UK Music (arts 94)

About UK Music

UK Music is the umbrella organisation which represents the collective interests of the UK’s commercial music industry - from artists, musicians, record producers, songwriters and composers, to record labels, music managers, music publishers, and collecting societies.

UK Music consists of:

Association of Independent Music representing 850 small and medium sized independent music companies;

British Academy of Songwriters, Composers and Authors with over 2,200 songwriter and composer members;

BPI representing over 440 record company members;

Music Managers Forum representing 425 managers throughout the music industry;

Music Producers Guild representing and promoting the interests of all those involved in the production of recorded music – including producers, engineers, mixers, re-mixers, programmers and mastering engineers;

Music Publishers Association, with more than 250 major and independent music publishers representing close to 4,000 catalogues;

Musicians Union representing 32,000 musicians;

PPL representing 42,000 performer members and 5,000 record company members;

PRS for Music representing 70,000 songwriters and composers and music publishers.

Executive Summary

· In the short term, cuts in support for the arts will lead to less support for artists and musicians to develop their talent; and fewer opportunities for audiences to be enriched from artistic experiences.

· In the longer term, a significant reduction in public support for the arts could lead to a diminution off the range and quality of the UK’s music culture overall.

· UK Music believes that the system and structure of funding could be improved and we make specific recommendations.

· Businesses and philanthropists can and do play a long-term role in funding arts but are not a substitute for public subsidy.

· The Select Committee invite comments on the abolition of the Film Council. UK Music admires many of the achievements of the UK Film Council and sees the benefits that a strategic body can bring to a sector with growth potential.

Full Report

Impact of cuts

1. UK Music is the umbrella organisation that represents the collective interests of the UK’s commercial industry. Within our membership are those who are heavily reliant on public support for the arts. Public support for the arts inevitably affects the size and strength of the commercial market. The relationship is usually symbiotic.

2. While many individual musicians, performers and composers develop their careers without recourse to public funding or support, the wider music infrastructure in the UK is underpinned by a rich mix of public, commercial, private, charitable and philanthropic interests.

3. Many of the artists and musicians who do seek and receive public support for their work do so at the early, pre-commercial stage of their career with the expectation that they will go on to become commercially successful. In such cases, the public investment provides essential seed funding. For example, some musicians, performers and composers may seek a grant to enable them the opportunity to develop a reputation, track record or fan base. This may be the enabling investment that propels them into commercial success.

4. Music that might be considered experimental or cutting edge at its first airing can, over time, become considered more mainstream and attract large followings. In this way, too, public support for the arts can help give oxygen to music before it is commercially viable.

5. Many other talented artists and musicians are able to sustain viable careers through a combination of public support and other sources of funding and earnings. This may be particularly true for artists working in classical genres and other genres outside mainstream popular music. In such cases, the public investment contributes towards a rich and diverse music culture.

6. UK Music fears that a reduction in public support for the arts, particularly a severe reduction, would in the short term adversely affect creative individuals because they would have fewer opportunities to develop their talent, some of whom may have tremendous artistic potential. Our members are concerned that many of the funding cuts so far have been applied within a short or immediate timeframe. Effective funding for the arts is a long-term process because it takes time to develop artists and engage audiences.

7. For example, any reduction in the public subsidies available to music organisations will almost certainly reduce the amount of copyright music they can programme, with serious implications for classical music publishers. Publishers are already witnessing the fact that performing groups and venues are less able to programme strong seasons and/or programme effectively into the future, which impacts hugely on freelance musicians and composers. 

8. The funding of classical contemporary commissions is already in danger of becoming the province of private resources which is unhealthy from a cultural point of view since less-well-known composers stand a better chance of support from public funding.

9. Public subsidy for the arts gives life to art forms that otherwise would not exist. In the longer term, we fear that a significant reduction in public support for the arts would adversely affect the whole music culture in the UK by reducing the range and quality of musical opportunities available to creative talent and to audiences.

10. The benefits of public investment often exceed the value of the initial investment, and the benefits outweigh the costs. The UK has earned a world-renown reputation for its art and its inhabitants enjoy a spectacular range of cultural offerings. Our cultural provides millions of people with experiences that are thought-provoking, enriching, challenging, joyous, uplifting, uniting. Nicholas Sarkozy famously set out in pursuit of how to capture happiness in GDP. Perhaps the UK should do the same.

11. The multiplier effect is also true in reverse, in that the impact of cuts in public investment can be more damaging than the initial cut would suggest, as the knock on effects are felt further down the line.

12. We suggest that strategic approach to deficit reduction would take into consideration the impact that cuts in arts funding might have on tourism, which the Prime Minister identified as a future driver of economic growth.

Funding structures and efficiencies in public subsidy

13. Earlier in 2010, UK Music published Liberating Creativity, which set out our vision for the next decade. One aspect we considered was public sector support for music.

14. We acknowledged that a great deal of public money is allocated to a number of funding bodies such as regional development agencies, the Arts Councils, Business Link, NESTA, and the Olympics. Each of these public bodies is tasked in some way with supporting creativity, economic growth, or enterprise and innovation.

15. The music industry should in theory benefit from these bodies’ spending as a potential high-growth sector brimming with creativity and enterprise. But we do not have a sense of how that public investment is strategically impacting upon us as a sector.

16. There is a lack of clarity regarding how public expenditure earmarked for innovation, enterprise or creativity translates into strategies for growing the music sector. Such difficulty might be overcome if the Government and public bodies were more explicit about intended purpose, outcomes and beneficiaries of their investment decisions at the outset.

17. For example, when the aim of public investment in music is to stimulate economic growth to create wealth, that aim should be spelled out, and the outcomes should be measureable. For example, the music sector would like to be able to assess what impact the regional development agencies have had on the music sector in each region.

18. When public money is spent on music initiatives which promote social objectives such as furthering the inclusiveness agenda or widening opportunities, that objective should be made clear.

19. Funding bodies should also be explicit about whether their investment in music is intended to promote non-commercially viable but culturally valuable expression.

20. When the strategic objectives are clear at the outset, the role that the commercial sector might play could be more apparent. There may be some areas where the music industry should have systematic input into the allocation of public sector funding in order to increase the value of those funding initiatives. There should be no ideological barrier to public funds being channelled through the private sector in order to meet public policy goals.

21. Arts Council England funds over 150 music organisations and provides development grants to many more. The Arts also work with specialist funders like the PRS for Music Foundation to develop schemes which respond to music sector needs. However, despite some very successful schemes in place, the funding currently allocated by the Arts Councils has developed into a complex ecology. Many in our industry would like to see the Arts Council make the distribution of funding more transparent, and the application process more accessible for those groups more unfamiliar with how to engage with the public sector.

22. Local government, too, are subject of our recommendation on public spending. The best local authorities employ an arts officer to implement a carefully thought-out arts strategy and make inspired use of their own assets – property and spaces – to encourage a thriving music and arts programme in their locality. We would like see all local authorities emanate the best.

23. Premises represent a very significant element of many arts organisations’ costs and there may be scope for some degree of rationalisation in this area. Public investment in premises to house multiple arts organisations in various centres across the country could be a pragmatic and cost effective solution. In addition, the very fact of arts organisations working in close proximity to each other will enable them to find economies of scale in their operational costs that would not otherwise be possible. Furthermore such proximity could be beneficial from a cultural and creative point of view and result in some innovative work inspired by partnerships that organisations may not otherwise have contemplated. Examples of successful cultural hubs to date include the Sage Gateshead and Somerset House in London.

The role of businesses and the private sector

24. The Brit Trust and the PRS for Music Foundation are notable examples of industry funded charitable arts development. As with most private funds, they will not be able to invest more as public funding reduces. The demand for sponsorship already greatly exceeds what is able to be supported.

25. As the PRS for Music Foundation points out, private foundations will be faced with difficult decisions about whether their smaller grants can be safely awarded to organisations which lose their core funding from public sources which is often key to their sustainability. If smaller private foundations consider their funding to be safest with the organisations which the public sector has decided to back, the diversity of the UK’s most pioneering music providers may be at risk

26. Commercial music businesses and their trade bodies have a long history of engagement with publicly funded music initiatives and view such involvement as an investment into the future of the music.

27. Government should analyse the system of tax reliefs designed to stimulate investment in innovation and R&D within the context of the creative industries.

Impact on changes to arms-length bodies

28. UK Music sees the benefits that a strategic body can bring to a sector with growth potential. We admire many of the achievements of the UK Film Council.

29. The UK Film Council has not only championed British film and TV production but it has secured tax and regulatory advantages which make the UK an attractive place for all aspects of film production. In particular London now enjoys a special worldwide reputation for film and TV post-production services which generates valuable income for the British economy.

30. Furthermore the use of a peer specialist review system to determine the most culturally appropriate allocation of public funds is tried, tested and workable. Funding decisions for film need to be properly informed and consequently there needs to be an equivalent arm’s length organisation to carry out this function on behalf of Government.

31. We believe these achievements are due in part to the focus and energy that a strategic body can bring when its entire raison d’etre is realising the sector’s growth potential and securing its long-term future.

32. We are all too aware from our own history and experience of the inherent dangers in a piecemeal, fragmented and short-term approach to problem-solving, just as we are aware of the advantages of a coordinated, strategic and long-term approach.

September 2010