Funding of the arts and heritage

Written evidence submitted by the Department of Culture at Manchester City Council (arts 95)

Summary:

· Given the relatively small scale of many arts and heritage organisations, there is limited capacity to absorb cuts without significant impacts for both artistic and education programmes. While there may be scope for some restructure the savings would not be achievable soon enough to prevent long term damage to their delivery.

· Arts organisations are already working towards collaboration. This could lead to a more robust approach to funding and deliver better value in the long term. However a period of transition is needed to safeguard the infrastructure and prevent the loss of valuable knowledge and skills.

· Public funding is an essential part of the mixed economy.

· The moves to rationalise the range of funders is a positive one, provided specialist expertise and important investment programmes and professional standards are maintained. There is also a need to introduce greater flexibility so that new initiatives can establish while securing long term investment.

· The intention to increase the Lottery funds available to the arts and heritage is welcomed.

· National Lottery Policy should allow the opportunity for early recipients to return for funds.

· While the government has announced the abolition of some DCMS arms-length bodies, it is not yet clear how or if the functions of these organisations will be placed with other organisations. Sector specific investment is essential to continue and sustain existing improvements and the new arrangements will need to include this capacity.

· The private sector both corporately and individually have been active supporters of the arts and heritage over a long time. The extent to which this can be seen as a major plank of investment in future business models is however questionable.

· Tax incentives along with increased public recognition may improve the number and scale of private donations. However donors would not respond well if their generosity resulted in withdrawal of public subsidy.

Main response to key questions:

1. 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;

1.1 Both capital and revenue spend on arts and heritage comes from a range of sources. Recent requirements for in year savings and indicative savings for future years are putting pressure on both capital development and future planning and operations.

1.2 The in year spending cuts that have been applied to date have been in two main areas:

1.2.1 Cuts to project funding both capital and revenue which have been allocated to arts and heritage activity but not formally contracted. This includes funding via the Northwest Regional Development Agency (NWDA) which will have a significant impact on the realisation of major cultural capital projects and on the ability to match funding already secured or to be applied for from Lottery distributors. Manchester's ability to stage and attract major cultural events and exhibitions together with the marketing of these to attract national and international visitors and profile is critical to the city's tourism economy and international image. These impacts are both cultural and economic. To date this work has been supported by the NWDA.

1.2.2 Cuts to the revenue funding of arts and heritage organisations and activities. These have been generated through in year cuts applied to the NDPBs and to regeneration funds via Area Based Grant which have been passed on to organisations, many of which are small independent charities. The in year cuts to date have been manageable, however predicted future reductions will be far more damaging.

1.3 Over the last ten years and alongside a previous period of capital investment enabled by the National Lottery, Manchester has seen a massive improvement in the quality, scale and diversity of its cultural offer. This was accelerated through successful delivery of the Commonwealth Games. The City can now confidently claim to have world class orchestral, theatre and museum provision and a rich ecology of practice across a wide range of artform areas.

1.4 We have been tracking development over this period and can demonstrate the visits to cultural and recreation facilities reached in excess of 42 million in 2008/9, a 400% increase since 2000/01, with 91% of residents report that they use cultural and recreational facilities. Over 18,000 educational visits and 25,000 employment opportunities are generated and tourisms contribution to the economy reached £1,165million in 2009/10 with over 6.5 million overnight visits to Manchester.

1.5 This development is under serious threat if the indicative cuts are implemented. We have calculated the annual investment in arts and heritage to be in the region of £38.5 million pounds via NDPB (£14 million), local authority (£10 million), central government (£6.5million), university (£4million), other regional and sub regional public bodies (£2.5million) and other sources (£1.5million). This demonstrates the majority of existing funding is from public bodies which will all be facing a 25 – 40% reduction over the next 4 years. This will inevitably result in a minimum reduction of investment in arts and heritage in the region of £10million. Given the relatively small scale of many arts and heritage organisations, there is limited capacity to absorb cuts without significant impacts for both artistic and education programmes. While there may be scope for some restructure, the savings would not be achievable soon enough to prevent long term damage to their delivery. It is expected that a disproportionate negative impact will be experienced in both the quality of artistic programming and ongoing work with communities.

1.6 Local Government’s own services and its ability to grant aid others will also be seriously affected.

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

2.1 Arts organisations are already working towards collaboration. Manchester can demonstrate best practice in relation to its Museums where Renaissance in the Regions has enabled joint working and mutual trust across the City's main museums. This has resulted in joint marketing, particularly external promotion to visitors; capacity building including awareness of environmental impacts and shared working in the delivery of education programmes. There is potential to further develop this collaboration to achieve better value from investment and to generate some savings. This can only be achieved if the commitment to Renaissance or similar funding is sustained to enable this transition.

2.2 Manchester City Council and the Arts Council as joint funders are working at a strategic level on ways of enabling closer working between arts organisations and how to develop intelligence about the wider ecology and interdependence of activities. This could lead to a more robust approach to funding and deliver better value in the long term. However a period of transition is needed to safeguard the infrastructure and prevent the loss of valuable knowledge and skills.

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

3.1 There is ample evidence of the impacts of arts and heritage activities in a number of areas including educational attainment aspiration and skills, community pride, health and wellbeing as well as the obvious benefits to the economy. Manchester has demonstrated that the arts and heritage assets of a city are fundamental to economic growth. The city’s recent research into future talent attraction has indicated that the existence of a vibrant cultural offer is a significant factor in attracting and retaining talent. A sustainable arts and heritage sector is made up of a number of layers of activity attracting a mix of local, regional and national audiences and delivered through a spectrum of individual artists and organisations.

3.2 Public funding is an essential part of the mixed economy of many organisations if they are to continue to invest in innovative work and public education. Both of the activities are key to fuelling the tourism and the creative and digital economy.

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

4.1 The current system, structure and funding distribution demonstrates a high level of accountability and transparency and has been reformed a number of times. Manchester would welcome a more strategic approach to investment, aligned with the city’s stated Cultural Ambition. The moves to rationalise the range of funders is a positive one, provided specialist expertise and important investment programmes and professional standards are maintained.

4.2 There is also a need to introduce greater flexibility so that new initiatives can establish while securing long term investment in the fundamental building blocks and core institutions.

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

5.1 The intention to increase the Lottery funds available to the arts and heritage is welcomed and will require a review of funding aims and objectives to ensure that grant regimes recognise the new economic environment and build on good practice to date.

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

6.1 Lottery investment has transformed the cultural landscape since the mid 1990s, both in terms of capital and project investment. The quality and standards of the physical environment need to be sustained through the opportunity for early recipients to return for funds to refresh their buildings. Continued work on ensuring access to the arts and heritage is also essential, such as the exemplary work of the Young Roots programme.

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;

7.1 While the government has announced the abolition of these organisations, it has not yet described how or if the functions of these organisations will be placed with other organisations.

7.2 The UK Film Council has supported the network of local film offices which have helped to build the film and television economy across the UK and have enabled areas of the country to promote themselves on screen. Manchester wishes to see this work continue, recognising the positive effect of location filming on the local economy. The Film Council also distributes lottery funds for film and supports independent film exhibition and festivals. Independent cinema and film is an important part of the arts and heritage offer and while it may not require a separate funding body, the support for film production and presentation should be sustained.

7.3 The MLA has performed an important role in transforming local authority cultural provision across museums, libraries and archives. It also sets and monitors professional standards for the care and stewardship of the nation’s heritage. Its support for the development of regional museums through Renaissance in the Regions has been hugely successful, and needs to be continued. The MLA has also provided valuable advice and support for the professionals working in the sector leading to improvements in the curation and public access to our heritage. Sector specific investment is essential to continue and sustain these improvements and the new arrangements will need to include this capacity.

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

8.1 The private sector both corporately and individually have been active supporters of the arts and heritage over a long time. This is evidenced in the role that they play in the governance of arts and heritage organisations, in sponsoring programmes and participating in Friends and Patrons schemes. The extent to which this can be seen as a major plank of investment in future business models is however questionable. Outside London there are limited numbers of high networth individuals and few company head offices. While improvements could be made in relation to tax incentives, including in life gifts of works of art to public collections, these initiatives could only enhance and not replace significant public investment.

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

9.1 Tax incentives along with increased public recognition may improve the number and scale of private donations. However donors would not respond well if their generosity resulted in withdrawal of public subsidy.

September 2010