Funding of the arts and heritage

Written evidence submitted by Modern Art Oxford (arts 112)

Summary Points

1. The recent announcements of proposed spending cuts to arts and heritage organisations carries the inevitability of closure to many cherished organisations and the risk of turning the clock back twenty years on the level of investment needed to support a robust sector.

2. Art and Heritage organisations understand they are not immune to cuts given the present climate, but oppose indiscriminate cuts to a sector that has continued to demonstrate an ability to grow and add both intrinsic and economic value year on year with the most modest of public investment

3. Arts and Heritage organisations are prepared to plan for change in their business modelling with a clear, thought through timescale that sets realistic goalposts. Immediate and drastic cuts give little opportunity for arts organisations to change and respond to the new environment.

4. Planning for change demands a clear timetable from DCMS and the Exchequer on plans to encourage philanthropic giving through tax incentives. As yet little information or commitment is forthcoming which leads to lack of confidence from potential patron support and undermines international competitiveness for investment. In addition, the greatest lever to private philanthropy is the endorsement that comes with public funds.

5. Equally, DCMS needs to indicate a clear and explicit timetable for the review of National Lottery Funds to supplement Arts and Heritage programmes, though it needs to be acknowledged that this in no way replaces continued revenue support

6. DCMS must understand and acknowledge that encouraging individual giving and philanthropy differs vastly from region to region and especially in contrast from London to the regions. This needs to be recognized in any suggested change to business modeling in the future.

7. To ensure a healthy sector, a mixed economy of public and private funding will always be needed and a clear commitment to this should be explicitly communicated.

8. 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

For any small business modeling a new business plan on proposed 30% cuts to the revenue income will lead to radical restructure of resources and programmes to ensure survival and sustainability. Inevitably there will be closures of organisations that are unable to tolerate such reductions and redundancies are now already increasing as organisations look to reduce their costs. More critically however across the sector is the very real danger of putting the clock back twenty years to a level of investment that is clearly insufficient for today’s world. The financial return from arts investment is well documented; in the museum and galleries sector alone for every £1 invested £2 worth of product is produced. Sustained investment over the last decade has lead to a remarkable growth and success story in the development of the arts and heritage sector, one that has had real economic value both nationally through tourism and regeneration and internationally. Internationally, the recognition of the UK’s cultural sector has done much to communicate the country’s values of innovation, creativity and forward thinking through our film, music and arts industries that have often been the spearhead. This would not have been possible without the mixed economy of public and private funding that creates the condition for risk taking and innovation, without the explicit commercial imperatives. Cuts to public funding at the level proposed would suggest that the appetite to take such risk in our investment in the future, in new and emerging talent and new, innovative models for prorgammes would be severely restricted. In addition, the focus on engaging wider and difficult to reach audiences as part of our core work, often through the free admission at our institutions and expansive outreach and education programmes is severely threatened, programmes which have contributed significantly to local community inclusion programmes.

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

It must be acknowledged that arts organisations are already expert in getting the absolute most out their resources and delivering world-class programmes on the most modest of budgets. There are increasing moves for consortia of organisations to pursue collective purchasing of shared services; IT, legal and financial, and within the arts sector shared product and transport, which whilst offering modest savings may limit flexibility and responsiveness to creative programmes.

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

Presently, 7 pence in every £100 is contributed from the public purse to arts and heritage. This already seems an arbitrary and low figure given the demonstrable benefit both economic and culturally that the arts and heritage return. What is needed is not a specific settlement of a figure but an open debate on the value we place on culture and the arts and how we are prepared to pay for this. There will, inevitably always be a need for a mixed economy of public/private support.

11. What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations; Whether the policy guidelines for National Lottery funding need to be reviewed;

If recent proposals to restore Lottery Funding to their original purpose, including a 20% share for the arts and heritage are implemented then this will inevitably have a boost for the sector. However, if the strategy is to consider Lottery Funding as an option for replacing the funding lost in the 30% cuts then this is perilous. Project-specific funding which is the basis of lottery funding does not give the confidence or the guarantee of ongoing revenue funding – it does not allow organisations to plan robustly for the future. If there are suggestions of policy changes to allow long term funding through the Lottery for revenue streams then this needs to be considered. In parallel with this, a longer-term commitment to levels of core funding (3-5 years) for the key arts organisations is vital in order to create the confidence for investment from non-public sources.

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

Arts Council England have in my experience balanced successfully a support of the sector with an arms-length approach. Significant shifts have been made in recent years to genuinely strike strong relationships with the key organisations and a reciprocal dialogue into the needs and health of the sector. The threat to this relationship would be detrimental to our work.

13. Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level; Whether there need to be more Government incentives to encourage private donations.

Inevitably private and individual philanthropy and corporate support can help in the long term funding of arts and heritage. This requires a serious investment from DCMS and the Exchequer in creating the climate and conditions in which people will feel empowered to give. Presently there is little information or commitment forthcoming for tax incentives which leads to lack of confidence from potential patron support and undermines international competitiveness for investment. In addition, the greatest lever to private philanthropy is the endorsement that comes with public funds. In addition, the vast pull of London’s arts organisations (securing over 75% all individual and corporate giving) needs to be acknowledge and incentives thought through for encouraging giving within the regions. Also, programmers are all too aware of the type of product that will attract individual and private investment and that which will not. A dependency on such streams of funding has the potential to radically impact on programme decisions that are made, again making risk, innovation and that which is un-chartered difficult to find support for.

September 2010