Funding of the arts and heritage

Written evidence submitted by Equity (arts 115)

Introductory Comments

1. Equity is the trade union representing 36,500 actors, performers and other creative professionals working in the UK. Our members work across the arts sectors and the creative industries including in drama, comedy and entertainment productions, opera, musical theatre and dance. The composition of the membership is approximately equal between the sexes.

2. The question of the nature and adequacy of public support for the arts is a core concern for our members. It is a crucial issue, not only for those individuals currently employed in theatre and arts organisations (whether subsidised or in the commercial sector), but also for many of our members working in television, film or radio, who will often work across all of these media.

3. This submission will respond to the key points outlined by the Committee in its terms of reference, but will focus on those areas that are particularly relevant to our experience. We would also welcome the opportunity to provide additional oral evidence to the Committee in due course. As the representative organisation of actors, singers, dancers, stage managers, creative contributors and other performers working in the UK we believe we could provide an essential perspective on the issues covered by this inquiry.

4. We welcome the timing of this Inquiry, but regret that its findings will not be ready in time to better inform the Comprehensive Spending Review. Equity has been very concerned that no discussions have as yet taken place between DCMS or the Treasury and trade unions in the creative sector concerning proposals in the Comprehensive Spending Review. We are also concerned that no impact assessment has been carried out in accordance with the new Equality Act legislation.

The impact recent, and future, spending cuts from central and local Government will have on the arts and heritage at a national and local level

5. This inquiry comes at a time when funding for arts and culture are under considerable threat. We are aware that DCMS funding may be reduced by up to 30% and that organisations including Arts Council England have been asked to undertake work to model the effects of substantial cuts to their budgets. All Arts Council England Regularly Funded Organisations have already received a year-in cut of 0.5%. In monetary terms this represents a reduction in income for 2010 of £142,185 for the Royal Opera House and £104,022 for the Southbank Centre.

6. The impact of these cuts will also have significant consequences for smaller theatre companies, which operate on much smaller margins and could be devastating for our female members who are already disadvantaged with regard to employment opportunities, despite the success of largely female-led productions such as "Mama Mia" and "Calendar Girls". Small scale and fringe theatre, which are characterised by low pay, currently represent the main employment opportunities for women.1

7. The continuing popularity of the arts has enabled the sector to grow and succeed, despite the challenges of the recession. In 2008/9 there was an increase in attendance at Regularly Funded Organisations of 17% and a 9.2% increase in the percentage of RFOs rated "strong" or "outstanding" in artistic quality2. Given this success and the potential for further growth, the cuts foreseen in the Comprehensive Spending Review would appear to run contrary to the intention of growing the UK’s economy by enabling sectors such as the creative industries and tourism to expand and provide employment.

8. In his speech at the Serpentine Gallery on 12th August the Prime Minister pledged to make Britain one of the top five tourist destinations in the world. The arts and the UK’s cultural heritage will obviously be a vital component of a successful tourism strategy. Research by the Nation Brands Index for Visit Britain has found that the UK is ranked 4th out of 50 countries in terms of having an exciting, contemporary culture in terms of music, art, films and literature. Further research by Visit Britain demonstrates that culture and heritage are "the main motivators for visiting Britain for a holiday/short break". Visit Britain also estimates that holidaymakers in the UK spend £3bn, representing 60% of their total spending, on culture and heritage activities.3

9. Business leaders also agree that investment in culture and the arts should be sustained. In 2009 HSBC asked 500 entrepreneurs what they thought business in Britain should focus on in the years ahead. World class creative industries were the most important priority at 56.5% ahead of the 46.2% emphasising the need for a top class education and training system.4 NESTA has calculated that with Government support, a 4% annual growth rate can be achieved in the coming years by the creative industries, double the rate of the rest of the economy. This growth would boost GVA to £85 billion from £57billion and create 185,000 new jobs. By 2013, the creative industries are expected to employ 1.3 million people, which is likely to be more than the financial sector.5

10. We also have significant concerns about the impact of cuts to arts funding at the local level. Only 15% of theatres in the UK are subsidised by the Arts Councils, most receive financial support from their local authorities. Local authorities have flexibility over discretionary budgets and so the impact on arts and cultural expenditure will vary from council to council. If protection is afforded to areas such as education and health when local authorities come to implement budget cuts, this could mean that local arts and culture budgets will face more severe reductions.

11. A statutory duty to fund the arts, as is the case in Wales, could deliver substantial benefits for local authorities. NALGAO (National Association of Local Government Arts Officers) estimates that for every £1 being spent on arts services a return of £1.67 is realised in additional funding from other organisations and services.6 Local communities derive enormous benefits from spending on the arts and culture. Investment in cultural activities can also drive regeneration and community cohesion. Public approval for spending on the arts is high, as borne out by recent survey evidence from the Greater London Authority. GLA survey results show that 71% of respondents feel that it is important that ’taxpayer’s money continues to be invested in London’s culture during difficult economic times’ compared to just 16% who disagree.7

12. Any significant cuts to public funding for the arts inevitably places the sustainability of many organisations at risk. This will impact on the employment, training and development opportunities available to actors, performers and creative professionals, whose contribution to the arts drives the success of the UK’s cultural offer nationally and locally. The talent nurtured in our theatres and music venues win record numbers of Oscars, Tonys and Grammies, demonstrating that investment in talent delivers an international competitive advantage for the UK and should be sustained.

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

13. Our members strongly believe that action is necessary to reduce excessive administrative costs in arts organisations. For some time, our members have reported that organisations have been investing significant amounts in modernising their management, marketing and administrative structures and that this has led to a decrease in funds available for production. We are concerned that increasing overheads have put the core business of theatres at risk. For example, in spite of significant investment in its building, an entirely new management team and a reduced number of productions, the Northcott in Exeter fell into administration this year.

14. There are also discrepancies between full time employment opportunities available to performers compared to those available for support staff. Many theatres are now employing increasing numbers of staff not directly related to performance, such as press and publicity, community outreach and school liaison officers. The justification for this spending is that theatres need to reach out to new audiences.8 While Equity supports this aspiration, unfortunately there is no evidence that such schemes have proven successful and that audiences are becoming more diverse or increasing. Moreover, it appears illogical to invest more resources in reaching out to audiences if this compromises the amount of funding available to produce work on the stage for audiences to watch.

15. Organisations should be required to share data about the proportion of their budget that is spent on the production of work and specifically on creative workers. This could assist in ensuring best practice across the arts. If funding allocations are to be cut, the Arts Councils should also set maximum levels for the proportion of funds spent on administration and should ensure that there is a fair balance between the employment opportunities and remuneration available for creative workers and support and administrative staff.

16. Our members have also identified a significant increase in co-productions. While this model can make sense financially, in some cases it can lead to a decrease in employment opportunities and fees for actors, and other creative professionals including designers and directors, which in turn has a negative impact on the pool of experienced creative talent. Co-productions can also limit the opportunities for genuine ensemble work which is a valued form of theatre many members believe is under-represented in the current modes of production.

17. Equity has argued for some time that the Arts Councils and local authorities should work together as much as possible to provide a coordinated approach to arts funding. While Equity does not have direct experience of managing these relationships, a number of our members who work as artistic directors report that better communication and joint working can be achieved through regular meetings which include all funding parties.

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

18. Currently public funding makes up just over half (53%) of the income received by the arts sector. 8% of public money is spent by local authorities. The private sector accounts for 15% and box office and other earned income constitute a further third of funds.9 This mixed economy of funding has evolved over time and is effective. In the last decade there has been an unprecedented level of funding made available to the arts which has delivered a range of critically and commercially successful work.

19. The current framework of public support for the arts enables practitioners to take risks and make long term investments in creativity. Funded theatre is able to experiment and produce new and exciting work, precisely because it does not have to rely completely on ticket sales at the box office in the same way as the commercial sector. This ability to take risks makes funded theatre more dynamic and creative, and more able to provide opportunities for new talent and new writing.

20. The organisation Arts and Business agrees with this assessment. In their recently published report Arts Funding in a Cooler Climate A&B state that "a tripartite system that has evolved so organically and which appears to grow so interdependently would be put at risk of serious damage by any attempt to recast it more radically, including the withdrawal of large amounts of subsidy".10

21. As with many other sectors of the creative industries, the arts are not commercially viable without the support provided by public subsidy. However, the return generated by this investment is far in excess of the subsidy awarded and adds value to the UK economy through VAT receipts, the creation of intellectual property and the development of creative talent. According to Arts Council England in 2004 the public investment of £121.3 million for theatre generated in the region of £2.6 billion, split between the West End (£1.5 billion) and the rest of the country (£1.1 billion). Whilst this is a mixture of subsidised and commercial activity, commercial theatre would readily admit its inability to thrive without the subsidised sector.

22. There are, however, elements within Government arts funding policy that could be rebalanced. Public subsidy for the arts must prioritise the need to develop more original production, create employment for professional performers and focus less on administration. In line with good practice in other areas, and in order to create sustainable employment in the arts sector, funding bodies should insist that organisations in receipt of subsidy pay at least industry standard wages and fees to performers and other creative workers.

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

23. We continue to support the arms length principle, the use of peer review in the sector and believe that micro-management of arts organisations is not desirable. However, we do believe that funding bodies should have a duty to hold accurate and reliable information on pay, how much work is being produced and how public money is being used across the arts sector.

24. Initial findings from Equity’s 2010 survey of its members show that over 85% earned less than £20,000 from their work in the entertainment industry in the last 12 months. 17% of members have had to turn down work in subsidised repertory theatre in the last 12 months because the pay on offer was too low. In commercial theatre and independent theatre the figures for turning down work rise to 19% and 37%. As low pay for performers is endemic in the arts sector, there is clearly a role for the Arts Councils and other funding bodies in proactively promoting the right to be paid properly, whether this is adhering to National Minimum Wage legislation or industry agreed rates.

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

25. Equity has responded to the consultation by the Secretary of State on the Draft Legislative Order to enact a change to the shares going to the National Lottery good causes. Many of our members work in organisations which depend on Lottery originated funding which is distributed by bodies including the Arts Councils, the UK Film Council and Creative Scotland. We welcome the draft Order and its objective of increasing the share of funds apportioned for the arts, heritage and sport from 16.6% to 18% each by 1 April 2011. We also welcome the further proposed increase in the shares for the arts, heritage and sport to 20% from 1 April 2012.

26. The Olympics currently account for £2.2 billion of National Lottery funds, which is approximately 20% of the money that has been made available for good causes between 2005 and 2012. During this period the arts and heritage stand to lose £322.4 million. For this reason we would like to see an even greater proportion of Lottery funding made available for arts, sport and heritage in the future.

27. Some significant achievements have been made possible by the Lottery funding provided to the arts. It is therefore unfortunate that the additional £50m that will be generated as a result of the proposed changes to the Lottery shares is likely to be more than offset by cuts to the arts budget resulting from the Comprehensive Spending Review and the demands of the Olympics.

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

28. Since 2000 the UK Film Council has championed film production in the UK and has made a vital contribution to both our economy and international cultural reputation. The success of British film since the Film Council’s creation is clear. The core UK film industry contributed over £4.5 billion to UK GDP in 2009 and over £1.2 billion to the Exchequer gross of tax relief and other fiscal support, from a turnover of £8.6 billion. At the same time UK film exports were 92% higher than in 2001, totalling £1.3 billion. In 2009 UK films and talent scooped 36 major film awards, 17% of the total available.11

29. While we appreciate the assurances made by the Government that tax relief and Lottery funding for UK film will continue, we are concerned that the decision to abolish UKFC has been taken without prior consultation with interests in the sector. There continues to be a need for a dedicated body that can advocate for, and champion British film and film talent, as well as engage with stakeholders such as studios, distributors and trade unions.

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

30. While Equity acknowledges that philanthropy makes a significant and positive contribution to the arts economy, generating £363m a year for the sector12, we are concerned that private investment should not displace public subsidy. Inducements to encourage private donations and philanthropy should be welcomed as this will enable organisations to top up their funding, but as stated above, we continue to support the existing mixed economy of funding which has proved to be stable and successful.

31. Total private investment in the arts sector fell by 7% for the whole of the UK last year and by 8% in London.13 Given that falls in investment were experienced in all three sources of private sector support, namely business sponsorship, individual donors and trusts and foundations and that the organisation Arts and Business expects this trend to continue for at least two years, the case for supporting and maintaining public subsidy is all the more compelling.

32. We do not believe it is realistic for the UK to replicate the US model of private giving to the arts, where 95%14 of funding is generated from private sector sources. The experience of the US suggests that a reliance on private donations is likely to concentrate funding towards established organisations and could dissuade artists from taking risks or developing new productions and new writing.

33. There is also a risk that substituting private donations for public subsidy will create a funding divide between London and regionally based organisations. Regional repertory theatres are an important pillar of UK theatre and have supported numerous successful and innovative new works that have transferred to theatres in London and beyond.

Other areas of interest that are raised during the course of its inquiry

34. Equity continues to be concerned that due regard for equal opportunities, particularly with regard to gender balance and portrayal are long over-due in the arts sector and is campaigning vigorously for change. Research undertaken for the International Federation of Actors15, of which Equity is a member, found that women in the arts consistently earn less than men across all age categories and that age and gender are a disadvantage when it comes to job opportunities, a disadvantage further compounded by being from an ethnic minority. Best practice for tackling this problem exists in other European countries such as Norway16, where organisations in receipt of government funding are required to do a yearly audit on gender balance. It is vital that employers and arts funding bodies are made aware of their obligations under the Equality Act 2010.

September 2010


[1] Sphinx Theatre Women in Theatre Survey 2006

[2] Source: Arts Council England Annual Report 2010

[3] Culture and Heritage Topic Profile, data from the International Passenger Survey, available from: http://www.visitbritain.org/Images/Culture%20%26%20Heritage%20Topic%20Profile%20Full_tcm139-184566.pdf

[4] The Future of Business, The Changing Face of Business in 21 st Century Britain, available from: http://www.100thoughts.hsbc.co.uk/downloads/HSBC-future-of-business-report.pdf

[5] Figures available from: http://www.nesta.org.uk/areas_of_work/creative_industries/startups_creative/starter_for_6_startups/assets/features/uk_creative_industry_to_drive_significant_growth_i

[6] See: http://www.nalgao.org/e107_images/custom/spendreport08.pdf

[6]

[7] Pg 60, Cultural Metropolis, available from:

[7] http://www.london.gov.uk/sites/default/files/04%20Culture%20Strategy%20final1.pdf

[7]

[8] Arts Council England reported in its 2009 Theatre Assessment that “national trend data available for the five years of this Assessment reveals a static picture for attendances and audience profiles”.

[9] Source: Arts & Business

[10] Report available from: http://www.artsandbusiness.org.uk/media%20library/Files/communications/ArtsFundinginaCoolerClimateFINAL.pdf

[10]

[11] Source: UK Film Council

[12] Source: Arts & Business

[13] ibid

[14] ibid

[15] Age, Gender and Performer Employment in Europe, 2008: http://www.fia-actors.com/uploads/ENGLISH.pdf

[16] The Norwegian Gender Equality Act 2005 states that “ Enterprises that are subject to a statutory duty to prepare an annual report shall in the said report give an account of the actual state of affairs as regards gender equality in the enterprise. An account shall also be given of measures that have been implemented and measures that are planned to be implemented in order to promote gender equality and to prevent differential treatment in contravention of this Act. ”

[16]