Funding of the arts and heritage

Written evidence submitted by The Theatres Trust (arts 166)

1. The Theatres Trust welcomes the opportunity to comment on the Culture, Media and Sport Select Committee Inquiry and would be pleased to provide oral evidence to the Select Committee.

2. The Theatres Trust is an Advisory Arms Length Body of the DCMS. We were established by The Theatres Trust Act 1976 and The Theatres Trust (Scotland) Act 1978 'to promote the better protection of theatres'. These Acts apply to all theatre buildings in England, Wales, and Scotland. The Trust’s 15 trustees are appointed by the Secretary of State for Culture, Olympics, Media and Sport and include trustees from England, Scotland, Wales and Northern Ireland.

3. The Theatres Trust is a statutory consultee in the planning system. Local authorities are required to consult the Trust on planning applications which include ‘development involving any land on which there is a theatre.’ The statutory instruments setting out the consultation requirements are currently: The Town & Country Planning (General Development Procedure) Order 1995, Article 10, Para 5 and Regulation 25 of The Town and Country Planning (Development Management Procedure) (Scotland) Regulations 2008, Schedule 5, paragraph 11. Theatres in Northern Ireland are covered under an administrative agreement. The Trust reports on its pre-application advice and planning application advice annually to the Department of Communities and Local Government.

4. The Theatres Trust is therefore a good example of an advisory body that works at local authority level within the areas of responsibility of both the DCMS and DCLG. We are often the only source of expert advice on theatre use, design, conservation, property and planning matters available to theatre operators, local authorities and official bodies. Given the pressures on local authorities to reduce staffing capacity in arts and cultural and planning departments, with many arts and conservation posts having been downgraded or deleted, we have been receiving an increased number of requests for our advice.

5. In its written ministerial statement of the 26 July 2010 the DCMS proposed that The Theatres Trust be declassified so it can act as an independent statutory advisory body. The Trust has been told that The Theatres Trust Act and The Theatres Trust (Scotland) Act will remain in force, ensuring that The Trust’s role continues. We have also been told that the only change that will be made will be to transfer the responsibility of appointment of the Trust’s trustees from the Secretary of State to the trustees of The Theatres Trust, thereby reducing administrative time spent by the Department on our trustee appointments. Our authority is vested in the Acts and in our role as a statutory consultee and it is important that these continue as instruments for the Trust to provide its advice and provide for the protection of theatres, particularly when many theatres will be facing additional pressures of cuts in public subsidy.

6. The Theatres Trust receives a £55,000 annual grant devolved for administrative purposes from the DCMS to English Heritage in 1994. It is vital that this grant remains as it is provided for the execution of our statutory work in England. Given that this grant has remained on standstill since 1994 we have already been managing annual inflationary reductions. Any further cut in this grant would seriously compromise our ability to deliver our work. It contributes directly towards the employment of an RTPI qualified specialist theatre adviser enabling us to deliver our statutory obligations to provide planning and heritage advice. In 2010/11 this included 14 pre-applications, 104 planning applications, 626 local authority Local Development Framework consultations and 59 other consultations. The Adviser also considers listed building consent applications and in 2010/11 these totalled 9 pre-applications and 60 listed building consent applications. In addition the Adviser maintains a Theatre Buildings at Risk register enabling us to establish those theatres most at risk.

7. Whilst not a statutory consultee on listed building applications, recognition of our expertise in this area by local authorities means we are considered an important consultee. Our expertise was also noted in relation to the Heritage Protection Review in 2008. The Culture, Media and Sport Select Committee stated "Recommendation Four: [The Select Committee] recommend[s] that the Government ensures that the role of statutory consultees such as the Theatres Trust is properly incorporated into the heritage protection reforms in addition to their existing role in the planning system." The DCMS released its response to recommendations from the Culture, Media and Sport Select Committee on the Draft Heritage Protection Bill on 20 October 2008. The Trust was referenced in on page 11, stating "31. The Government has welcomed comments received from organisations that have put forward a case for their greater involvement in the heritage protection system. In the case of the Theatres Trust, DCMS has been constructively engaged with them and we agree that there is scope for amendments to the Bill to enable the Theatres Trust to participate more fully in the heritage protection system. For example, a number of provisions will be redrafted to ensure that the Theatres Trust is capable of being included as a statutory consultee, in relation to processes and decisions affecting theatre buildings."

8. We are working with civil servants at the DCMS on our declassification, but we are yet to receive any written notification of the timetable and the process. We are working to ensure that any changes in our relationship to the DCMS do not impact negatively on our capacity to promote the better protection of theatres on behalf of the nation, particularly at a time when many more theatres in the UK will be facing the prospect of managing their assets on diminishing levels of public subsidy.

Please also find attached our wider response to the Committee’s specific questions.

9. 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

9.1 Subsidised theatres rely upon a range of different funding streams for capital and revenue support including the Arts Council, local Government, European Funding, Government regeneration funding (previously through the Regional Development Agencies and we anticipate in the future through Local Enterprise Partnerships), Arts Lottery and Heritage Lottery. Our concerns lie in the rate of the implementation of the cuts, given that Government departments, Arts Council and local Government will be looking to make savings quickly. Theatres operate on a fine financial balance and should be given time to manage any cuts and seek alternative income to offset any reductions in subsidy and capital commitments. A sudden squeeze on all these funding streams will have an impact upon the ability of theatres to function effectively on a day-to-day basis, to maintain their buildings, and to implement already planned capital improvements, and so ensure they continue to be able to maintain a high quality of service and operate sustainably for the long term.

9.2 In planning for spending cuts, arms length bodies and local authorities are already making provisions for reducing staffing levels and the cost of providing services in the areas of arts and culture, planning and conservation. They are looking at options for cutting back staff, combining service functions with other arms length bodies and neighbouring authorities, and establishing trusts or outsourcing to deliver services. The impact of this disruption on theatres cannot be underestimated and should be managed to ensure it does not cause any additional financial stress.

9.3 Theatre buildings not in theatre use are also at greater risk. The Trust is already concerned at the number of theatre buildings, particularly in the north of England, which are facing closure and demolition by Local Authorities that feel unwilling or unable to maintain them. The Palace Theatre in Nelson was demolished earlier this year, while North Tyneside Council is planning to spend a considerable sum demolishing the Borough Theatre, Wallsend and redeveloping it for commercial and residential uses, despite the efforts of local residents to save the building. The Council specifically cited reductions in public sector funding as reasons why they refused to support local residents’ attempts to save the building, considering their plans financially unsustainable. The Trust fears that these represent the start of another spate of losses of theatre buildings in towns which already have little else in the way of cultural facilities.

9.4 Regional theatres are particularly vulnerable to reductions in Government support since they tend to be in areas which lack the profile or means to attract significant levels of business or philanthropic support, resulting in large areas of the country which are denied access to live professional theatre and performances. Regional theatres are vital components of the wider theatre ecology, enabling practitioners to develop their skills and inspiring the next generation and their loss has an impact throughout the sector.

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

10.1 Theatre owners and operators will face many challenges to maintain their competitiveness and continue to attract audiences over the next few years. Whilst there may be opportunities to work more closely with neighbouring theatres (in some areas) to promote productions jointly to audiences and to work on joint programming, this can often take as much time as working alone.

10.2 There may well be opportunities for theatre organisations to merge and for local authority-owned theatres to be devolved to trusts, but each of these options will need to be carefully examined and managed. This includes a commitment to investing resources in feasibility work to ensure that solutions do indeed provide a more economically viable and sustainable solution and don’t just transfer financial responsibilities which require similar levels of subsidy.

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

11.1 Theatres operate in a mixed economy, attracting earned income and subsidy to present and produce a range of work for different audiences. Most public subsidy that theatres attract is targeted towards public benefit, providing access to theatre experiences for those in society less able to afford to pay or those that do not have the family or other support that encourages participation in the arts. Protecting subsidy that goes towards providing those least able to access the arts with the opportunity to do so is necessary.

11.2 For example, larger receiving regional theatres are able to attract more income from the box office because of their size. In many of these theatres the levels of public subsidy are often lower, but targeted to providing use of the theatre by community groups who would not have the funds to afford commercial hire rates, or towards providing education programmes where theatres work with local youth services, social services and schools to create opportunities for young and other disadvantaged groups to access theatre experiences.

11.3 In smaller theatres, their smaller seating capacity seriously compromises their ability to earn income. They are often their local communities’ only access to the arts and culture, and in many places these communities are not wealthy. Subsidy that is directed towards producing and promoting work by small scale theatres that work closely with their local communities should be prioritised.

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

12.1 Theatres across the UK are still in need of a wide-reaching and coherent programme of capital investment to enable them to upgrade the basic fabric of their buildings to make them more accessible and financially viable, to improve their environmental efficiency, to increase audiences and help revitalise our tourism industry, and to act as a catalyst for urban regeneration. While the Heritage Lottery Fund has pursued a sustained and effective programme of investment in theatres, the same unfortunately has not been the case with Arts Council England Lottery funds in the last 10 years. If theatres are to engage with new audiences and continue to give life to town and city centres across the UK, it is essential that their capital needs are addressed.

12.2 While grants from the Heritage Lottery have helped to reinvigorate a number of theatres such as the Hackney Empire and London Coliseum, many theatres do not qualify as heritage assets in their own right, and the share of Arts Council funding going towards theatre buildings has declined dramatically after the first five years of the Lottery. There has also been an increasing divide growing between the experience of theatres in the commercial and in the subsidised sector.

12.3 The Theatres Trust welcomes the intention to return the Lottery shares for arts, heritage and sport to the level originally intended when the Lottery was set up. If ticket sales remain at their current levels, this should translate into an extra £50 million a year each for arts and heritage. The original ‘good causes’ of arts and heritage have seen a diminution in the funds available for their activities not only from the reduction in Lottery shares in 1997 but also in the redirection of significant Heritage and Arts Council Lottery money to fund the Olympics.

12.4 However, we are also concerned that such re-distribution should not be seen as mitigation for wider cuts in government funding of arts and heritage projects. While we recognise the need to restore integrity to the public finances, we are anxious that the core principle of ‘additionality’ in regard to Lottery funding is not compromised. One of the primary intentions for the Lottery, as the impact assessment document makes clear, was to provide funds for capital projects which the Government was not in a position to fund directly and to ensure that the country’s cultural infrastructure was properly restored, maintained and improved. The value of Lottery funding will be undermined if it is used instead as a substitute for core Government spending.

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

13.1 The Theatres Trust would welcome a commitment to an increased level of Lottery funding going towards capital projects for theatres. One of the primary intentions for the Lottery was to provide funds for capital projects which the Government was not in a position to fund directly and to ensure that the country’s cultural infrastructure was properly restored, maintained and improved.

13.2 There are three areas that we would like to see considered further in the return of the Lottery to its original levels:

13.2 a) A commitment to an increased level of Lottery funding going towards capital projects for theatres, particularly where these support economic and environmental sustainability, address issues related to climate change, and deliver aspirations of locally led initiatives to deliver the Big Society. Many theatres are still to benefit from Arts Lottery funds, which have tended only to focus on organisations occupying theatres that are already financially supported by the Arts Council as revenue or regularly funded clients. There are many theatres that operate in the amateur and voluntary sectors, or operate solely as receiving venues, in education and commercial sectors that provide public benefit and have been unable to access Arts Lottery funding for capital projects. The economic realities of theatre ownership are such that the return on capital invested is low in normal commercial terms, and far too low to support the sort of modernisation that is now needed. This has widened the gap between the standards the public experience in the subsidised and commercial sector.

13.2 b) A commitment to capitalisation and the seed funding of endowments that can support the long term operational and maintenance needs, and therefore viability, of theatre buildings. For example, The Theatres Trust is keen to establish such an endowment to build its Theatre Protection Fund which would enable us to provide assistance to secure the future of theatre buildings.

13.2 c) A recognition of the important leverage role that capital Lottery funds play in the economic, social and environmental regeneration of an area and that it has a complementary role to play in supporting theatre capital projects along with European and UK-wide enterprise and regeneration funds. The DCMS and the Lottery we feel therefore has a role to ensure that other Government Departments are aware of the implications on the Lottery of reducing capital regeneration funds.

14. 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

14.1. In its written ministerial statement of the 26 July 2010 the DCMS proposed that The Theatres Trust be declassified so it can act as an independent statutory advisory body. The Trust has been told that The Theatres Trust Act and The Theatres Trust (Scotland) Act will remain in force, ensuring that The Trust’s role continues. We have also been told that the only change that will be made will be to transfer the responsibility of appointment of the Trust’s trustees from the Secretary of State to the trustees of The Theatres Trust, thereby reducing administrative time spent by the department on our trustee appointments. Our authority is vested in the Acts and in our role as a statutory consultee, and it is important that these continue as instruments for the Trust to provide its advice and provide for the protection of theatres, particularly when many theatres will be facing additional pressures of cuts in public subsidy.

14.2 The Theatres Trust welcomes the proposal by DCMS that we should be declassified to become an independent statutory advisory body. We anticipate that this will result in a saving of administrative time which will enable us to focus on promoting the better protection of theatres. We would welcome an endorsement by Culture, Media and Sport Select Committee of the Trust’s independent statutory advisory role.

14.3 Our advice has been instrumental in securing the future of theatres, scrutinising the suitability of works to theatres, ensuring that new theatres are fit for purpose and campaigning for the retention of theatres under threat. Our specialist advice to Local Authorities through the planning system is particularly vital at a time when they may be employing fewer numbers of planning and conservation officers. It is therefore imperative that the Trust maintains its role as a statutory advisor.

14.4 We are working with civil servants at the DCMS on our declassification, but we are yet to receive any written notification of the timetable and the process. We are working to ensure that any changes in our relationship to the DCMS do not impact negatively on our capacity to promote the better protection of theatres on behalf of the nation, particularly at a time when many more theatres in the UK will be facing the prospect of managing their assets on diminishing levels of public subsidy.

14.5 The Theatres Trust receives a £55,000 annual grant devolved for administrative purposes from the DCMS to English Heritage in 1994. It is vital that this grant remains as it is provided for the execution of our statutory work in England. Given that this grant has remained on standstill since 1994 we have already been managing annual inflationary reductions. Any further cut in this grant would seriously compromise our ability to deliver our work. We would welcome an endorsement by the Culture, Media and Sport Select Committee that our grant should continue at current levels.

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

15.1 There needs to be a clearer understanding of why businesses and philanthropists invest in theatres and how they expect to benefit, in order to decide how extensive a role their support could play in the sector as a whole. Larger corporations are generally more likely to invest in high profile theatres and smaller groups or regional theatres are less able to attract significant levels of private investment, especially in areas of the country which are economically struggling.

15.2 Furthermore, private funding can be inconsistent and increase the uncertainty of an already volatile sector. The experience of many arts organisations in New York has been that private investment can evaporate in times of economic uncertainty, leaving them in severe difficulties. The impact of the recession last year saw many sponsors drift away from the arts. In some cases the Arts Council’s Sustain funding was able to fill the gap left, but this was a one-off injection of funds.

15.3 The Trust would be concerned at attempts to imitate too closely the American model of arts funding, without an appreciation of the many different factors which underpin it and which are not replicated in the UK, such as tax incentives, more independent regions and a different attitude to the role of central Government. There is also widespread dissatisfaction among American theatre practitioners with a system of private philanthropy which they feel does not deliver the depth or breadth of artistic excellence enjoyed in Europe. Spoken drama in London’s West End and on New York’s Broadway is now dominated by productions developed in the UK subsidised theatre sector.

15.4 Theatres already make huge efforts to attract business and private donations and it is uncertain how much more scope there is for greater involvement of the private sector without further tax incentives also being on offer.

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

16.1 The existing system of Gift Aid is an essential fundraising element of many theatres that have charitable status. The Theatres Trust would welcome any proposals that strengthen the Gift Aid system, make it easier to claim, and which make it more attractive to the individual who is interested in giving.

September 2010