Funding of the arts and heritage

Written evidence submitted by the Local Government Association (arts 215)

Introduction

1. The Local Government Association is a voluntary membership body and our 422 member authorities cover every part of England and Wales. Together they represent over 50 million people and spend around £113 billion a year on local services. They include county councils, metropolitan district councils, English unitary authorities, London boroughs and shire district councils, along with fire authorities, police authorities, national park authorities and passenger transport authorities.

Key messages

2. There are three key issues that must be addressed in order to support the future flourishing of the arts and heritage:

· The public subsidy to arts and heritage bodies must be better aligned with the priorities of local communities, and these services must become more accountable to local people;

· Councils and local partnerships must be given the maximum flexibility to spend the public money they have in a way that best supports their local area. The LGA is working with government to develop a radical place-based approach to public services that would cut through funding silos. This model would provide opportunities for the arts and heritage to access new funding streams;

· The arts and heritage sectors must work together to lead their own improvement and development. The focus of this work should be to develop new governance and delivery models that can adapt to reduced funding, and which open up the arts and heritage in a way that makes them a cornerstone of the Big Society.

Background

3. Supporting the arts, culture and heritage is a billion pound concern for local authorities in England1. In 2008-09 this investment supported a total of 1099 theatres, concert halls, arts centres and museums and galleries2. Councils also play a major facilitation role, helping to maintain networks of people, groups and facilities, and in particular supporting community and voluntary groups.

4. This underlines the fact that local government remains, as it has always been, a vital part of the ecology of the arts. From the Chester Mystery Plays, commissioned by the town’s mediaeval guilds, to Jeanie Finlay’s digitised reflection on Anish Kapoor’s Sky Mirror, commissioned by the council-supported Nottingham Playhouse, local communities continue to make the best use of their heritage and to foster the production of excellent arts for and in their places, to make their places better.

Radical reform of public services

5. The LGA has made an open and comprehensive offer to the government about a great reform programme for public services. The main idea of this reform, which we are currently working with government to develop, is simple: radical decentralisation is needed for a more affordable and effective state.

6. We believe the state must be reshaped through place-based area budgets, rather than the present system of ring-fenced departmental funding silos, which is coupled with a target setting culture in Whitehall and competing and often contradictory performance management regimes.

7. Parliament would remain the decision-making body for how national tax revenues are spent, while decisions on what public services are commissioned locally – and from where – would be made at the local level. In most cases, the local body should be the council or an existing partnership of councils. Its job would be to simplify the way public services are run locally, to strip away duplication and waste, improve effectiveness, and put local people – not bureaucratic interests – first.

8. Given the scale of the expected cuts to public spending, it is only through such radical reform that frontline public services, including the provision of cultural services and facilities in the arts and heritage, can be protected.

9. More information on the LGA’s work can be found in Place Based Budgets: the future governance of public services; which is available on our website, at http://new.lga.gov.uk/lga/aio/12294113

What does this mean for the arts and heritage?

10. A place-based approach to funding public services, in which the ring-fence is removed from many central grants and the local governance body commissions services in response to local need, would, we believe, present huge opportunities for the arts and heritage, as well as for sports and other cultural services.

11. Cultural services budgets will need to deliver efficiency savings, just like all local services. But place-based budgets offer, at the same time, the chance for local arts and heritage groups and in-house providers to get access to more of the big block grants that councils and local partners receive. On this model, there will be less distinction between statutory and non-statutory spending.

12. The strategic commissioning of cultural services by, for example, schools, social care services or mental health trusts, is a key area of interest at the local and national level. Local Government Improvement and Development (LGID), the national cultural quangos, the professional bodies of the National Culture Forum and the Chief Culture and Leisure Officers association, have all been working to improve the capacity of local cultural services to be strategically commissioned.

13. This work must lay the foundations for a culture shift in local services to prepare for the coming reductions in public funding. Councils will deliver less, but commission more. So the capacity and capability of the arts and heritage sectors to be strategically commissioned to deliver outcomes against place-based funds, must continue to be built up.

Case Study: The LGID-led Culture and Sport Improvement Programme, together with the National Culture Forum, recently produced The role of culture and sport in supporting adult social care to deliver better outcomes. This work shows how the culture sector can provide a wealth of opportunities for people to participate in interesting and engaging new activities, tailored to local community interests and expectations. Such opportunities are vital if people are to be encouraged to adopt the Foresight Report’s recommended "five-a-day" for a more productive and fulfilling later life: Connect; Be Active; Be Curious; Learn; and Give. You can find this publication at: http://www.idea.gov.uk/idk/core/page.do?pageId=17379857

14. Drawing on the above case study, we can see that funding for older people’s health and wellbeing presents an important potential revenue stream for cultural services. The LGA wants to ensure that any public health budget that might be given to councils as part of changes to primary care administration is not ring-fenced. This will allow councils to commission locally appropriate interventions to improve public health from a wide range of delivery bodies, including arts and heritage groups.

Case study: The LGA also worked with the Museums Libraries and Archives council to produce Building Learning Communities, which explores the value of museums, libraries and archives in supporting informal learning. These local services play a key role in providing opportunities for individuals to gain new skills, often through volunteering; to access information, including support with job searching; and to take part in local activities that can help to build their self-confidence and make them more employable. You can find this publication at: http://www.lga.gov.uk/lga/publications/publication-display.do?id=8474587

15. Drawing on the above case study, we can see that another future funding stream for arts and heritage groups might come through Local Enterprise Partnerships’ commissioning of training and employment support programmes for the long-term unemployed.

Sector-led improvement and the development of new governance models

16. The LGA recently successfully lobbied for the creation of a sector-led efficiency programme to help councils work together to deliver public libraries more efficiently. The Future Libraries programme, which was launched on 16 August 2010, will be delivered by the LGA Group in partnership with the Museums, Libraries and Archives Council. More information can be found at http://www.culture.gov.uk/news/news_stories/7381.aspx.

17. The programme promises to spread learning between library authorities, to achieve cost savings, develop new partnerships and governance models, and to take advantage of digital opportunities.

18. We believe this council led programme should be used as a model for the future improvement and development of other cultural services.

19. For example, we would expect the learning from the Kensington & Chelsea with Hammersmith & Fulham project, which will explore the feasibility of sharing library services delivered or commissioned jointly across borough borders, to be relevant to authorities that are looking to share their heritage protection services in order to make efficiency savings.

20. Similarly, over the last seven years nearly £300 million has been spent by government to improve the positioning and performance of local museums through the Renaissance programme. The Future Libraries programme presents a model on which better use could be made of these resources to assist museums to make an even bigger contribution to their local communities through place based budgeting. Councils taking over responsibility for this programme will ensure greater efficiencies from more targeted funding and less duplication.

More efficient public funding for the arts and heritage

21. We believe that local and national funding bodies in the cultural sector could work more closely together, and that this would help the total public subsidy for culture go further and be delivered more efficiently. Closer priority setting and performance management of funded arts and heritage bodies is central to delivering these efficiencies.

22. For example, local authorities and the Arts Council England (ACE) are the two principal public funders of the arts in this country. Two-thirds of ACE funding goes to their Regularly Funded Organisations; a total of £360m in 2008-09. Funding to the same organisations from councils and local partners was £141m over the same period; a ratio of national to local investment in RFOs of 2.6:1.

23. If we look at investment in RFOs outside London, with its cluster of national arts and heritage institutions, the numbers move closer: ACE invests £177m in the eight English regions outside of London, with councils and local partners investing £100m; a ratio of national to local investment of 1.8:1. In fact, local funding for RFOs is equivalent to more than half of ACE funding to the same organisations in six English regions3. In the East Midlands, ACE invests £23m in RFOs with local partners contributing £19m, or 45% of the total public investment in the arts.

24. It is somewhat disconcerting, therefore, that the Arts Council’s own Stakeholder Focus Research tells us that, "Local authority partners are more negative about the Arts Council’s effectiveness in achieving its mission than others. Indeed, opinion formers raised questions about how harmonious the working relationship between the Arts Council and local authorities is at times, and whether there is a sufficient sense of working towards shared aims."4

25. RFO funding is, of course, only one part of the arts and heritage funding ecology; indeed, they account for only 13% of the £1.117 billion that local government invested in the arts, culture and heritage in 2008-09.

26. RFOs are, however, a key part of the arts ecology, and these figures offer a useful case study to highlight the current parallel funding regimes which, we believe, must increasingly work more closely together if public investment in the arts is to be delivered more efficiently in response to public spending pressures.

27. We know that local authorities are very keen to look at a "total" or place-based approach to cultural provision in their areas, and we call on government and national quangos to support this work, in order to help protect frontline arts and heritage provision by making public funding go further.

28. We will continue to work with ACE to improve this situation, but neither sector should underestimate the scale of the challenge, or the potential benefits to the arts and heritage of a more efficient approach to public investment in them.

Lottery funding

29. This submission has so far focused on exchequer and local funding for the arts and heritage. It is worth making specific mention about lottery funding separately.

30. Local authorities currently are a key player in the lottery funding system, acting principally as recipients and facilitators of bids. Councils play a convening role locally to encourage and support bids, and a leadership role to focus the efforts of local groups on those priority areas where additional funding might best add value.

31. Drawing on our place-based funding model outlined above, we are interested in a devolved approach to lottery funding that would support the government’s aims of building the Big Society by bringing decision making in an area closer to local people and supporting the growth of a strong and diverse voluntary and community sector.

32. We believe that there is scope to increasingly devolve decisions over the distribution of available lottery funds to the local level. Coupled with other available funds from private enterprise, existing community development organisations and local and central government, the lottery could make a vital contribution to creating a "community bank" in each locality. Such an approach, we believe, would:

· Empower and involve local people in community funding, and bring this investment more in line with local needs and priorities;

· Increase the reach of investment into the community;

· Support new models of investment including mutuals, loans and asset transfer;

· Ensure a more efficient, cost-effective and joined up approach to decision-making and administration of funds, by bringing it together in one place;

· Increase transparency and reduce barriers to access for funds by simplifying the system and placing decision making within the local area;

· Present a more efficient approach to funding the voluntary and community sector by sharing services and cutting through bureaucracy.

Summary

33. There are currently a plethora of systems for funding arts and heritage projects in the UK; collectively, these are complex, confusing and inefficient. Multiple funding providers operate at local, regional and national level, each with different processes, different priorities and different requirements to access funding.

34. The web of funding providers causes duplication and waste in the system and places decision making with remote national distributors and providers, often focused on nationally set priorities with no direct experience of the challenges and work being undertaken at a local level. We believe the current complex system also effectively ‘locks out’ small and inexperienced groups from accessing investment.

35. In comparison we propose a very simple locally led approach that could lever in additional funding locally, and that would lower the barrier to access funding, reduce back-office costs and move decision making out of Whitehall and into local communities. We believe this will increase the reach of investment into arts and heritage and local communities, stimulate social enterprise and promote greater transparency and accountability over public funds.

September 2010


[1] £1.117 billion combined revenue and capital spend by English local authorities in 2008-09. See Annex A8, Local Authority Revenue Expenditure and Financing (CLG, 2009).

[2] See Culture, Sport and Recreation Statistics 2008-09 (CIPFA, 2009).

[3] East of England ; North East; North West; South East; South West; and Yorkshire and Humber . Data from RFO statistics for 2008-09, online at http://www.artscouncil.org.uk/funding/regular-funding-organisations/annual-submission/regularly-funded-organisations-statistics-2008-09/

[4] See: http://www.artscouncil.org.uk/media/uploads/arts_council_stakeholder_focus_research.pdf