Funding of the Arts and Heritage

Supplementary written evidence submitted by Christopher Gordon and Peter Stark (arts 236)

Evidence after publication of ‘Achieving Great Art for Everyone’ and the arrangements for a new National Portfolio funding programme for the arts by Arts Council England

11th November 2010.

1] The challenge to arts funding from the CSR settlement for Local Government

The Arts Council’s vision is for England as "a world-leading creative and cultural nation". This implies an acceptance of leadership responsibility for the arts in all of the ways that they manifest themselves in society beyond those that ACE funds directly, as well as some genuine comparative international context.

Local Government provides more funding for the arts and culture than ACE does (even setting aside the huge sums of money involved in the arts within education) and provides the bedrock of local provision for the full diversity of the voluntary and amateur arts, access to the arts and culture for the most disadvantaged and for local presentation and participation across the country through arts centres, festivals, community buildings, small grants programmes, museums and libraries.

In addition to this bed rock funding at ward and neighbourhood and town and village level Local Government – particularly the major cities including the London Boroughs - often provides very substantial grant aid to major arts organisations in co-funding agreements with ACE. Support of both kinds is discretionary (apart from the library service) but it has – generally - been maintained to date and often (particularly as a consequence of new capital projects) increased.

Early evidence suggests that the scale of pressure on Local Government finances within this CSR could have pushed the debate at local level beyond a tipping point and we could see very significant reductions in many cases and complete withdrawal in others. Perversely, the government’s ambitions for the Big Society may have contributed to this and arts organisations will be asked to seek resources from elsewhere – particularly from Arts Council England.

The strategy to achieve Great Art for Everyone does not seem to engage with this – potentially very major – issue as centrally as its importance to the achievement of the vision would suggest.

2] An equitable basis for national funding in the arts and culture between the Capital City and the major ‘City Clusters’ outside it.

Recent research (summary attached) has used newly available data for funding plans in 2011/12 to illustrate the very major disparity between the funding available to the arts and culture in London and in the major English City/Regions beyond it. The disparity exists in absolute levels, in ‘funds per head of population’, in the arrangements for partnership funding with local government and it applies to both National Lottery and Treasury funds.

In 1982 the Policy Studies Institute study "A Hard Fact to Swallow" found Arts Council expenditure in London in 1980/81 to be £3.37 per head of population (php) against £0.66 php (19.6% of London levels) in the rest of England. After 30 years of steadily increasing public and Lottery funding and rhetoric of regional development, the situation is actually worse. For 2011/12 the comparator is estimated to be London £21.92 (php) against £3.44 php (15.7% of London levels)

If DCMS direct funding of the major Museums and Galleries in London is added to ACE funding of its ‘front line’ organisations, the figures move to £70.36 php to London against an average in the rest of the country of £4.31 php (6.1% of London levels). Moreover, the largest cultural organisations outside London are expected to raise partnership funding from their Local Authorities whereas none of the largest London organisations seem to be required to do so.

The strategy to achieve "Great Art for Everyone" within a decade does not identify or question these disparities. It does not appear to acknowledge that the issue continues to exist..

3] Strategic engagement with local government and other funding partners.

In 1986, there was such concern at the risk to the arts and heritage on the abolition of the GLC and Metropolitan Counties that Government was persuaded to make additional finance available to protect them. A dedicated and senior team within the arts funding system of the time worked almost exclusively on this subject with ‘at risk’ organisations and their local authorities for up to a year.

The foregoing analysis would suggest that the risks to the arts and cultural infrastructure nationally may be greater in the current situation and yet the time (and senior management resource) for respectful and authoritative engagement with local authority funding partners does not appear to be available within the intended process as described in the guidance notes to applicants to the new National Portfolio Programme. The timetable for Arts Council decision making on grants within the new programme would suggest that Local Government will be presented with a fait accompli at the end of March next year and that – before then – there will be little or no scope for negotiation.

The same analysis of the above timetable also appears to apply to engagement with the increasingly important funding partners from the private sector and - for some – in public sector broadcasting. There is also concern that the timetable and process could halt some of the extremely constructive and radical conversations that were beginning to take place between arts organisations, including some that promised substantial cost sharing and even suggested merger.

4] The time frame and the process

ACE has adopted the 2008 recommendation it received from Baroness Macintosh and offered any organisation 12 month’s notice of a change in its funding status. That recommendation, made in a very different funding climate, produces the apparent need for what may be seen as a ‘rush to judgement’ on applications to the new programme.

The new programme has been opened to new applicants. Estimates obviously vary but an anticipated 1,500 applications totalling circa £400m is not an unreasonable assumption (see next section on the future of Grants for the Arts). The process suggests evaluation against the published criteria, against each other and against a reduced budget (but still one of over £300,000,000) in less than 9 weeks. Concurrently Grants for the Arts applications will continue to be processed (for which the system requires 12 weeks for a decision on awards of over only £8,000). The process also uses a single application procedure to address requests for, say, £40,000 p.a, from a small publisher and for £29,000,000 from the Royal Opera House with strategic goals at a level of generality that will be hard pressed to assist assessment.

It is difficult for outside observers to see how this process can be fair, transparent and thorough

5] Achieving the planning certainty aspired to.

The process aspires to give certainty of future funding levels to the new portfolio of Arts Council clients from April 2011 in the same way that the DCMS has given that certainty to the major museums and galleries it funds directly. In the more complex world of Arts Council decision making and partnership funding the worthy ambition to give such certainty may not be deliverable in practice and the ‘costs’ of the attempt may actually delay that certainty.

Were withdrawal of funding to one or more major organisations to be mooted and were that decision to be appealed and then – possibly - legally challenged, could the other decisions stand whilst this process was underway? The same delay might apply where changes in funding from partners forced a fundamental review of programme and business model.

It seems that breathing an additional three to six months into the ‘front end’ of the process could substantially enhance the possibility of achieving real early planning certainty for organisations.

6] The future of Grants for the Arts and ‘resilience’.

Last year Grants for the Arts provided 2,795 awards totalling £64,900,000 across the country at an average of £23,220. 35% of RFOs also benefited from Lottery funded Grants for the Arts in addition to their core – Treasury funded – awards. They have been asked in briefings to consider including replacement for such funds (which will be inaccessible to National Portfolio organisations in future) in their proposed core budgets for future years.

If Local Government funding is the key to delivery of the local arts and access agenda, then Grants for the Arts is the essential funding source for artists and artist-led practice and for the innovation ‘at the borders’ that is essential in any healthy arts or creative industry ecology.

If Lottery funding is to be made available to NPOs, for a new capital scheme, for touring and for other new ‘strategic streams’ in the future, what level of funding is likely to be available for Grants for the Arts?

Even with the increase in Lottery funding anticipated by 2012 (16%) it seems probable that these new uses for the funds will more than absorb that increase.

This, in turn suggests that there will be an upper limit to Grants for the Arts awards introduced and – perhaps a formal ban on what might be seen as ‘annual’ or recurring applications.

This likely outcome on the future of Grants for the Arts and – for many small artist-led companies – the loss of Creative Partnerships and Local Authority income will force them to seek the protection of NPO status as – without it – their prospects will be severely compromised.

As noted earlier, changes at local government level are also likely to direct many other organisations whose main public support previously came from these local sources, supplemented by arts grants, to seek the same funding status as this appears to be the only possible source of ongoing support from the Arts Council.

It appears that government has given a clear steer that the largest arts organisations should expect the same treatment as their own directly funded portfolio of Museums and Galleries – a 15% cut in funds by 2015. This would represent a hugely favourable settlement in the context of much larger reductions to the overall Arts Council budget. 67 of the largest organisations (currently receiving more than £800,000 each – a total of £200m within the £319m current RFO group of 873 organisations) will have their funding levels determined nationally under the new procedures.

Were that group of 67 to receive only a 15% reduction to their overall Treasury-sourced resources, then the funds available for the remaining 806 present RFOs (current totalling £119m) plus new applicants, and for determination by Regional Councils, would be reduced indeed.

Resilient business plans for smaller specialist arts organisations cannot be built on only occasional project funding. Some measure of continuity of arts funding will be a necessary part of any such sustainable business models. The Arts Council Strategy does not appear to offer the realistic prospect of such funding through either the National Portfolio Programme or Grants for the Arts.

Note

This evidence is provided as a supplement to an earlier submission to the Inquiry by the authors and available at the House of Commons website as:http://www.publications.parliament.uk/pa/cm201011/cmselect/cmcumeds/writev/464/034.htm 

Achieving Great Art for Everyone? Still hard facts to swallow.

A preliminary scoping study on comparative investment in front line arts organisations between London and the Regions in the context of wider ‘cultural’ public and private expenditure on the arts and culture.

On November 4th, Arts Council England published its ‘Strategy for a Decade’ to achieve its Mission of ‘Great Art for Everyone’. On the same day it published the details of its new structures for funding and invited applications from all of its existing ‘Regularly Funded Organisations’ and others to apply to the newly designated "National Portfolio Funding Programme". Applications are invited by 24th January 2011. The Arts Council intends to take decisions on funding levels for the new infrastructure of front line arts organisations across England to April 2015 by the end of March 2011.

Consultation on the new strategy was conducted before the scale of government reductions in funding was known. It is also not known whether Regional analysis – such as that contained within this report – formed part of the strategy making process or informed the design of new funding structures.

This preliminary scoping study using newly available data returns to the methodology of the Policy Study Institute report of 1982 which revealed the differentials in Arts Council investment levels between London (and London with its hinterland) and the rest of the country. An Arts Council report for the CSR in 2006/7 reaffirmed these disparities. Our research suggests that the differentials may have increased substantially. The numbers provide their own challenges on the extent to which this new Strategy and the funding decisions that are intended to be made in March 2011 to achieve it will address these existing imbalances in the new financial circumstances of 2010. Experience suggests that – without intervention by interests beyond London – the situation will worsen.

The researchers acknowledge that a further level of analysis is required to complete ‘due diligence’ but believe that the report can be treated – at this stage - as ‘authoritatively indicative’ and robust enough to inform policy thinking.

Peter Stark & Christopher Gordon 6th November 2010.


Commentary Key facts

1] This report is written with full acknowledgement of the critical roles of London as an ‘alpha’ global city, as the nation’s capital, as a key attractor of international tourism and as a supercharger for the creative industries.

2] Such acknowledgement, however, does not lead us to believe that the current disposition of resources between London and the rest of England is defensible as a basis for national cultural policy. We argue for a capital city that "irrigates not drains" (Lord Bragg) and for the determined development of cultural strength in the major cities beyond the expanding metropolis.

3] We acknowledge that Global Cities require Global cultural assets to maintain their competitive edge. We do not accept that such resources should only be located in London and treated as differently as they are.

4] (Almost?) all of the major national cultural organisations based in London receive 100% of their public funding from the DCMS or ACE directly (Almost?) all of the nationally important cultural organisations beyond the capital are required to raise match funding from local government.

5] The four best funded National Museums in London receive more funding (£161m) than all of the ‘front line’ arts organisations in the country outside London, combined (£151m). The total funding for all of the ‘front line’ arts organisations in every region outside London (excluding the RSC) is less than the single grant to the Royal Opera House (£26.3m).

6] In 1982 the PSI study "Hard Fact to Swallow" found Arts Council expenditure in London in 1980/81 to be £3.37 php against £0.66 php (19.6%) in the rest of England. In 30 years of steadily increasing public and Lottery funding and rhetoric of regional development the situation is worse. For 2011/12 the comparator is London £21.92 php against £3.44 php (15.7%)

The Arts Council’s new strategy to achieve "Great Art for Everyone" within a decade must embrace and target the whole of England. London dominance at the current levels can no longer be acceptable.

· Arts Council England (ACE) grants to its 842 ‘front line’, Regularly Funded Organisations (RFOs) in 2011/12 will total £319m. 53% of this expenditure is on London organisations and the average size of grants to them is £609,000 against an average in the rest of the country of £266,260.

· ACE grants to RFOs in London produce a return of £21.92 per head of population (php) against an average for the rest of the country of £3.44 (16%). If the South East (SE) is taken with London the £php is £11.33 against £3.87 (34%).

· DCMS directly funded ‘front line’ cultural organisations will receive £409m. in 2011/12. Of this we estimate that at least £371m (91%) benefits London directly (Appendix 2)

· Adding DCMS and ACE spending on the ‘front line’ produces total grants of £728m in 2011/12 of which £540m (74%) is London based, a return of £70.36 php to London against an average in the rest of the country of £4.31 php.

· Lottery grants in the Arts and Heritage since 1995 total £6,536m. Of this £2,003m (31%) has been awarded in London. This represents a return of £261.16 php in London against £103.51 php in the rest of the country.

· London has the lowest percentage of households in the country playing the Lottery (32% with NE at 56% highest) and their average spend is low (£4.20 with NE at £4.80 highest)

· Private sector sponsorship of the Arts (broadly defined) is estimated at £450m in London (76%) against £139m across the whole of the rest of England.


Table 1.Arts Council England (ACE) planned direct spending on Front Line cultural organisations for 2011/12

Source

East

East Midl’s

London

North East

North West

South East

South West

West Mid’ls

Yorkshire

Totals

£

£

£

£

£

£

£

£

£

£

ACE RFO [1]

10,257,586

10,456,726

168,134,292

13,646,484

22,847,904

13,601,153

15,551,260

44,909,816

(6,294,674) [1]

38,615,142

25,724,757

325,129,978

(6,294,674) [1]

318,835,304

No of RFOs

34

55

276

70

108

53

77

63

106

842

Average size

302,000

190,000

609,000

195,000

212,000

257,000

202,000

612,939

242,686

378,664

Population [1]

5,717,400

4,429,400

7,668,300

2,570,600

6,874,100

8,368,500

5,210.400

5,408,400

5,217,500

51,464,600

£ph ACE RFO [1]

1.79

2.36

21.92

5.30

3.32

1.63

2.98

7.14

4.93

6.20

£ph outside London

3.44 [1]

£ph for London and the SE [1]

11.33

£ph outside London and SE

3.87


Table 2.ACE planned direct spending (as above) for 2011/12 showing National Companies separately

Source

East

East Midl’s

London

North East

North West

South East

South West

West Mid’ls

Yorkshire

Totals

£

£

£

£

£

£

£

£

£

£

ACE RFO

10,257,586

10,456,726

168,134,292

13,646,484

22,847,904

13,601,153

15,551,260

44,909,816

25,724,757

325,129,978

Less National Companies [1]

(80,978,347)

(14,831,195)

(6,294,674) [1]

(95,809,542)

(6,294,674) [1]

ACE RFO excl. National Cos

10,257,586

10,456,726

87,155,945

13,646,484

22,847,904

13,601,153

15,551,260

23,783,947

25,724,757

223,025,762

No of RFOs remaining

34

55

272

70

108

53

77

62

106

837

Average size

302,000

190,000

320,426

195,000

212,000

257,000

202,000

383,612

242,686

266,458

Population

5,717,400

4,429,400

7,668,300

2,570,600

6,874,100

8,368,500

5,210.400

5,408,400

5,217,500

51,464,600

£ph ACE RFO excl Nat. Cos

1.79

2.36

11.36

5.30

3.32

1.63

2.98

4.40

4.93

4.33


Table 3. DCMS direct funding of ‘front line’ cultural organisations [1] – principally ‘National’ Museums + the position with the addition of ACE National Companies + with the addition of all ACE RFOs

Source

East

East Midl’s

London

North East

North West

South East

South West

West Mid’ls

Yorkshire

Totals

Population

5,717,400

4,429,400

7,668,300

2,570,600

6,874,100

8,368,500

5,210.400

5,408,400

5,217,500

51,464,600

DCMS Direct [1]

371,369,000

29,494,000

1,604,000

6,827,000

409,294,000

£ph DCMS

48.43

4.29

0.30

1.31

7.95

+ ACE Nat. Companies [1]

80,978,347

14,831,195

95,809,542

Total

452,347,347

29,494,000

1,604,000

6,827,000

505,103,542

£ph ACE Nat Cos. + direct DCMS

58.99

4.29

0.30

2.74

1.31

9.81

+ other ACE RFOs

10,257,586

10,456,726

87,155,945

13,646,484

22,847,904

13,601,153

15,551,260

23,783,947

25,724,757

223,025,762

Total DCMS direct + all ACE RFOss

10,257,586

10,456,726

539,503,292

13,646,484

52,341,904

13,601,153

17,155,260

38,615,142

32,551,757

728,129,304

£ph ACE RFO

1.79

2.36

70.36

5.30

7.61

1.63

3.29

7.14

6.24

14.1

£ph outside London

4.31


Table 4. Total Lottery Arts and Heritage [2] Cultural spending from 1995 – 4th October 2010 analysed by Region


Source

East

East Midl’s

London

North East

North West

South East

South West

West Mid’ls

Yorkshire

Population [1]

5,717,400

4,429,400

7,668,300

2,570,600

6,874,100

8,368,500

5,210.400

5,408,400

5,217,500

£,

£

£

£

£

£

£

£

£

ACE Lottery [1]

132,738,509

129,996,522

1,154,125,013

198,972,962

302,091,773

259,641,697

188,891,715

351,951,574

202,263,127

No. of awards [1]

3,055

3,394

10,740

3,446

5,653

6,296

4,684

4,938

5,001

Average size

43,450

38,301

107,460

57,740

54,439

41,239

40,327

71,274

40,445

Heritage Lottery

288,129,221

232,201,424

848,518,131

215,741,570

500,649,432

442,679,001

410,547,719

324,065,163

352,843,075

No. of awards

1,910

1,676

1,941

1,049

1,982

2,101

2,032

1,846

1,782

Average size

150,852

138,545

437,155

205,664

252,598

210,699

202,041

175,550

198,004

ACE & HLF combined

420,867,730

362,197,946

2,002,643,144

414,714,532

802,741,205

702,320,698

599,439,434

676,016,737

555,106,202

£ph ACE

23.21

29.35

150.51

77.40

43.95

31.02

36.26

65.07

38.77

£ph H’tage

50.40

52.42

110.65

83.93

72.83

52.90

78.79

59.92

67.62

£ph together

73.61

81.77

261.16

161.33

116.78

83.92

115.05

124.99

106.39


Table 5. Household expenditure on the Lottery analysed by Region [3]


Source

East

East Midl’s

London

North East

North West

South East

South West

West Mid’ls

Yorkshire

% h’holds

43

45

32

56

44

34

35

44

40

Av £ pw

4.40

4.50

4.20

4.80

4.20

4.10

4.50

4.50

3.50

Table 6. Private Sector sponsorship [4]


Source

East

London

North East

North West

Midlands. East & West

South East

South West

Yorkshire

Total

Arts & Business

16,000,000

450,000,000

12,000,000

18,000,000

19,000,000

40,000,000

17,000,000

17,000,000

589,000,000

Percentage

Totals

%

London

450,000,000

76%

London and SE [1]

490,000,000

83%

Total outside London

139,000,000

24%

Total outside London and the SE

99,000,000

17%


Maps of English Regions and London’s immediate catchment


[1] Derived from the comprehensive list released by ACE on 26 th October 2010 and reallocated to regions as per attached appendix 1

[1] Welsh National Opera is a National Company of Wales funded to tour into England and incorrectly shown as an RFO attributed to the West Midlands. It is excluded

[1] Welsh National Opera is a National Company of Wales funded to tour into England and incorrectly shown as an RFO attributed to the West Midlands. It is excluded

[1] On 27 th May 2010 ONS released the 2008-based sub-national population projections used here

[1] In addition to RFO funding ACE also made 2,490 awards totalling £64,900,000 across England through its Grants for the Arts programme in 2009/10 at an average grant size of £23,220. No regional breakdown of this sum is available but it is thought to be fairly evenly distributed against population.

[1] These php figures use the National RFO total less the funding provided to Welsh National Opera through the West Midlands.

[1] London has historically argued that its wider catchment must be taken into account in calculating its £ per head benefit. A more sophisticated analysis would seek to add the Southern part of the Eastern Region to this analysis as the effective ‘travel to culture’ catchment of the capital.

[1] The Royal Opera House, English National Opera, Royal National Theatre, Royal Shakespeare Company and The South Bank Centre constitute a distinct group of major clients within the Arts Council enjoying a different order of funding (each receiving a grant 3 to 4 times larger than any other client) and – until very recently – separately identified within the Arts Council as “National” clients. The PSI report addressed them as such. Only the RSC tours to any significant extent (very substantially into London).

[1] Welsh National Opera is a National Company of Wales funded to tour into England and incorrectly shown as an RFO attributed to the West Midlands. It is excluded

[1] Welsh National Opera is a National Company of Wales funded to tour into England and incorrectly shown as an RFO attributed to the West Midlands. It is excluded

[1] The absence of £ 45.567 ,000 “Renaissance in the Regions” funding from the regional analysis is regretted. Despite every effort being made the figures are yet to be available.

[1] As released by DCMS on 21 st October with adjustments made as per attached appendix 2. NB the allocation of funds from London based institutions to their regional satellites is done as an exceedingly rough estimate to indicate awareness of the existence of these satellites.

[1] The Royal Opera House, English National Opera, Royal National Theatre, Royal Shakespeare Company and The South Bank Centre constitute a distinct group of major clients within the Arts Council enjoying a different order of funding (each receiving a grant 3 to 4 times larger than any other client) and – until very recently – separately identified within the Arts Council as “National” clients. The PSI report addressed them as such. Only the RSC tours to any significant extent (very substantially into London).

[2] F unding from the Millennium Commission has been excluded from the “cultural” category. Had it been included, the London ‘skew’ would have been increased

[1] On 27 th May 2010 ONS released the 2008-based sub-national population projections used here

[1] Source DCMS total awards at 4/10/2010 by ACE since 1995

[1] Source DCMS total awards at 4/10/2010 by ACE since 1995

[3] Source ONS Regional Trends 42 released 24/6/09 showing % of households participating in each region and average weekly spend per household

[4] Source. Arts and Business latest analysis. Note that Arts and Business combine East and West Midland into a single “Midlands” figureBusines

[1] London has historically argued that its wider catchment must be taken into account in calculating its £ per head benefit. A more sophisticated analysis would seek to add the Southern part of the Eastern Region to this analysis as the effective ‘travel to culture’ catchment of the capital.