House of Commons - Work of Arts Council England - Culture, Media and Sport Committee

Work of Arts Council England - Culture, Media and Sport Committee Contents

5 Geographical distribution of funding

Rebalancing our Cultural Capital

48. From London to Liverpool, from Bristol to Birmingham, great culture naturally centres around great cities. London is a spectacularly successful example. Sir Peter Bazalgette told us: "London is arguably the world's capital of arts and culture. I defy you, even if you go out in the evening in New York or Paris or Rome or Sydney, to find even a third as many arts events going on. It is quite extraordinary, the richness of London, the product of lottery spending and the product of years of increasing arts expenditure by Governments until 2010. Nobody is getting too much. That is something we must preserve, but there is an imbalance."[76]

49. The Core Cities Cultural Officers' Group, representing England's eight largest city economies outside London, made well the point that a strong local cultural sector and asset base is "critical to the economic success of cities".[77]The Group acknowledges the role that cities ought to play in the wider national arts infrastructure. When the author and broadcaster Lord Bragg observed that capital cities should "irrigate rather than drain",[78] he might well have included other major cities too. Munira Mirza told us: "If we look at the arts sector as a national system, as one whole rather than lots of different parts, the benefits of the work that is produced in London and in Liverpool has a benefit far beyond those local boundaries."[79] Councillor David Budd of the North East Culture Partnership acknowledged the existence of a very important "trickle-down effect" of funding from London to the regions. He added: "Yes, of course, we would prefer the funding to be slightly different than the way that it is, but again we are talking about balance, not enormous, rapid change, because that could potentially be quite disruptive. I think the balance is askew."[80]

50. The issue of the geographical distribution of funding has been studied carefully by the authors of Rebalancing our Cultural Capital (ROCC) published in October 2013. The authors, Peter Stark, Christopher Gordon and David Powell, start by giving some insights into their overarching vision in the report's executive summary:

—

51. The authors acknowledge a decentralising direction of travel signalled (if not implemented) in 1965 by Jennie Lee's white paper, A policy for the arts: the first steps. The additional resources for the arts made available, throughout the country, since 1995 by the National Lottery have helped establish a nationwide cultural infrastructure. However, there has been a consistent trend to favour London, and not just one exercised by the Arts Council. The DCMS directly funds 16 major national cultural organisations, a majority of which are based in London. In 2012/13 some 90% of the £450 million available was "of direct benefit to London."[81] The Rebalancing report goes on: "Combining this direct DCMS expenditure with that of Arts Council England produces a benefit per head of population in the capital of £68.99 compared to £4.58 in the rest of England (6.6% of London levels)."[82] Figures are also given for overall National Lottery funding for the arts since 1995: by 2 September 2013, Arts Council England had distributed almost £3.5 billion of these new funds across England, of which London received £1.35 billion (39.1%). This translates as £165.00 per head of population in London, compared to £46.77 per head in the rest of England. Throughout the report, London is defined as the area over which the Mayor of London and the London Assembly have jurisdiction (with a population of 8.2 million).

52. The report's authors argue that London also benefits disproportionately in terms of private sector funding: 82% of private sector funding for the arts (£660 million in 2011/12) was awarded to London-based organisations. "We observe that new public sector support to encourage philanthropic giving could exacerbate rather than ameliorate the situation with £18.5m (61%) of the first £30.5m of arts endowment funding under the Catalyst Programme going to London."[83]

53. In the likely absence of additional funding for the arts, the ROCC authors put forward the following proposal:

We advocate the creation of a new National Investment Programme of £600m over the five years of a parliament, specifically charged with investment in new cultural production outside London.

—

54. For the regions outside London, the outcome would be an annual increase on current levels of allocation of about £120 million, or £600 million over the full life of a Parliament. Taking into account the accessibility of London-based institutions, the report's authors suggest that the principal beneficiaries of this redistribution should be the Greater North, the Midlands and the South West (while acknowledging "border" issues and the positions of the margins of the south, south east and the east of England).

55. At least some of the figures cited in Rebalancing our Cultural Capital can be questioned. In relation to the £600 million "National Investment Programme" proposed in Rebalancing our Cultural Capital, Sir Peter Bazalgette told us: "I think the authors of the report themselves agree that they misunderstood the level of our lottery funding. They thought it was £350 million a year. It is currently running at about £240 million a year, so we do not have those funds to deploy."[84]

56. For its part, the DCMS told us that the Government "cautions against a simplistic distribution per head of population". One consequence could be to compromise the Arts Council's discretion to create 'clusters' or concentrations of cultural excellence which serve a community beyond their immediate locality. The Government also states that "London's role as a preeminent arts and cultural hub for the whole world must not be undermined."[85]

57. The New Vic Theatre in Staffordshire—the county's only National Portfolio Organisation—provides a response to the Rebalancing Our Cultural Capital report that is typical of many we received in our call for evidence:

The Rebalancing Our Cultural Capital report identifies an imbalance that those of us working in regional arts have long sensed; but the scale of the imbalance is surprising nevertheless. As our capital city, the focus of a big tourist industry, a thriving business area and home to upwards of 8m people, a disproportionate investment in London is not unreasonable. However some degree of rebalancing would indeed benefit local economies, and would spread some of the other benefits that come with having a creative community.

[…]

The PLACE report

58. The authors of Rebalancing our cultural capital published a further report, which covers similar ground to the evidence they submitted to us.[87] This sequel is entitled the PLACE Report: Policy for the Lottery, the Arts and Community in England (April 2014). PLACE draws a clear distinction between the purposes of tax-derived funding (Arts Council England's grant in aid) and National Lottery revenue distributed by ACE (the Arts Lottery). It takes as read the critical importance of the Arts Council's role in maintaining the nation's core, high-quality cultural infrastructure through grant in aid, but questions fundamentally the Arts Council's stewardship of the National Lottery funds, which are provided for different purposes and for far wider public benefit than its Treasury grant.

59. The PLACE report begins by observing that Policy Directions issued by the Secretary of State under the National Lottery etc. Act 1993 to Arts Council England (and all other Lottery distributors) in November 2007 state that:

Arts Council England shall take account of the following in distributing National Lottery Funds:

· the need to increase access and participation for those who do not currently benefit from the cultural opportunities available in England

· the need to foster local community initiatives which bring people together, enrich the public realm and strengthen community spirit

· the need to support volunteering and participation in the arts and community arts

· the need to involve the public and local communities in making policies, setting priorities and distributing money

· the desirability of ensuring equality of opportunity, of reducing economic and social deprivation and ensuring that all areas of England have access to the money distributed.

60. The report's authors argue: "The Arts Lottery has disproportionately benefited the most prosperous and 'arts engaged' communities in England, which are often also those contributing least to the Lottery. Some of the least arts-engaged and poorest communities, meanwhile, who are contributing most heavily to the 'arts good cause', receive the least return." Two contrasting examples are given:

—

The authors add: "Taking into account differences in the playing frequency of households and the capital city's extended cultural catchment, London, the South East & East have a surplus from the Arts Lottery to date of £416 million funded by the net contributions of the North (£216 million), the Midlands (£140 million) and the South West (£60 million)."

61. The PLACE report notes that Lottery proceeds are increasingly being used to fund organisations and regular programmes of work that were previously funded through grant in aid. "Additionality, the guiding principle that Arts Lottery funds should be for 'new and additional' activity and not act as a substitute for grant in aid, has been eroded and could be lost under current plans."

62. As well as additionality, covered in more detail above,[88] there is also the question of where in the country the Lottery proceeds originate. In both these ways, it could be argued, the National Lottery is fundamentally different to grant in aid. One question we considered was the extent to which Lottery players should expect to see, and benefit, from good causes within reach. Dame Liz Forgan told us: "I agree with you that slightly different considerations do apply to lottery money. The source of that money does matter. I don't mean that everybody has to have the same teaspoonful, but I think it matters."[89]

Fairer funding

63. The current Chair of the Arts Council, Sir Peter Bazalgette, described the ROCC and PLACE reports as "extremely welcome" in that they drew attention to the imbalance of funding in favour of London. He said that the Arts Council was addressing "years of imbalance" carefully. He pointed to progress so far:

64. The figures given by Sir Peter Bazalgette for current lottery spend are significantly at variance with those given in the ROCC report. The latter suggested that, in 2012/13, 45% of the Arts Lottery funding was awarded in London. The authors of the ROCC report have submitted supplementary evidence[91] which sheds a little light on this apparent discrepancy: more recent data made available by the Arts Council includes a "national" category of lottery funds which is separated out from London and the regions. The effect of this is to reduce London's overall share of lottery funds to 31.6% in 2012/13. We received evidence from the editor of the online magazine ArtsProfessional, which begins: "The analysis in Arts Council England's submission to the Select Committee has been selectively constructed to present a case that undermines confidence in the findings of the ROCC report, which clearly demonstrates a geographic funding imbalance favouring London."[92] The editor of ArtsProfessional argues for greater transparency in the data which the Arts Council possesses. However, on any estimate, London receives a share of lottery funding (and grant in aid funding) that is out of all proportion to its population, an imbalance recognised by the Chair of the Arts Council on Arts Council figures.[93]

65. We have heard strong arguments in a favour of a shift—a gradual shift—of arts funding from London to the regions.[94] One way of effecting such a shift would be to focus on establishing greater fairness in lottery funding, with other major funding streams broadly distributed as they currently are. One of the authors of the ROCC report, Peter Stark, summarised a proposal along these lines:

66. Munira Mirza counselled caution in the pace of any shift in regional arts funding: "The trend is that more lottery funding is going out to the rest of the country, and that has gone from a ratio of about 60:40 to the rest of the country to 70:30. So that trend has happened, and I think importantly it has happened in a gradual and sustainable way rather than just assuming that you give back in an equal measure lottery funding to the arts on the basis of who has spent money on lottery tickets; you would end up with a really bizarre arts funding system I think. You have to fund where there is talent, growth, potential and it takes time to build up an arts infrastructure."[96]

67. We find merit in the recommendations in Rebalancing our Cultural Capital for bringing about a fairer allocation of support for the arts (see paragraphs 53 and 65 above). A redistribution of funds along the lines suggested by the authors of Rebalancing our Cultural Capital would do much to redress the imbalance in funding to benefit England as a whole. We believe this could be achieved in a timely fashion without threatening London's world status as a cultural centre.

Local decision-making

68. Among the recommendations of the PLACE report is one that speaks to concerns voiced in evidence we heard from the North East Culture Partnership. Written evidence from the latter notes: "There has been a tendency for ACE to partner with national bodies. Such partnerships often fail to build in meaningful local knowledge. ACE's 'Area' definitions count Berwick-upon-Tweed as in the same 'Area' as Knutsford. To use such 'Areas' to assess balance of investment across the country is clearly inappropriate."[97] John Mowbray of the Partnership told us: "We also find that we are much further removed from the decision-making process. Although we have some very good staff in the Arts Council, for example, the decisions for the north-east are made sometimes in Manchester but primarily in London … The understanding of what is happening regionally and where projects will have an impact is not there anymore".[98] Alan Davey disputed this, pointing out to us that the Arts Council's Northern Area Council counts among its membership "many senior local government members … including the leader of Gateshead Council".[99]

69. In respect of the Arts Lottery, the PLACE authors propose that decision-making would be devolved to appropriate structures operating at regional or multi-authority level, with weighted allocations that recognised advantage and disadvantage in terms of geographical, economic and social factors.[100] However locally meaningful funding decisions are made, Sir Peter Bazalgette reminded us of competing priorities: "The trick there is to put the money where it is needed, but not to damage the arts infrastructure of arguably the world's capital of arts and culture, so it is a balance, but we are working on it and we are tackling it."[101] The stated aim by the Chair of the Arts Council to tackle the funding imbalance in favour of London is welcome. Sir Peter's acknowledgment of the unfair situation contrasted with the Minister's surprisingly point-blank refusal to recognise it.[102]

70. We agree with the Chair of the Arts Council that the trend in shifting lottery funds outside London should continue. However, we believe the pace of change should be much faster than it has hitherto been. The Arts Council is well-placed to be the agent of this distribution—but only if it engages fully with elected local authorities and regional strategic organisations with the best local and regional knowledge.

Local authorities

71. With the exception of libraries, local authorities are not under a statutory duty to make adequate provision for arts and culture. The Local Government Association reminded us of a very good reason why they invest in culture: "Ultimately, councils are about people and places and culture—in all its ever-changing forms—is absolutely central to how people live their lives."[103] The Association went on to provide some background on the scale of their support for the arts, and of their relationship with the Arts Council:

It follows that the relationship between councils and Arts Council (England) (ACE) is absolutely critical. Outside London, councils spend as much as ACE on cultural infrastructure and co-fund around 60 per cent of ACE's 695 National Portfolio Organisations (NPOs).

104

72. For its part, the Government recognises the "vital role" played by local authorities, the largest funders of arts and culture. The DCMS told us: "We make the case to local authorities of the value—economic, social and cultural—of arts and culture on their local areas."[105] The Minister also told us that "local authorities that get culture, that understand its importance, thrive."[106]

73. The Trade Unions Equity and BECTU[107] have both argued in favour of introducing a statutory obligation on local authorities to fund the arts. Equity told us: "the combined effect of national and local authority cuts to the arts is affecting the English regions particularly hard. As local government is the biggest funder of the arts, the biggest pressure on arts and culture in the regions has been caused by the withdrawal of arts funding by local authorities, which are having to make very considerable cuts to their budgets. As is emphasised in the Rebalancing Our Cultural Capital report, stable and empowered local government is a prerequisite for any sustainable approach to arts programmes across the country. This is why Equity is calling for a statutory duty on local authorities to fund the arts."[108] The Minister told us he opposed this idea:

109

74. The points made here by the Minister are well-taken. We recommend that the Government emphasises to local authorities the advantages associated with an appropriate level of engagement with cultural policy and provision—including what funding opportunities ought to be developed. However, we stop short of recommending the introduction of statutory requirements of a kind that rightly applies to libraries.

75. Like the Arts Council, local authorities have found it challenging to support the arts in straitened economic times. The Local Government Association provided us with the following recognition both of the long term economic importance of the arts and of the important interplay between them and the Arts Council:

The LGA's year-long focus on the link between investment in the arts and economic growth paved the way for ACE and the Department for Culture, Media and Sport (DCMS) to secure the Treasury's support and limit the reduction in arts funding to five per cent in the 2013 Spending Review, compared to an average seven per cent cut across DCMS. This was a good result for councils because, as so many organisations are co-funded with ACE, less pressure from the ACE side meant less knock-on pressure on councils.

110

While noting the key cultural investment made by London's boroughs, the Greater London Authority told us that at a time of considerable budget reductions in local authorities, much of this investment has come under pressure and cultural services have inevitably been affected. In 2013, all London boroughs decreased their culture budgets, leaving over 20% of the boroughs without a dedicated arts service.[111]

76. The Arts Council said that several local authorities had already implemented severe cuts, including those committed to investment in culture in the recent past. It cited the 50% cut in Newcastle, and 100% reductions in Westminster and Somerset. "Others have warned of significant cuts to come as the final year of the spending round approaches. Birmingham have indicated reductions of 20% on grants to key arts organisations in the 2014/15."[112]

77. Sir Peter Bazalgette acknowledged the important role the Arts Council has to play in encouraging and informing local authorities of their obligations and interests in maintaining arts provision. He told us:

113

78. Edward Vaizey MP, when asked if he thought there was a danger that some local authorities would just assume the Arts Council would step in to make good any funding shortfall, told us:

114

79. The Minister also said: "It is important that the Arts Council does stress to local authorities it is there as a partner, rather than a funder of last resort—somebody to bail out arts organisations that the local authorities are walking away from."[115] When questioned on Westminster's withdrawal of arts funding, the Deputy Mayor of London for Education and Culture, Munira Mirza, said: "Westminster is an anomaly because it has so many national institutions, so I think the Arts Council, understandably, has to continue that funding because the impact of those organisations is far beyond Westminster. These are organisations that tour. They produce elsewhere around the country."[116] We have no reason to question the credentials of the many recipients in Westminster of National Lottery grants distributed by the Arts Council—but by no stretch of the imagination can they all be considered national institutions; certainly no more so than similar recipients in other parts of the country.[117] Sir Peter Bazalgette referred to the presence of genuinely national institutions in Westminster; however, he also said: "I deplore Westminster cutting its arts investment."[118] We share his view.

80. The Arts Council should take a far more robust stance than it already does with local authorities, such as Westminster, who show little inclination to support the arts. There is little point in pumping public money into areas that do not particularly want or need it, or do little themselves to support the arts.

81. Westminster City Council told us that they had indeed ended a commissioning programme for arts projects, though they retained one full-time "Cultural Partnerships Officer". Apart from that, their commitment to culture seems to extend no further than the use of planning obligations requiring the provision of public art and a "hope" that some of the council's ward budget programme would continue to be directed to arts and culture projects.[119] Contrasting evidence was received from the Liverpool Arts Regeneration Consortium who told us:

In addition to a mature, strategic relationship with Arts Council, the Liverpool cultural sector is lucky to have a local Council that believes in the importance of a culture programme that drives inward investment, economic and social regeneration. Liverpool has therefore become an exemplar of how collaborative working between Arts Council, local government and arts and cultural institutions can maximise artistic, economic, social and international impact. This approach is aptly demonstrated by Liverpool Mayor, Joe Anderson, who in April 2013, publicly stated:

120

82. The Minister told us he had not challenged Westminster City Council on the level of its support for the arts,[121] and indeed could not immediately recall having had a single conversation with any local council.[122] We were staggered by this admission. Local authorities rightly have responsibility for coming to their own decisions on what funding to provide to culture in their areas. That is no reason for the Minister, with his strategic oversight of arts policy, to shy away from challenging any in danger of acquiring the status of cultural pariahs. Any Arts Minister should use his or her position to champion the arts at every opportunity, including in dialogues with local authorities. Like the Chair of the Arts Council, we deplore the decision of Westminster to cut its arts investment, relying instead on funds from lottery players in less well-served parts of the country.

Quality first

83. In cities and in rural areas throughout England, examples of excellence in art abound. That much is clear from the many submissions we were fortunate enough to receive following our call for evidence. Many have argued that "excellence" should be the primary consideration when making funding decisions—though opinions naturally differ as to what constitutes excellence. Ingenious told us: "ACE does not distribute funds pro rata to population because it is an arts organisation, not an instrument of social distribution. If it had distributed funds on the explicit basis of addressing regional and local 'imbalances', capitationally [sic] defined, it would doubtless have been accused of social engineering, sacrificing excellence, sending out mixed messages and engaging in another confusing U turn."[123]

84. In its written evidence to us, the North East Culture Partnership said its main concern was that geographical distribution of funding flowed from centralized decision-making structures, which favoured national institutions and London-centric versions of excellence.[124] It also told us: "Traditional notions of 'excellence' sometimes tend to push more local or participatory versions to the margins."[125] In the context of the Partnership's 15-year vision, John Mowbray said: "We have used the expertise and experience we have to try to focus it, so not fragmenting it too far."[126]Munira Mirza also alluded to wider considerations of excellence when she told us: "I think fundamentally arts subsidy should be about providing the best for the most and therefore arts organisations should try, they should show that they are trying to widen their audience and that they are using education to build an audience and to overcome some of the barriers that might exist.[127] We agree with all these sentiments. Public funds should be used to support cultural activities that demonstrably contribute to the highest standards of excellence in art, engagement of communities and sustainable economic growth.

85. It is important to avoid fragmenting funding to the extent that few benefit. Inevitably, regional centres of excellence will attract a larger share of funding. However, cultural hubs outside London ought to be getting a greater proportion than they currently are.

86. Of course, the Arts Council can only fund individuals, groups and organisations of which it is aware. There is a body of evidence to suggest that applications for grants are not forthcoming from some areas of the country. Blackpool was one such example.[128]Alan Davey acknowledged that the Arts Council knew of some parts of the country where it was not getting enough applications.[129] Edward Vaizey told us: "if you look at the percentage of applications that are made to the Arts Council for NPO status, broken down by region and the outcome in terms of the percentage, they are broadly similar ... there is broadly speaking a balance between people who apply and people who get rewards. Could we do more to encourage high-quality applications from arts organisations outside London? Yes, I certainly think we could do that."[130] He also said: "It must be quality first, but there is nothing to stop the Arts Council being on the ground encouraging organisations to apply and investigating why high quality arts organisations may not be applying."[131]The Minister is right.

87. The Arts Council should be more proactive when it comes to encouraging high quality applications from around the country and establishing the underlying reasons for any current imbalance.

Recovery

88. The DCMS told us: "On coming to power, this Government took swift and decisive action to address the problem of the national deficit. DCMS has played a full part in those efforts and pays tribute to the Arts Council for doing so also."[132] The Minister was non-committal over the prospects of any increase in arts funding to follow from future economic growth:

133

89. We note the Arts Council's undertaking: "If our grant in aid cuts were to be restored in the event of economic recovery we would use the funds to strengthen regional provision."[134] It is not immediately clear how "regional provision" will be defined in practice. However, it is worth noting that, in relation to television programme production, the Communications Act 2003 provides a precedent by its reference to the "M25 area".

90. Just as the Arts Council has played its part in helping to tackle the deficit, so should it be considered a beneficiary in the event of economic recovery. Once the Government is satisfied that resources allow, it should consider an increase in Arts Council grant in aid. This new money should be earmarked for the English regions, beyond the M25 area.

91. The Arts Council plays a vital role in safeguarding, consolidating and building the nation's cultural infrastructure and enhancing its quality of life. It takes measured risks to develop the arts and is showing clear signs of improving the transparency of its decision-making. Many will doubt and dispute the wisdom of some of the Arts Council's funding decisions, but this is an inevitable consequence of a vibrant cultural sector of which our country should be proud. Much is down to the hard work, professionalism and dedication of the staff who work for the Arts Council. They have an experienced chief executive and a chair who shows signs of building on the foundations bequeathed him by his predecessor. The Arts Council is well-placed to tackle the clear imbalance of funding that favours London unfairly. It must do so with greater urgency if it is to realise its declared ambition to engineer the provision of great art and culture for everyone.

76 Q 209 Back

77 Core Cities Cultural Officers' Group (WAC0175), para 4 Back

78 Cited in Peter Stark, Christopher Gordon and David Powell, Rebalancing our Cultural Capital, October 2013 Back

79 Q 122 Back

80 Q 151 Back

81 Peter Stark, Christopher Gordon and David Powell, Rebalancing our Cultural Capital, October 2013 p 8 Back

82 Ibid. Back

83 Peter Stark, Christopher Gordon and David Powell, Rebalancing our Cultural Capital, October 2013 p 11 Back

84 Q 200 Back

85 DCMS (WAC0138) paras 31-32 Back

86 New Vic Theatre (WAC0050), paras 4.1 and 5.1 Back

87 Peter Stark, Christopher Gordon and David Powell (WAC0157) Back