Conclusions and recommendations
How culture enriches and improves our lives
1.In addition to its own intrinsic value, culture plays an important role in helping to deliver a wide range of policy objectives. There are innovative projects all across the country where culture supports other policy objectives, like health, education and economic development. We believe it would be helpful to publicise these projects more and also capture the lessons learned. The Department for Culture, Media and Sport (DCMS) should continue to work with the Department for Communities and Local Government (DCLG) to ensure that case studies and best practice are effectively shared with local authorities. The White Paper was a welcome indication that this collaboration has begun. (Paragraph 14)
The current funding situation
2.The biggest impact of local authority cuts to culture is likely to fall where the cultural offering is already weak with the result that those with most to gain from cultural investment will lose out. We welcome the ACE programme Creative People and Places targeted at areas where cultural participation is below the national average. However this funding is limited and cannot come close to, nor is it designed to, replace funding by local authorities. Even with the welcome announcement of the Cultural Citizens programme and pilot, there is a danger that, contrary to the Government’s stated wish to make culture more accessible, it will become less so. We will follow the outcomes of the Cultural Citizens pilot scheme with interest but we strongly reinforce the need for cultural policy, especially in current circumstances, to focus on accessibility of culture and support for the cultural infrastructure, and for this to be given a higher priority in terms of the funding to match this ambition. (Paragraph 23)
3.The impact of Council budget cuts has resulted in very varied responses locally. There remains a risk that as reductions in local government allocations continue, local authorities will only have resources to cover statutory services and will consequently reduce funding for culture. We recognise that it is difficult for local authorities to sustain expenditure on cultural objectives at present. However, some have prioritised it and have shown considerable leadership and initiative in this regard. (Paragraph 26)
4.We welcome the large proportion of funding that the Heritage Lottery Fund spends outside London. However, we are concerned that the largest sums of money that ACE allocates, through Grant in Aid, are still disproportionately given to London-based National Portfolio Organisations and Major Partner Museums, even if many of those NPOs and MPMs tour the country or collaborate with regional and local cultural organisations. We recognise London as a leading cultural asset, but would still like to see a better regional balance, particularly with regard to ACE Grant in Aid expenditure. We believe that cultural organisations in London have more opportunities to increase revenue through alternative streams than organisations in other parts of the country, through sponsorship and philanthropy for example. (We develop this point further in Chapter 5.) (Paragraph 32)
5.Future revenue and sustainability are essential to the viability of any heritage or culture investment, particularly in the context of limited public funding. We recognise the progress that both the HLF and ACE have made in this regard. (Paragraph 34)
6.We welcome the new sense of debate around the issues of evaluation and impact. Whilst we recognise the intrinsic value of culture, we must also be conscious of the value and impact of cultural investment, not just in economic terms, but across the range of policy areas. Evaluation needs to be more consistent, to enable comparisons to be made, so that those bodies which award funding can be assured that public investment is having the intended impact, and can prioritise funding to the areas where it will have the most impact. (Paragraph 36)
New income streams
7.There remains a challenge in obtaining donations for cultural organisations and some cultural organisations do not see themselves as charities. ACE commented that this mentality was hard to shift. We would like to see an awareness-raising campaign led by DCMS, which now also has departmental responsibility for civil society, to ensure that all arts and heritage organisations which qualify for charity status and benefits do so. (Paragraph 38)
8.The Government should consider how to incentivise greater corporate sponsorship and regionally-based philanthropy, including through tax incentives where appropriate. (Paragraph 42)
9.We call on DCMS to work with the Treasury to conduct an impact assessment of the various tax incentives, business rates, VAT regulation and Gift Aid rules on cultural organisations. The Government should also consider expanding existing tax breaks for the cultural sector, further simplifying the Gift Aid scheme, and publicising the estate duty relief schemes. We understand that HM Treasury wishes to use such incentives sparingly, as there is an immediate impact on government income, but ultimately efforts in this area could result in organisations being less dependent on public financing in the future. (Paragraph 43)
10.We support the efforts by ACE and HLF to develop revenue generation and fundraising skills, in order to improve resilience, and would like to see more focus on this area given that it is unlikely that the current funding challenges will recede. We believe that grants to DCMS directly-funded institutions, National Portfolio Organisations and Major Partner Museums, and Heritage Lottery Funding recipients should be conditional upon them sharing best practice with local cultural organisations to improve their skills in revenue generation. (Paragraph 44)
11.Some cultural organisations had successfully increased their revenues, in the face of public funding reductions, whilst also holding onto their social objectives. DCMS should develop more case studies to showcase innovation in revenue generation, across the arts and heritage sectors, which may be able to learn from each other, and make this available across the sector. (Paragraph 45)
12.We call on the new Department for International Trade to work with cultural partners, including ACE, British Council and national institutions to do more to develop cultural trade delegations and international links to showcase UK cultural strengths. (Paragraph 46)
New operational models
13.There is no ‘one size fits all’ model of organisation, nor indeed can new structures provide a panacea to the current funding challenges, but bodies like the New Local Government Network can help others assess what would be most appropriate in the local circumstances, and are currently conducting research into community asset transfer, for example. Although trust status may seem to solve problems in the short term, it needs to bring concomitant powers and flexibility to enable local authority museums to thrive in the longer term. Hub models and inclusion of culture into the local LEP both seem to be helpful, but cannot by themselves provide a sufficient response to the current funding challenges. Other approaches may help too and we await the outcome of the pilot on crowd-funding with interest. (Paragraph 54)
The importance of partnerships
14.One theme which came out very strongly over the course of this inquiry was the importance of partnerships. Partnerships are essential, particularly when operating in a financially challenging climate. Partnerships between cultural organisations and local authorities, with the education sector and with the commercial sector are all valuable. (Paragraph 55)
15.We believe the Great Place scheme is a welcome contribution to bringing the arts and heritage sectors together with local communities to recognise the benefits of investment in culture, and await the outcome of the pilot schemes with interest. (Paragraph 57)
16.Culture is more likely to flourish, and be accessible to more people, where partnerships are strong. There is already strong collaboration between the culture and education sector, and the potential to do even more together. We welcome the inclusion of references to the roles of the Department for Education (DfE) and Department for Communities and Local Government (DCLG) in the Culture White Paper; we wish to see this collaboration continue and go further. (Paragraph 59)
17.We welcome the partnership between ACE and Visit Britain and concur that there is great potential for collaboration around cultural tourism. However, we are concerned that the multiple sources of funding are becoming harder for organisations to navigate. (Paragraph 63)
18.We believe there is also a need to continue to build on the collaboration between the cultural sector and Visit Britain and the other Destination Management Organisations (DMOs) and, whilst we welcome the Cultural Destinations programme, we believe increased public investment is required in this area as it has significant income generation potential. (Paragraph 64)
19.The use of the ‘hub’ model can help ensure that there is some curatorial and sector expertise retained on a county or regional basis, but there is a risk that reductions in public investment will result in the loss of expertise, including curatorial knowledge, hindering the ability of local museums to take up offers of collaboration from national institutions. (Paragraph 68)
20.We fully support the partnerships that national institutions, NPOs and regional entities have already established and recognise that they play an invaluable role, we are concerned that funding pressures at the local level may limit such arrangements. Whilst the hub model will be helpful in terms of building up local capacity and ability to be an intelligent borrower, we believe there is a strong case for a national body to co-ordinate lending and touring, to provide curatorial expertise on collections and also assist with practicalities and costs, such as security, transport and insurance. (Paragraph 69)
21.We believe that national outreach should be a requirement of national funding, from the Department of Culture, Media and Sport, or from the Arts Council England for National Portfolio Organisations and Major Partner Museums. Many national institutions, National Portfolio Organisations and Major Partner Museums have developed partnerships, and indeed the Arts Council England consider outreach plans as part of their assessment already, but we believe this should go one step further and that national organisations should mentor smaller regional organisations—whether museums or galleries or those involved in the performing arts—and this should be a requirement for central government funding. We further believe that recipients should be transparent and accountable about how they are implementing it, for example by setting out percentage of target audience, percentage of time spent touring, percentage of exhibitions lent to other organisations. The Department for Culture, Media and Sport should have strategic oversight of such collaboration and partnerships to ensure that culture is accessible throughout the country. (Paragraph 70)
Diversity and accessibility
22.We welcome the fact that ACE now requires the NPOs to publish their diversity statistics and the emphasis on outreach in funding requirements. The impact of this on diversity performance remains to be seen. As set out in Chapter 2 we believe that there should be a greater emphasis on accessibility to culture and as set out in Chapter 5, we consider that explicit outreach requirements should be a condition of national funding. We further think that a clear emphasis on community-driven culture will help address some of the diversity challenges identified. (Paragraph 77)
Digital technology
23.We agree that there has been great innovation and best practice within the cultural sector in relation to the digital agenda. We believe there is the potential to do more and that it is essential that cultural organisations have digital independence. We further support the ambition to make the UK a world leader in digitisation, which will help support the sector’s aims on outreach and engagement, as well as offering opportunities to increase revenue. We await the outcome of the DCMS digitisation report with interest and believe there is a strong case to have greater national co-ordination on the digitisation agenda, where digital infrastructure is shareable and scalable, and to ensure that smaller and regional entities are included. (Paragraph 85)
Skills and staffing
24.The cultural sector is facing serious skills challenges and we are concerned about the impact of the loss of curatorial and development roles. We welcome the innovative responses in the sector, such as the Clore leadership programme. However, we need to ensure that such support is accessible to smaller entities through on-line learning, and we recommend a requirement for national institutions, National Portfolio Organisations and Major Partner Museums to partner smaller organisations and share expertise and skills. (Paragraph 91)
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12 December 2016