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Tom Fleming / Creative Consultancy Approaches to Public Service Investment and Competition in the Cultural Sector Supporting Evidence for the Ofcom Public Service Broadcasting Review, 2008. tom fleming / creative consultancy / September 2008 Contents 3 Executive Summary 4 1. Introduction 2. The Policy Level: Setting the Framework for the 10 Competitive Ecology 13 3. The Major Institutional Level: Shaping and Driving the Competitive Ecology 17 4. The Smaller Institutional Level: Surviving in a Competitive Ecology 21 5. Conclusions: A Maturing Competitive Ecology 23 Acknowledgements 25 Appendix 1 - Case Studies Approaches to Public Service Investment and Competition in the Cultural Sector 2 tom fleming / creative consultancy / Executive Summary This Paper by the Tom Fleming Creative Consultancy looks at current funding models within the cultural sector as supporting evidence for Ofcom’s 2008 Review of Public Service Television Broadcasting. Its brief was to examine whether there were competitive or institutional models of funding in the cultural sector from which lessons could be learned for the broadcasting sector. Its main conclusion is that the current model of funding for the delivery of public value within the cultural sector can be described as a competitive ecology , within which considerable indirect competition exists, but with very limited direct competition. In examining the competitive ecology for funding in the cultural sector, this Paper introduces the three levels which drive the current model. These are: - The policy level, flowing down from central government through non- departmental public bodies such as Arts Council England (ACE) and Museums Libraries and Archives (MLA). This sets out the framework for the delivery of public service in the cultural sector - The major institutional level, where organisations such as the Tate, British Museum and National Theatre operate in the dual role of funder and funded, with their brand, leadership and capacity helping to shape and drive the overall ecology - The smaller institutional level, where the great majority of cultural organisations exist, competing indirectly for funding from multiple sources, continually having to demonstrate their public service value to survive. At the policy level, the current competitive ecology has been driven from the top down by the ongoing reform of public services and delivery of public value. In the cultural sector, these have been manifested not through the introduction of directly competitive funding mechanisms, but through debate on where the public value in culture is, how it is delivered and who the recipients are. It is an ongoing debate, but one in which recent developments such as ACE’s Arts Debate, the McMaster Review of Excellence in the Arts and Government’s strategy for the creative economy, Creative Britain, have shifted towards a greater focus around individuals, the development of talent, opportunity and the relationship between culture and the wider economy. This Paper shows that the current success of major cultural institutions has been driven by tangible and intangible institutional strengths that enable them to reach large, committed and diverse audiences and transform places and communities in which they operate. These institutional strengths include organisational capacity, the ability to develop meaningful and successful brands, and the use of technology and new platforms. Part of their success in the indirectly competitive model of funding in culture has been the way they have adapted strategies and learning from the overtly commercial world, through innovative business modelling, revitalised relationships to consumers, and a clear focus on their core strengths. Through their position as leaders within the cultural world, backed up by their role as gatekeepers and brokers for funding, they sit between the indirectly competitive ecology of smaller institutions and the policy level. Approaches to Public Service Investment and Competition in the Cultural Sector 3 tom fleming / creative consultancy / Smaller cultural institutions which don’t have the scale, capacity, visibility and brand strength of major cultural institutions, exist in an often fragile manner, competing indirectly for funding from a range of public, third sector and private bodies. While their success may ultimately be seen in the quality of their cultural output and the way they connect with audiences, their sustainability as institutions is often dependent on their ability to demonstrate the relevance of their core artistic mission to broader public service objectives, such as regeneration, social cohesion, education and health. For smaller institutions, the current funding model is often seen negatively because of the way it can lead to a constant struggle for resources, often at odds with the core artistic purpose of an organisation, within a system without clearly defined notions of what sustainability or even ‘public service value’ means. There are a number of initiatives, such as the Government’s Cultural Leadership Programme, which seek to build institutional strength through learning from other sectors and individuals, designed to enable smaller institutions to compete more effectively. However, these are as yet nascent and unevenly distributed across the cultural sector. Three Main Lessons There are three main lessons that can be transferred from the cultural funding model to that of broadcasting. Firstly, the range of tangible and intangible benefits contained within major cultural institutions has been a vital part of their success in delivering public service benefits to large, diverse audiences. Without the scale, capacity, leadership and brand these institutions have, the wider regeneration and societal benefits which have been seen in Southwark, Gateshead or Salford would not have occurred. However, without these institutions learning and adapting models from the competitive commercial sector, they would not have been able to deliver as fully as they have. Secondly, smaller cultural institutions are only now receiving the type of support they require to more successfully navigate the indirectly competitive ecology they exist within. To enable time-squeezed and capacity-poor institutions to compete efficiently and effectively for funding in an environment in which they are mainly reactive, requires investment in leadership, networks and transferable skills from other sectors. This is if the delivery of broader public service benefits is not to run successfully alongside the core artistic mission. Thirdly and lastly, the current model of funding within the cultural sector is moving toward one which will see funders and fitter-for-purpose institutions (of all sizes) developing a common understanding of the way that culture delivers public value. This is to be welcomed as with it should come greater support for innovation and risk within an ecology which rewards excellence in delivery of public service benefits. Approaches to Public Service Investment and Competition in the Cultural Sector 4 tom fleming / creative consultancy / 1. Introduction This Paper sits as supporting evidence for Ofcom’s 2008 Review of Public Service Television Broadcasting (PSB) 1. In carrying out the Review, Ofcom must report on the extent to which the public service broadcasters (PSBs) have fulfilled the purposes of public service television broadcasting, and to make recommendations with a view to maintaining and strengthening the quality of PSB in the future. To provide a full and open review and to ensure the full range of delivery models and examples of good practice are not overlooked, Ofcom has sought examples of public service provision in sectors other than the traditional broadcasting market. For this Paper, Ofcom has commissioned Tom Fleming Creative Consultancy 2 to provide an introduction to the strategic context of and delivery models for public service delivery in the cultural sector 3. This is intended to provide a wider perspective on how a different though related set of institutions and organisations are setting out their commitment to public service delivery – often expressed as public value . In Phase 1 of the 2008 Review of PSB, Ofcom found that the existing model for delivering PSB is unlikely to be flexible enough to be able to take advantage of the opportunities and meet the challenges facing public service broadcasting in the digital age. A new model would need to be flexible, use a wide range of platforms and potentially a broader set of providers than the existing model. Ofcom sets out several tests of effectiveness: - Are providers incentivised to deliver public service content that achieves reach and impact? - Does competition between providers deliver the benefits of plurality? - Is the model sufficiently flexible to respond to audience and market changes? - Do providers have clear remits, independence, transparent accountability arrangements and incentives aligned to public purposes? - Does the model complement, not discourage, market provision? - Does it embrace the platforms, content forms and services that most effectively meet audience needs? - Are providers’ funding models sustainable? This Paper uses a similar set of questions as a platform to explore the public service dynamic of the cultural sector. It seeks to provide an overview of the strategic debate at play across the cultural sector, to convey the policy outcomes of this, and to illustrate emergent delivery models. This is to provide parallels with the broadcasting sector, but also to expose
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