House of Commons Culture, Media and Sport Committee

Funding of the arts and heritage

Third Report of Session 2010–11

Volume II Oral and written evidence

Additional written evidence is contained in Volume III, available on the Committee website at www.parliament.uk/cmscom

Ordered by the House of Commons to be printed 22 March 2011

HC 464-II Published on 30 March 2011 by authority of the House of Commons London: The Stationery Office Limited £20.50

The Culture, Media and Sport Committee

The Culture, Media and Sport Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Culture, Media and Sport and its associated public bodies.

Current membership Mr John Whittingdale MP (Conservative, Maldon) (Chair) Ms Louise Bagshawe MP (Conservative, Corby) David Cairns MP (Labour, Inverclyde) Dr Thérèse Coffey MP (Conservative, Suffolk Coastal) Damian Collins MP (Conservative, Folkestone and Hythe) Philip Davies MP (Conservative, Shipley) Paul Farrelly MP (Labour, Newcastle-under-Lyme) Alan Keen MP (Labour, Feltham and Heston) Mr Adrian Sanders MP (Liberal Democrat, Torbay) Jim Sheridan MP (Labour, Paisley and Renfrewshire North) Mr Tom Watson MP (Labour, West Bromwich East)

Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk.

Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/parliament.uk/cmscom. A list of Reports of the Committee in the present Parliament is at the back of this volume.

The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume.

Additional written evidence may be published on the internet only.

Committee staff The current staff of the Committee are Emily Commander (Clerk), Andrew Griffiths (Second Clerk), Elizabeth Bradshaw (Inquiry Manager), Ian Hook (Senior Committee Assistant), Keely Bishop/Alison Pratt (Committee Assistants), Steven Price, (Committee Support Assistant) and Laura Humble (Media Officer).

Contacts All correspondence should be addressed to the Clerk of the Culture, Media and Sport Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6188; the Committee’s email address is [email protected]

Witnesses

Tuesday 12 October 2010 Page

Mr Alan Davey, Chief Executive, Arts Council England, Mr Colin Tweedy, Ev 1 Chief Executive, Arts and Business, and Ms Louise de Winter, Director, National Campaign for the Arts

Mr Gary Millar, Councillor, Liberal Democrats, Liverpool City Council, Mr Ev 16 Simon Eden, Chief Executive, Winchester City Council, and Mr Guy Nicholson, Councillor, Labour, Hackney Borough Council

Tuesday 19 October 2010

Mr Tim Bevan, Chairman, UK Film Council, Ms Amanda Nevill, Director, Ev 24 British Film Institute (BFI), and Mr David Elstein, Member of the British Screen Advisory Council (BSAC)

Dr Simon Thurley, Chief Executive, English Heritage, and Dame Fiona Ev 36 Reynolds, Director-General, National Trust

Tuesday 26 October 2010

Ms Mhora Samuel, Director, The Theatres Trust, Mr Mark Pemberton, Ev 43 Director, Association of British Orchestras, and Mr Danny Moar, Director, Theatre Royal, Bath

Mr Roy Clare, Chief Executive, Museums, Libraries and Archives Council, and Ev 53 Dr Michael Dixon, Chair, National Museum Directors’ Conference

Tuesday 2 November 2010

Mr Edward Harley, President, Historic Houses Association, Ms Carole Souter, Ev 62 Chief Executive, Heritage Lottery Fund, and Loyd Grossman OBE, Chair, Heritage Alliance

Mr David Lee, Editor, The Jackdaw, Dr Tiffany Jenkins, Arts and Society Ev 72 Director, Institute of Ideas, and Mr Norman Lebrecht, writer and commentator

Wednesday 1 December 2010

Ed Vaizey MP, Minister for Culture, Communication and Creative Industries, Ev 81 Department for Culture, Media and Sport

Dame Vivien Duffield DBE, Chair, Clore Duffield Foundation, and Rosalind Ev 92 Riley, Trustee, The Brook Trust

Tuesday 7 December 2010

Barbara Hayes, Deputy Chief Executive, and Richard Combes, Head of Ev 102 Rights and Licensing, Authors’ Licensing and Collecting Society, Jim Parker, Registrar, Public Lending Right, and Stella Duffy, author

Tuesday 25 January 2011

Dame Liz Forgan, Chair, and Alan Davey, Chief Executive, Arts Council Ev 110 England

List of printed written evidence

1 National Campaign for the Arts (NCA) Ev 127 2 National Trust Ev 132 3 Liverpool City Council and members of Liverpool Arts Regeneration Consortium (LARC) Ev 135 4 English Heritage Ev 140; Ev 213 5 Arts & Business Ev 145 6 The Heritage Alliance Ev 149 7 Arts Council England Ev 154; Ev 199; Ev 206; Ev 210; Ev 213 8 Museums, Libraries and Archives Council (MLA) Ev 158 9 Association of British Orchestras (ABO) Ev 162 10 The Theatres Trust Ev 166 11 National Heritage Memorial Fund (NHMF) and the Heritage Lottery Fund (HLF) Ev 170 12 Historic Houses Association (HHA) Ev 174; Ev 204 13 National Museum Directors’ Conference Ev 178 14 Department for Culture, Media and Sport Ev 181 15 British Film Institute (BFI) Ev 184 16 Renaissance South East Ev 189 17 Local Government Association Ev 190 18 Liverpool City Council Ev 194 19 David Lee, The Jackdaw Ev 202

List of additional written evidence

(published in Volume III on the Committee’s website www.parliament.uk/cmscom)

1 New Writing North Ev w1 2 Derbyshire County Council Ev w3 3 Association of Festival Organiser Ev w4 4 Tyne & Wear Archives & Museums Ev w5 5 Peter Collins Ev w8 6 West Yorkshire Playhouse Ev w8 7 APRS Ev w11 8 Foundation for Community Dance Ev w14 9 Turner Contemporary Ev w15 10 Horse + Bamboo Theatre Ev w17 11 Mind the Gap Ev w21 12 Carousel Ev w24 13 Campaign to Protect Rural England (CPRE) Ev w26 14 Contemporary Glass Society Ev w28 15 National Maritime Museum Cornwall (NMMC) Ev w29 16 South East Dance (SED) Ev w33 17 Robin Jacob Ev w36 18 sporta Ev w37 19 North East England Renaissance Board Ev w38 20 Northamptonshire Museums Forum Ev w40 21 University Museums Group Ev w42 22 Royal Shakespeare Company Ev w43 23 Midlands Federation of Museums and Art Galleries Ev w47 24 PRS for Music Foundation Ev w50 25 OYAP Trust Ev w53 26 Birmingham Museums and Art Gallery Ev w54 27 Sue Grace, Sarah Bridges, Jane Seddon, Carrie Carruthers, Louise Tyrell and Grace Kempster, Northamptonshire County Council Ev w58 28 Andrew Welch Ev w60 29 Dance UK Ev w64 30 Christopher Gordon and Peter Stark Ev w65 31 Greater London Authority (GLA) Ev w88 32 &Co Ev w90 33 Heritage Tourism Executive for the North West Ev w92 34 Camelot UK Lotteries Limited Ev w94 35 Dr Alana Jelinek Ev w97 36 Sherborne House Trust Ev w100 37 Cornerhouse Ev w101 38 Association of Local Government Archaeological Officers for England (ALGAO: England) Ev w104 39 Artists Interaction and Representation (AIR) Ev w106

40 Southwark Arts Forum Ev w108 41 Missions, Models, Money (MMM) Ev w110 42 engage Ev w113 43 Newcastle City Council Ev w116 44 Film London Ev w118 45 Faceless Company Ltd Ev w119 46 London Arts in Health Forum (LAHF) Ev w121 47 British Federation of Film Societies (BFFS) Ev w122 48 Oxford University Museums Ev w125 49 English Touring Opera (ETO) Ev w127 50 Institute for Creative Enterprise (ICE), Coventry University Ev w129 51 Wiltshire Music Centre Trust Ltd Ev w132 52 Partnership for Urban South Hampshire Quality Place Delivery Panel Ev w135 53 Museum of South Somerset Ev w140 54 Luton Culture Ev w142 55 Craftspace Ev w144 56 Exeter City Council Ev w146 57 Royal Albert Memorial Museum & Art Gallery (RAMM) Ev w148 58 Prescap Ev w150 59 Edward Schlesinger Ev w153 60 Farnham Theatre Association Ltd Ev w154 61 The Greenwich Foundation for the Old Royal Naval College Ev w156 62 London Borough of Southwark Ev w157 63 Strange Cargo Ev w160 64 Trestle Ev w163 65 Association of British Jazz Museums Ev w165 66 Merseyside Dance Initiative (MDI) Ev w170 67 Hardish Virk Ev w172 68 Nautical Archaeology Society (NAS) Ev w173 69 Accentuate Ev w176 70 Hallé Concerts Society Ev w178 71 Orchestras Live Ev w182 72 Wayne McGregor, Random Dance, Akram Khan Company, Jasmin Vardimon Company, DV8 Physical Theatre, and Hofesh Schecter Company Ev w185 73 Northern Ballet Ev w188 74 Cultural Learning Alliance (CLA) Ev w190 75 Royal Court Theatre Ev w193 76 British Library Ev w195 77 Crafts Council Ev w199 78 City of London Corporation Ev w202 79 Ivan Cutting Ev w204 80 Jazz Services Ltd Ev w205 81 Peterborough Attractions Group Ev w209 82 Creativity, Culture and Education (CCE) Ev w211 83 UK Music Ev w215

84 Department of Culture at Manchester City Council Ev w217 85 Fiona Macalister Ev w220 86 Opera and Music Theatre Forum Ev w221 87 East Midlands Museum Service Ev w225 88 Dr Kevin Fewster Ev w227 89 Royal Institution of Cornwall Ev w228 90 Jonathan Platt Ev w232 91 Chard and District Museum Ev w234 92 Musicians’ Union Ev w235 93 Dance Consortium Ev w236 94 The Place Ev w238 95 Artsadmin Ev w240 96 Incorporated Society of Musicians (ISM) Ev w242 97 Maritime Greenwich World Heritage Site Ev w246 98 National Historic Ships Ev w248 99 Amber Film & Photography Collective Ev w251 100 Modern Art Oxford Ev w253 101 Oxfordshire Theatre Company Ev w255 102 Association of Independent Museums (AIM) Ev w256 103 Equity Ev w259 104 London Borough of Richmond upon Thames Arts Service Ev w263 105 Society of Antiquaries of London Ev w266 106 Freedom Studios Ev w267 107 Fitzwilliam Museum, University of Cambridge Ev w269 108 Salisbury Playhouse Ev w271 109 Oxford Playhouse Ev w274 110 First Light Ev w277 111 Portable Antiquities Scheme (PAS) Ev w279 112 Apples & Snakes Ev w281 113 Museums Association Ev w282 114 Reading Agency Ev w287 115 UK Overseas Territories Conservation Forum Ev w290 116 Voluntary Arts England Ev w291 117 Martin Thomas Ev w295 118 North Kesteven District Council Ev w297 119 New Deal of the Mind (NDotM) Ev w299 120 StopGAP Ev w301 121 Aldeburgh Music Ev w305 122 London Councils and the Chief Leisure and Cultural Officers Association of London (CLOA London) Ev w308 123 Young Vic Theatre Company Ev w311 124 Country Land and Business Association Ev w312 125 Netribution Ltd Ev w316 126 Robert Groves Ev w318 127 Murray Weston Ev w321

128 Axis Ev w324 129 Paul Clark Ev w326 130 Iain More Associates Ltd Ev w329 131 VAGA, the Visual Arts and Galleries Association Ev w332 132 Rosalind Riley Ev w337 133 Screen England Ev w338 134 Michael Ohajuru Ev w340 135 Regional Cities East (RCE) Ev w343 136 Northern Rock Foundation Ev w346 137 TYA-UK Centre for ASSITEJ, the International Association of Theatre For Children and Young People Ev w347 138 Renaissance East of England Ev w349 139 Big Lottery Fund Ev w352 140 National Music Council Ev w355 141 ZENDEH Ev w359 142 Renaissance South West Ev w360 143 Dance Digital Ev w363 144 Institute of Archaeologists (IfA) Ev w366 145 Renaissance East Midlands Ev w366 146 Blake Museum Ev w369 147 Liverpool Biennial of Contemporary Art Ltd Ev w371 148 Lifelong Learning UK (LLUK) Ev w374 149 sinfonia ViVA Ev w377 150 Cause4 Ev w379 151 The Sage Gateshead Ev w383 152 CapeUK Ev w385 153 Natalie Watson Ev w388 154 Design and Artists Copyright Society (DACS) Ev w390 155 Film and Video Umbrella Ltd (FVU) Ev w394 156 Culture Service, Royal Borough of Kensington and Chelsea Ev w395 157 Northwest Regional Development Agency Ev w397 158 Joint Nautical Archaeology Policy Committee Ev w400 159 Leicester City Council Cultural Services Division and also as Lead Partner For Renaissance East Midlands Ev w404 160 South West Screen Ev w406 161 National Association for Literature Development Ev w408 162 Paul Kelly Ev w411 163 Renaissance in the Regions (South West) Ev w414 164 Sue Cheriton Ev w417 165 Hoipolloi Theatre Ev w418 166 Dorset County Council with contributions from Dorset Strategic Partnership Culture Theme Group Ev w420 167 Society for Nautical Research Ev w425 168 Almeida Theatre Company Ltd Ev w429 169 RESCUE: the British Archaeological Trust Ev w430

170 English National Opera Ev w432 171 Historic Towns Forum Ev w435 172 Association of English Cathedrals (AEC) Ev w438 173 Newcastle Gateshead Cultural Venues Ev w439 174 Paul Graham Ev w443 175 Stephen Boyce Ev w444 176 Archives & Records Association Ev w448 177 Havering Council, Culture and Leisure Services Ev w451 178 Society of London Theatre and Theatrical Management Association Ev w454 179 a-n The Artists Information Company Ev w456 180 Art Fund Ev w459 181 National Museum of Science & Industry (NMSI) Ev w462 182 Royal Opera House Ev w463 183 Making Music Ev w466 184 High Peak Community Arts Ev w470 185 Federation of Museums and Art Galleries of Wales Ev w473 186 Surrey County Council Ev w476 187 William Poel Ev w477 188 Renaissance Yorkshire Museums Hub Ev w477 189 Take Art and the National Rural Touring Forum (NRTF) Ev w481 190 Board of the South Western Federation of Museums & Art Galleries (SWFMAG) Ev w484 191 BECTU Ev w488 192 National Association of Local Government Arts Officers (NALGAO) Ev w492 193 Arts Development Officer for Gloucestershire County Council Ev w496 194 Chief Cultural and Leisure Officers Association (CLOA) Ev w498 195 Southbank Centre Ev w501 196 National Theatre Ev w503 197 Nottingham City Council Ev w506 198 Joint Museums Committee, University of Cambridge Ev w507 199 artsNK Ev w508 200 Crewkerne& District Museum & Heritage Centre Ev w510 201 Dr Simon Jenner Ev w511 202 Independent Cinema Office Ev w514 203 Musical Theatre Matters UK Ev w516 204 Creative Scotland Ev w519 205 Royal Society for the Protection of Birds (RSPB) Ev w520 206 Association for Industrial Archaeology (AIA) Ev w522 207 MITA – Moving Image Training Alliance Ev w524 208 Richard Griffith Ev w525 209 Marc Sidwell Ev w526 210 Authors’ Licensing and Collecting Society (ALCS) Ev w528 211 Peter Stark and Christopher Gordon Ev w529 212 New Vic Theatre Company, Newcastle under Lyme Ev w540

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Culture, Media and Sport Committee: Evidence Ev 1

Oral evidence

Taken before the Culture, Media and Sport Committee on Tuesday, 12 October 2010

Members present: Mr John Whittingdale (Chair)

Ms Louise Bagshawe Paul Farrelly David Cairns Alan Keen Dr Thérèse Coffey Mr Adrian Sanders Damian Collins Jim Sheridan Philip Davies Mr Tom Watson ______

Examination of Witnesses

Witnesses: Mr Alan Davey, Chief Executive, Arts Council England, Mr Colin Tweedy, Chief Executive, Arts & Business, and Ms Louise de Winter, Director, National Campaign for the Arts, gave evidence.

Q1 Chair: I apologise to the people who have not kind of estimate on our part. I think people are being managed to find seats. This is clearly a subject of realistic. What I’ve found with talking to arts considerable interest. This is the first session of the organisations, talking to serious people, is people are Committee’s inquiry into funding of the arts and talking about how they can do back office more heritage. May I welcome as our first set of witnesses efficiently, how they can join together to do their this morning Alan Davey, the Chief Executive of Arts ticketing or production better. So I think people aren’t Council England, Colin Tweedy, the Chief Executive sticking their heads in the sand; they are prepared for of Arts and Business, and Louise de Winter of the something. But our submission to the DCMS was National Campaign for the Arts? I invite Louise saying, “We understand you are going to cut us, but Bagshawe to start. don’t kill us and don’t let’s lose everything. Don’t let’s do it carelessly and don’t let’s lose the golden age that Q2 Ms Bagshawe: Thank you all very much for we have”. coming. Funding for the arts from DCMS increased This year I think is a particular golden year, if you by £250 million between 1997 and 2007. Surely it like. It’s the year when the funding is probably the should be no surprise to you that it now has to be cut highest it’s been, just about, and it’s where the arts back. Shouldn’t arts funding bodies have been well organisations themselves are performing very highly. prepared for the scale and the necessity of these cuts? If you look up and down the country there are regional Mr Davey: Would you like me to open with that one? theatres, for example, that are doing amazing stuff. Ms Bagshawe: Yes, I would be very happy, thank There’s a whole lot of new writing going on; you. interesting productions that people are going to see. Mr Davey: It is true to say that grant-in-aid funding So there’s a real interest in the public there. Our has gone up by the amount you say since 1997 and orchestras are all over the country. For about £16 indeed, if you go back to 1994, we also have the million we fund eight symphony orchestras in the lottery money having come in. With that money, with country, including the regional ones, who have some that investment, I think we’ve built an arts amazing international conductors. The cost of the infrastructure in this country that we can be proud of Berlin Philharmonic is €24 million. So for less than and that we’re using well—we’re sweating the public the cost of one German orchestra we get a whole money that goes into it because public money attracts orchestral ecology, which is acknowledged to be one other money. I think it would be wrong to view arts of the best in the world. Our symphony orchestras funding as a bog-standard public service because most will typically get around a fifth of their income as arts organisations are charities that have complex investment from us and they’re known to be flexible, funding mechanisms and our money typically goes of high quality, attracting audiences of upwards of towards other moneys and attracts other moneys. So I 80% capacity, and bringing the public along who have think the money has worked hard in that period and I an interest in classical music. think we have an arts sector—arts ecology, if you So I think we’re in a healthy position. We’re not like—in this country that we can be proud of. denying that cuts are going to happen, and I think the I think it would be wrong to characterise the arts sector is preparing itself responsibly for whatever cuts world as being in denial about cuts happening. We’ve come next week. Our job as the Arts Council, when been very clear with them as to the overall fiscal state we get the number we get—and it is all speculation at of the economy and the likelihood of public sector the moment as to what that number will be—is to roll cuts coming over the next period. We’ve asked up our sleeves and manage the cuts in the best way organisations to model 10% cuts for next year. We possible to preserve this, if you like, golden based that on the Treasury’s overall figures that came infrastructure that we have, working with other out which suggested a kind of front-loading of cuts partners such as local government who you are which DCMS might be expected to take; so that is a speaking to later on this morning. Another cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 2 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter encouraging sign is that our key local authority perhaps aren’t making as much use of the possibilities, partners are coming to us and saying, “We must talk possible sources of private giving, as they might. as to how, over the next 10 years, we maintain the However, having said that, and it’s something that really good bits of the infrastructure that we’ve Colin Tweedy has said often, potential donors are worked hard together to establish”. interested in investing in success. So what the public So there are going to be constructive conversations, funding does, whether it’s from Arts Council or local not despairing conversations. That is not being government or both, it provides a kite mark of quality Pollyanna-ish on my part because the cuts we’re which attracts investors or potential investors and, if modelling are 25% to 30% and more and they’re you like, reassures them that there’s something solid significant, but we have to manage them and we will. there to put their money into. I’ve met lots of I could, if you’d like, at some point in the hearing tell philanthropists or would-be philanthropists over the you how we’re going to change our funding systems past couple of years and they all say, “We will not be in order to manage it across the four years. a substitute for public funding”. Ms Bagshawe: I think we are coming on to that a What we’re talking about is altering the percentages bit later. and the balance, not a wholesale re-engineering where Ms de Winter: I would like to echo what Alan has the public bit comes out, because I think the mixed said. I think it’s important to recognise and remember economy and the balance between the different bits in that a lot of that initial investment that has gone in the mixed economy in this country, works extremely over the last 15 to 20-odd years has gone into helping well. If you look at other countries’ arts councils, the to strengthen and shore up an awful lot of what we percentages are different and perhaps less effective. now take for granted, I believe. Alan is absolutely So I think we have quite a good level at the moment. right in so far as we do have now very well-known, What I’d be looking for is to tweak and to find the well-regarded and worldwide organisations that don’t money that Arts and Business last week said was come from nothing. A lot of time and effort has gone possible to raise in various ways so that the system into creating those businesses and infrastructures. So, works harder and the public money that’s put in, absolutely, the arts understands it has to be part of the which will be less, works harder even than it does overarching public mix and we do understand that we now. can’t be shielded off or protected from cuts. But the Jim Sheridan: Thanks. issue is the depth and the rapidity of those cuts and to Mr Tweedy: As Alan Davey is indicating, we make sure that when they do come that, as far as launched a report on philanthropy last week where, possible, they’re cutting into maybe a bit of fat, though, as Alan says, we certainly do subscribe to the probably a bit of muscle, but at least not into the bone. statement “supplement not substitute”. But it’s important that there is a potential of at least £100 Q3 Jim Sheridan: You said now you consider public million coming into the arts from philanthropy with funding attracts other funding. Could you maybe targeted interventions by 2016. One of the challenges expand what you mean? What is other funding and is that, of course, taking philanthropy rather than how does that impact on your budgets? corporate sponsorship, 82% of individual giving at the Mr Davey: If you look at the case of the National moment goes to London and 50% of all corporate Theatre, for example, which I think about 10 years sponsorship goes to London, and only 32% of arts ago would have received about 60% of its money organisations have friend schemes and only 8% of arts from us, now that’s around 38%. So they get other organisations have legacy programmes. money from sponsorship, from philanthropic giving, Arts and Business is committed to basically making from commercial tie-ins, and from the box office. sure that 75% of arts organisations have legacy And, moving forwards, that’s the kind of model we schemes in the next four years and we are working see we can achieve across the sector, but to do that with the Community Foundation Network to create, we recognise that we need to up the sector’s ability to we hope, what we’re calling the Big Arts Fund, which raise money from other sources and we can’t take that is a fund to encourage local philanthropists to support for granted, particularly outside London. London is a local community arts because I think this is particular market for philanthropic giving and, indeed, fundamental; not to neglect London but to create a for sponsorship, and national bodies have a particular new group of philanthropists out there. This new fund, pull and cachet for those who might offer sponsorship. which we’re working with the Community Foundation What we in the Arts Council are particularly Network on, and they are very excited to work with concerned about and will be looking at over the next us, is about local people endowing local foundations four years and beyond is strengthening the capability for local arts so it’s not just the fat cats in any way. of organisations in the regions to access the possible But this is the private sector talking. We talk, as you philanthropic wealth that’s there in the regions and to know, with philanthropists and the corporate sector be more skilled in fundraising and to offer them that and that’s who we speak for, and we are absolutely support to do that, working with partners. So there’s committed to making sure that the arts community a mixed economy at the moment. At the moment, the have the right training, the right motivation, the right gold standard is a third, a third, a third; a third from boards, the right government structures to be able to Arts Council, a third from other sources and a third help themselves; because I think we are going to see from box office. If you look at the sector on average, a totally transformed network of arts funding that’s sort of being achieved but there are lots and lots mechanisms, and the public sector and the private of variations within that. And so lots of organisations sector need to work more closely together. cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 3

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter

Q4 Philip Davies: Alan, I think we are all doing this spending on diversity officers and the answer came inquiry because we want to try to protect the funding back, astonishingly, to me, that you employed 20 at a for the arts at the front line and, in that spirit, how cost of £671,000 a year, you don’t think that’s a sign much of your budget that you have doesn’t get passed of an organisation that’s excessively politically on to the front line and gets retained for your own correct? Do you think that’s money well spent that use, so to speak? shouldn’t go to the front line? Mr Davey: Our operating costs in terms of grant in aid Mr Davey: I have to say that was before our are £22.6 million. That represents 5%. If you include organisational review, and I will gladly update you on lottery, our total operating costs are 6.6%. If you take what the current situation is, but I know it’s a lot the Treasury and the Charity Commission’s definition smaller than that. It might well be that they weren’t of what in that operating cost is administrative cost— full-time diversity officers but had “diversity officer” that’s the administrative overhead—that’s about 3%. in their title—that is, some responsibility for it—but I So, the amount we’re talking about in terms of what can get back to you with that. from grant in aid goes towards administration is £22.6 million. Q11 Philip Davies: It’s £671,000, whether they were full-time or part-time. Surely that money should be Q5 Philip Davies: Do you not think that is too high? going to the frontline, not on politically correct Mr Davey: Well, we’ve reduced it considerably by diversity officers? £6.9 million this year alone. We have undertaken a Mr Davey: And so that money is indeed now going thorough organisational review. I’ve reduced my to the front-line. board by about half. We’ve reduced the numbers in head office and, indeed, our regional network to a Q12 Philip Davies: But there’s a question here on similar extent. So we’ve reduced staff by 21% the application form, “Is the activity you are planning overall—by a fifth. directed at or particularly relevant to any of the following groups of people: disabled or deaf people, Q6 Philip Davies: Why were you wasting so much people at risk of social exclusion, Asian or Asian money before, then? British, Black or Black British, Chinese, any other Mr Davey: We weren’t wasting money before. I ethnic group?” If I tick any of those boxes, what are looked at how we were organised. We looked at how my enhanced chances of getting funding from the we were organised and realised we could do it better. Arts Council? If I can characterise it, it was a kind of development. Mr Davey: None. The Arts Council originally was a head office only with separate organisations working in the regions. It Q13 Philip Davies: So why do you ask it, then? absorbed those separate regional organisations in 2002 Mr Davey: That’s monitoring information that we are and, to be frank, I think there was unfinished business required to collect under the law because we’re that we had to get on and do and that’s what we did required to report back. when I came in. So we’ve consolidated into a truly national body that isn’t duplicating activity. And, of Q14 Philip Davies: So it makes no difference at all? course, we’re going to go further in the next four years Mr Davey: No. and my job is to make sure that as much money as possible is going towards the front line and producing Q15 Philip Davies: So if you found that— art. I’m very clear about that. Mr Davey: We make decisions on the merit of the projects. Q7 Philip Davies: Would you say that you were a politically correct organisation? Q16 Philip Davies: So if you found that nobody had Mr Davey: I have heard that observation made. ticked that box and then one person finally came in who ticked one of those boxes, they would not get Q8 Philip Davies: You probably heard it from me, favourable treatment? but do you think you are? Do you think you’re Mr Davey: That’s monitoring information rather than politically correct? application information, if you like. Mr Davey: To be honest, not excessively so. I’ve worked in public sector organisations in the past and Q17 Mr Watson: Alan, these are to you. The have found more political correctness elsewhere. Secretary of State said that he was targeting spending cuts intelligently in order to protect front-line services. Q9 Philip Davies: Everything is relative? Is this happening in reality? Mr Davey: Everything is indeed relative. You may Mr Davey: We’ll see next week. well be referring to a particular application form that existed a couple of years ago that asked about board Q18 Mr Watson: Okay. You spend £1.2 million a members’ sexuality, for example, and that doesn’t year on your head office. Is that a good use of exist anymore. Our aim in looking at our systems is resources? Could you move south of the river and to simplify, simplify, simplify, and to get rid of save money? questions and processes that aren’t necessary. Mr Davey: Head office is not just a building in London; it’s London and Manchester head offices. Q10 Philip Davies: So when my colleague Tom We’ve now dispersed it because what we did last year Watson asked you how much the Arts Council was and this year was move all our back office functions— cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 4 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter personnel, finance, IT and the grant giving—as well Could you tell me how much that figure is after the as our telephone inquiry service up to Manchester, and review of the pension fund in the end of March this that operates for the whole organisation. So head year? office actually serves the whole thing. Mr Davey: Well, we haven’t had the figures yet from the review of the pension fund at the end of March Q19 Mr Watson: The office in Great Peter Street this year. This is part of the employer’s contribution costs £1.2 million a year. Is that good value for that it was agreed several years ago we would make money? until 2017 in order to pay off the deficit, and that Mr Davey: Well, we’re there until 2015 and we will means that the employer’s contribution to the pension be looking at alternative properties to move into scheme at the moment is 25%. If you look at other beyond that, and we’ll be looking at where we are, NWBs who buy into the civil service pension scheme, yes. for example, that broadly compares with their contribution. We are due to be paying that on a Q20 Mr Watson: So, given you have a timeline of long-term temporary basis, that is, until 2017, but we 2015, was it wise to spend £116,232 on internal will see what happens when we get the results of the redecoration? evaluation, which are going to come in towards the Mr Davey: Well, we got good value out of that end of the year, and we’ll have to look at the thing because that allowed us to absorb the London office properly. and to save rent on a separate London building, and it’s allowed us to squash people up and make better Q25 Mr Watson: But you will be able to tell me use of the space. how much lottery funding is being used to top up the pension fund? Q21 Mr Watson: Good value includes paying Mr Davey: How much? £13,500 to colour consultant Lothar Götz to advise Mr Watson: Lottery funding, your grant-in-aid you on the grey-scale colour on the walls? funding? Mr Davey: I would say he was more than a colour Mr Davey: I can’t give you the absolute figure off the consultant. He was an artist whom we asked in to top of my head. curate the building, as it were. Being an Arts Council, Mr Watson: But you could follow that up? I think that’s what you’d probably expect us to do, to Mr Davey: But it’s 25% of the pay bill. have some kind of artistic sensibility, if you like, to the building we’re working in. Q26 Mr Watson: Yes. If you could follow that up in writing that would be great, thanks. You spent £10,000 Q22 Mr Watson: So when he says, “The existing nearly at every party conference in 2008 on drinks building, like a mountain, mountain gets cut into receptions. Did you do that this year? different layers of grey. Experience of climbing up a Mr Davey: We haven’t been for two years to party mountain where you experience different atmospheres conferences. according to the highway you are on, horizontal layers Mr Watson: Very good. of grey, layers of grey like different grey tones of Mr Davey: So my September is now strangely free. clouds and mist”, that— Mr Davey: It probably describes my working day. Q27 Mr Watson: So between July 2007 and October 2008 when you spent £70,171 on drinks receptions Q23 Mr Watson: Mine, too. You have 39 staff with and dinners, have they all stopped as well? the word “communication” in their job titles. What do Mr Davey: Could you remind me of the dates, please? they all do? Mr Watson: July 2007 to October 2008, £70,171 on Mr Davey: A variety of things. They’re not all press drinks receptions and networking dinners. officers. We have a very small press office. And again, Mr Davey: We haven’t had a drinks reception for I think I’m right in saying that’s the pre-organisational quite a long time. The last one was probably the review figure. I’ll write back and confirm that. We Christmas before last and it was a very small affair in have a lot fewer officers with “communication” in the foyer, but again, I’ll write back to you to tell you. their title. What we found was that lots of people liked We do have dinners with opinion formers or people the word “communication” in their title because they who can offer us help or who we’re trying to get thought it sounded sexy and we found that they things out of, but I don’t think we party excessively. weren’t, by our definition, communications people at all. They were people who had contact with the Q28 Mr Watson: £20,000 on the Christmas 2008 outside world and contact with the bodies we fund but Christmas party; you have calmed that down as well, fancied themselves as headlining in communication. I have you? Slightly drier Christmas— have my Communications Director behind me and Mr Davey: Yes. You see, I arrived and the parties she’s staring at me badly. So when we did the stopped, sadly. organisational review we had a good look at that and only people who really did communications in any Q29 Mr Watson: Me, too. In terms of your art meaningful way are allowed to call themselves that. collection, you have 7,500 items in the Arts Council arts collection. Why is the Arts Council itself holding Q24 Mr Watson: In a recent parliamentary answer its own collection? to me, you admitted that grant-in-aid funding was Mr Davey: Well, we don’t physically keep it. It’s being used to pay off the deficit on the pension fund. looked after on behalf of the nation by the Southbank cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 5

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter

Centre at the Hayward Gallery, and their job is to get Q36 Mr Watson: What is the most significant piece the stuff out particularly to regional galleries, but also of learning you have absorbed over the process of to use it as a resource for curators, particularly in the investing in the public art gallery in West Bromwich? regions, to be able to come and curate from the Mr Davey: I wasn’t there for most of it happening but collection. So, it’s a kind of national resource. I would I’ve looked at the history of it, and I think it’s our like to use it more, to be honest. I was surprised, when ability to be firm and to say no when people who are I arrived, at the potential for using it more, and I’d committed, passionate and enthusiastic are urging us like to get on and do that because it is a tremendous to stay with it despite our concerns not being resource. answered. So we had some concerns about a loss of focus as the project got bigger and bigger and we Q30 Mr Watson: Why should the Arts Council hold should have been firm, I think, earlier. its own collection? Shouldn’t you give it to a gallery Mr Watson: Earlier? that specialises in that kind of stuff? Mr Davey: Yes. It’s all very well for me to say that Mr Davey: Its whole purpose is to be loaned out and because I wasn’t there. it’s been built up over the years. It was formed from the Council for the Encouragement of Music and the Q37 Mr Watson: Twelve years into this project and Arts (CEMA) collection which was a touring £32 million of other people’s money spent, you said collection that was built up during the war and touring no and the interactive gallery did not open. Who is village halls, to allow ordinary people access to art, responsible for that? and people have donated to it over the years. There Mr Davey: Well, it wasn’t showing any signs of has been a tremendous number of donations. It has a opening so— very small amount of money to spend on buying new things, but it’s important that it encourages emerging Q38 Mr Watson: No, who is responsible for the £32 artists and helps establish them. I think it’s an million of investment that didn’t see the light of day important artistic resource in the infrastructure of the in a gallery? Is it you or somebody else in the Arts country. Council? Mr Davey: It’s the Arts Council. Q31 Mr Watson: Last time I had checked, though, you had 1,300 pieces on display and were spending a Q39 Mr Watson: Who was the lead officer on that third of a million pounds a year on storage. That’s responsible? 5,000 pieces just hanging around in storage. Mr Davey: There were a variety of lead officers over Mr Davey: Well, we’d like there to be more out at a period of years. any one time. That’s partly to do with the resource of getting it out and getting it in the kind of places where Q40 Mr Watson: Was anyone disciplined for the loss it can be properly looked after as well as seen. We of £32 million of other people’s money? spend that amount on storage because we have to store Mr Davey: No. it properly. It’s a valuable collection that we are holding on behalf of the nation. If you’re asking me— Q41 Mr Watson: How did you share those lessons with other people? Have you published a report of any Q32 Mr Watson: But the nation will not see it if is kind to show the learning so that this never happens in storage? again? Mr Davey: The nation sees quite a lot of it. If you go Mr Davey: No, we haven’t and that’s an interesting to the Walker Art Gallery at the moment, we were idea, I think. We’ve done an internal exercise and given a collection by Wolfgang Tillmans, the we’ve looked at the complexity of the risks and how contemporary artist, and it’s an amazing, wonderful they were managed, and points at which action should installation he’s put up there and there are many more have been taken that wasn’t. We’ve shared this with like that with the recent— the National Audit Office because we wanted their views and they’ve commented, in terms of lessons Q33 Mr Watson: On your staff reorganisation, learned, that we’ve got it right, but I certainly will which I believe is the sixth since 1993, you have gone consider publishing something. £2.5 million over the estimated costs of the reorganisation. Can you explain why that is? Q42 Mr Watson: Will you publish the reports that Mr Davey: That was the costs of redundancy because were produced by Moss Cooper during the internal more people of a certain age took redundancy than machinations on the public? I asked you whether you was expected. would publish them in a parliamentary question and was told that you could not publish them because of Q34 Mr Watson: So why did you let them all go? disproportionate cost. Mr Davey: If you have a voluntary redundancy Mr Davey: Can I return to you with that? scheme, it’s difficult to stop them. Mr Watson: You’re going to write to the Committee? Mr Davey: Yes. Q35 Mr Watson: No, it isn’t. If it’s voluntary, you can say no. Q43 Mr Watson: Are you able to calculate the full Mr Davey: Well, we had our processes and they chose costs of mothballing the project through the period of to leave. receivership to opening versus the additional funds cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 6 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter that were required to complete the work on the the answers that you’ve just given about the wasteful building? spending at the Arts Council? Mr Davey: I’m not able to answer that at the moment. Mr Davey: Well, it was always a very large—it was Mr Watson: Would you be able to follow up with always a very significant project. that? Mr Davey: Yes. Q50 Philip Davies: Not just that project. I’m talking about the whole series of questions he asked. There Q44 Mr Watson: On the completion stage some were dozens of them. people have said that it cost an additional £10 million Mr Davey: Well, as I’ve said, looking back with as a result of going into receivership. Is that a figure hindsight, I can see there were many unfortunate that you might agree with? things that happened in that project. Mr Davey: I’d have to get back to you on that. Chair: I’m going to move on. Adrian Sanders.

Q45 Mr Watson: Okay. Can I ask, given that this Q51 Mr Sanders: Can I go back to the collections was one of the most significant capital projects in the that you hold? What are the barriers to getting those West Midlands region, why neither the Chief out of London and into provincial towns, into smaller Executive of the Arts Council West Midlands nor any urban areas and even down to village halls where other senior officer attended any board meeting of the some of them came from? public during the build process, given that it was such Mr Davey: It’s resource at the receiving end, and an important project? resource in the collection itself, and it has a very small Mr Davey: I’ll come back to you with that answer. staff. People have to want to come and avail Chair: Tom, I think if you submit a whole series of themselves of it. We run courses for curators, for these questions we will— example, and they’re fully subscribed. If we employed more staff then we might be able to do more with it. Q46 Mr Watson: Okay. Last question. Would you like to apologise to the people of West Bromwich and Q52 Mr Sanders: But take us through the barrier Sandwell for the misery that you’ve caused, on behalf because it’s difficult to understand what is the problem of the Arts Council? of getting— Mr Davey: Well, on behalf of the Arts Council, what Mr Davey: Well, people have to want to receive it and I would say is there is a facility there which is by a many regional museums and galleries are strapped for world-class architect. There’s very good management resources, and I think that’s the barrier at the moment. there that is finding its mission and finding its sense But, as I said, it is something I want to look at and of purpose, if you like. So what we have done is see if we can get more out of it. we’ve left the people of Sandwell with what, I think, has the potential for becoming a pretty good facility. Q53 Mr Sanders: What is the cost then to the Q47 Mr Watson: You have spent £32 million of receiving gallery? lottery funding on a gallery that didn’t open and Mr Davey: They would have to pay transportation you’ve not taken the opportunity— and, in some instances, might have to pay insurance. Mr Davey: We weren’t the only funders, remember. Chair: We’re going to have to move on because we Mr Watson:—to publish any learning or apologise to have a lot to get through. the people that have to carry the can for that, the Mr Tweedy: I was just going to say, Chairman, that it council tax payers of Sandwell. Just for the final time, may be, to help the Arts Council out on this, that some would you like to take the opportunity to apologise of the private sector might be very interested because to them? there’s a lot of corporate collections now also in Mr Davey: There is a facility there that is being used, storage—the Royal Bank of Scotland Collection and that attracted 110,000 visitors last year, that is being the NatWest Collection—which are wonderful managed by what I think is a good team. We’ve put collections. There’s over 600 works in the NatWest £32 million into the area. Sandwell Council felt that Collection, now owned by the Royal Bank—and also regeneration will follow that investment and they owned by the British people at the moment. themselves have invested money, as has European Therefore, I think there may be an opportunity for the money and indeed the RDA. corporate sector, both nationally and locally, to help out the Arts Council, and Arts and Business would be Q48 Mr Watson: So that’s a refusal? willing to have a conversation. So this may be a “good Mr Davey: I think there is a facility there that in some news” story. ways they have some pride in. Chair: Thank you. Thérèse Coffey.

Q49 Philip Davies: Are you not embarrassed at some Q54 Dr Coffey: Thank you, Chairman. I represent a of the answers you’ve just given to Tom in that series shire seat, not a London or city seat. But my concern of questions? There are arts organisations in my is that by directly sponsoring certain museums and constituency, in all of our constituencies, struggling galleries, what risk is there that DCMS is creating an to keep going. They’re worried about what the future elite set of London-based institutions or capital city- brings. There are going to struggle to keep delivering based institutions that will be largely immune from the things that they’re passionate about delivering. In spending cuts, leaving the shires to pick up the that context are you not embarrassed about some of crumbs? cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 7

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter

Ms de Winter: Can I come in on that? I think there is couple of questions about the current cuts that began very much an imbalance at the moment in terms of when the Secretary of State took a big chunk out of the big national institutions. Not all of them are in your budget earlier on this year. You’ve passed on cuts London—there are some outside of London— at a flat 0.5% to organisations, and I understand, for whereby obviously they do attract much more in terms the sake of simplicity and quickness, that’s a fairly of also the private investment element as well. In straightforward way of doing it, but it is quite crude terms of organisations outside London, what the in that it doesn’t take cognisance of whether or not it’s National Campaign for the Arts is very concerned a small organisation or a large organisation—larger about, and what our membership are very concerned organisations maybe could have taken a bigger cut— about, is let’s not forget that the cuts are not just and the impact of a 0.5% cut on a fairly small central Government cuts. There will be very organisation. I was wondering was it just speed and swingeing local authority cuts as well and, no matter simplicity that you did this or was there any greater how well Alan and the Arts Council manage to strategic thought given to it? mitigate some of the central cuts, the big fear is that Mr Davey: It was speed and simplicity but also a the organisations at the local level who get money thought that at that level, at 0.5%, then it could be from local authorities potentially could face up to coped with by all kinds of organisations. But we 100% cuts, depending on how local authorities decide needed to let people know what was happening fairly to use those budgets available to them. So what we quickly and put them out of their misery. fear is an even greater diminution of art generally, not Mr Tweedy: Could I just say one thing—I think, Alan, just museums and galleries but performing houses as there were two organisations which didn’t get to 0.5%; well, outside of London because some of those areas Arts and Business was cut 4% and two years before may well be lost. we were cut by 30%. So we’ve had a 34% cut in our public realm work in the last three years. Q55 Chair: Do you want to add anything to that, Alan? Q59 David Cairns: I don’t want to pre-empt the Mr Davey: The national museums and galleries are Chair. I think he wants to talk about this specific issue funded directly from the Department but one of the in a minute, so I think there’ll be follow-up there. Can things we’ve been trying to do through our Turning I ask Louise de Winter whether or not this 0.5% across Point visual arts strategy is to establish galleries the board—obviously nobody is happy about the cuts, outside London and a network of galleries outside but is this approach, this fairly crude “everybody gets London and, for example, galleries that can take the the same” approach, something that you welcome, or Arts Council collection and other things such as the would you rather have seen something a bit more d’Offay collection. I think it is clearly important to sophisticated in terms of an organisation’s ability to keep an eye on what’s going on outside London. And, absorb cuts? as I said, we will be talking to local government to Ms de Winter: In that instance and at that level, I make sure that we preserve the essential parts of the think the 0.5% cut was more or less understood and infrastructure going forward—so the next four years accepted by the sector, but that’s because it was 0.5%. and beyond—because what it’s important that we do I think if we’re looking at bigger cuts, and Alan is look at the cut that we get and manage it across that knows this, then there will need to be a degree of period, so that we keep the spread and the reach of finessing whereby certain organisations, larger provision across the country, including in non-urban organisations with broader shoulders that do perhaps areas. attract more private income, ought to potentially bear a bigger share of the load compared with those smaller Q56 Dr Coffey: Is there anything to be said for you organisations that find it very difficult to attract other simply giving away your art collection to regional sources of investment and income. So I think we rather than wasting money tying it up in storage or, if would like to see perhaps a bit more variation, but nobody wants it, why keep it because if you’re not it does depend on the numbers. What matters to arts showing it— organisations is clarity and understanding what their Mr Davey: Well, we’d be passing on the cost to financial position is going to be, and the sooner they others. know that often the better because then they can plan for that. Q57 Dr Coffey: Why don’t you just give the £500,000 to your regional areas? Q60 David Cairns: Can I ask then, you mentioned Mr Davey: We’d be passing on the cost to other earlier on about working on future funding people because they would need to make sure that the programmes to respond to what’s going to be stuff had the right kind of storage and all that. But announced next week. Can I ask in some detail about we’re talking, in terms of all the national collections, exactly how you’re proposing to go about this? Are about a better national collection strategy. As I said you looking to carry on the top-slicing “everybody earlier, it is my dearest wish that we use the Arts bears some of the pain”, or are you prepared to say, Council collection more and that people are able to “Right, we’re simply not going to fund this project. benefit from it more. We’re not going to fund that project. Too bad, sorry” Chair: David Cairns. and take a more strategic view of it? Everybody around this table has, either at a local authority or in Q58 David Cairns: Thank you, Chair. Before we go private business or in government, had to make budget on to talk about next week’s cuts, I want to ask a cuts and the easiest thing to do is just to top-slice cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 8 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter everybody by the same amount. But that, strategically, Q64 David Cairns: Finally, to Louise again, clearly very seldom makes any sense at all. So are you your job is to stand up for everybody and not to offer prepared to take some incredibly unpopular decisions up sacrificial lambs but, given what we have just to 100% cuts in order to protect what you regard as heard that it’s not going to be top-slicing, everybody strategically significant? absorbing it, some people are going to get massive Mr Davey: What we intend to do is just that, and to cuts, how can the sector start now reorganising itself, look across the whole four-year period. When we get working together, looking to cut out overheads, the announcement next week, if it’s readily looking to put an end of the territorial stuff, “Well, comprehensible, because sometimes the Treasury we’ve always existed for 100 years, we need our don’t always make settlements that way, we’ll be budget”? Is the real massive impact of what’s coming having a council meeting very quickly after that, and down the line really dawning on people? Are they what we’ve pledged to do is to give people the first behaving now in a way that these are going to be year’s settlement very quickly. But that will be the tough years and the fighting over your territory just current portfolio less a small percentage, and we don’t isn’t going to work any more? know what that number is because it depends on what Ms de Winter: The sector is already doing an awful the first year cut is. But that will be, again, across the lot of that. I think there is an impression that the sector board and we’ve talked to other management about has been sitting on its thumbs and it hasn’t. There are this, and they see that’s the best way of doing it many, many organisations that we represent who get because it gives them certainty about the next by on a shoestring and their way of working is to immediate year very,very quickly. work in collaboration with other organisations or in But the week following that we’ll ask people to apply partnership or to look where they can share services; so there is an awful lot of that going on at a very for years 2 to 4, and they’ll have between November micro-level but there is quite a lot of it going on at and January to do that. It will be a simple application macro-level as well. Some of the larger national process but we will aim to get people their years 2 to institutions, people like the Royal Opera House or 4 budget before the end of March next year so that people like Sage Gateshead, already do an awful lot they’ll have a year’s notice of whatever changes— of work with other smaller local ballet companies or some of them could be big changes—we’re going to music companies or they band together to buy have to make. What we want to do is to fund people services and share services, share HR services. So that to thrive. We don’t want to just take money off people is already happening in the sector. I think what this and then make them unworkable. We need to make will do is concentrate minds to see, “Is there a way strategic decisions as to which are the best that we can accelerate that or improve upon it or organisations to fund and which organisations we can increase it?” no longer afford, so they’re going to be really hard One of the potential barriers to that being the panacea, and, yes, we are going to be unpopular, but we have if you like, is where you have to look at the purpose to manage that well, I think. of an organisation, its governance arrangements and what it exists to do, because merger or collaboration Q61 David Cairns: So in year 1 it’s the status quo or partnership working can certainly work well for minus X%? some but not in every instance. You really do have to Mr Davey: Minus something, yes. look very carefully at what the savings can deliver and to be quite clear about what is the point of doing Q62 David Cairns: But from year 2 onwards it’s a this. Is the point of doing this to deliver significant completely new— returns and, if it does do that, how does that affect Mr Davey: Yes. And what we are going to offer how we present what we do and the art that we do people is a chance to have a very close relationship or how we organise? Unless those questions can be with us, and then we would expect responsibilities on answered in a positive way, then there probably isn’t much point in going down that route. their behalf. So, for example, we would expect the The other thing I would say is that arts organisations National Theatre to take on some responsibility for are mission-unique to a certain extent. They exist to the rest of the theatre ecology explicitly. But for some produce the art that they do. There is an awful lot of people it would be a much looser relationship and co-production that is going on. There is an awful lot we’ll be funding them for a period of time to do the of sending things off to different houses and stuff they do. organisations, but a lot of what they do is rooted in where they are in their community and their place and Q63 David Cairns: I don’t want to start it is not like organising a load of Marks & Spencers scaremongering at this stage, and in advance of detail or Tescos. It is a unique product; so there needs to be from next week it’s difficult to say this, but you are some attention and care placed to that into the sending out a signal now that it is perfectly possible functions of the organisation. that in a year or 18 months’ time, organisations that Mr Tweedy: Can I, Chairman, just add that the have received significant financial assistance from the National Campaign for the Arts and Arts and Business Arts Council will simply not be getting any more four months ago set up something called the Forum money. for Arts and Heritage where we invited our 1,650 arts Mr Davey: That’s possible. We’ve been having members between us to select 20 people who would meetings with all our funded organisations and set this sit on a forum to discuss the three issues about the out to them. public sector, the private sector and earned income cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 9

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter and we had over 1,000 people from the arts Arts Council funding. It is cuts at a local level that I community voting to serve on this group. It has been, think are the ones that are really going to bite. I think, Louise, marvellous. We will be, Chairman, presenting their report to this Committee and I think Q66 Ms Bagshawe: Saying museums are likely to you will find it very refreshing how the cultural close two days a week, is this not just dramatics for community—this is the arts community, the film, the sake of it, frankly? We’ve heard representations video, both public and private—are absolutely aware that the Arts Council, for example, has worked that there is a new world out there and Arts and incredibly hard and has cut its budget and so forth and Business, and all of us, I think, are about how do we then I listened to the succession of questions by my serve our sectors. I think the sector want next week colleague and I find ongoing examples of waste that I over, so that they can start living again and growing. think the general public, listening to this evidence Mr Davey: Could I just add one more thing briefly? session, will be shocked about. Is it not ludicrous to The application process I talked about will be suggest, especially in advance of the figures being encouraging people to talk about who they’ll be announced, that museums are going to be forced to working with and for people to indicate what they close two days a week—from the Director of the Tate? might be doing. That year where we’re kind of giving Mr Davey: We are not responsible for the national everyone flat funding, or a flat settlement as well, a museums but, let’s be clear, if the arts budget is cut flat cut, will enable us to have conversations and get by 25% that’s quite a large cut and, as I said in groupings together and encourage groupings where previous answers, that will mean that less people are they don’t currently exist. There’s a lot of appetite funded. What we’re going to try to do as an Arts outside there for that and that’s healthy because, as Council is make sure that we manage that cut in the Louise said, people aren’t just sitting on their thumbs. best way possible and we preserve the infrastructure of performing arts organisations around the country in Q65 Ms Bagshawe: Nicholas Serota is the Director so far as we can and do it in the best way possible. of the Tate. Last week he wrote an article for the What I am saying is that when we get the number we Guardian in which he described the forthcoming cuts will have to roll our sleeves up and manage it properly as “savage” and suggested that museums would be and that’s what we’re aiming to do. forced to close up to two days a week as a result of But it’s difficult to say what the overall effects will be the cuts. We have just heard in this session, due to because individual managers of particular institutions the incredibly well-researched and penetrating set of will need to look at their budgets, where it’s coming questions by my colleague Tom Watson, some frankly from, where the possibilities of other sources of quite breathtaking examples of waste, past and income are and decide what their business plan is present, in the Arts Council itself; and, may I say, an going forward. But what I’m determined to do, in how we disperse the money that we get, is to make sure extraordinary series of questions and answers. Is this that the arts organisations and artists up and down the not, by the Director of the Tate, merely country are able to do their work over the next four scaremongering? If we were to ask Tom to take a look years because what we have to do is not just think at the Tate and other museum sectors, would we not about the next four years but think about the next 10 be able to find significant findings and economies? It years; because arts and culture in this country are strikes me that saying, especially in advance of the going to remain important to civic life, to the kind of cuts being announced, that museums are going to be society we are and I think it is our duty, those who forced to close two days a week—this isn’t the sector are working the funding system, to manage it in the taking it on board, as Louise has suggested, being best way we can. We will strive to be as efficient as prepared for the new reality, this is, frankly, something possible. that I feel is designed to scare the public. What are As I said, we’ve made great strides in the last year in your thoughts on that? terms of cutting out inefficiency from the organisation Ms de Winter: Tate is another issue. You probably and we’ll be doing more and that’s very, very clear. need to ask Nicholas what he means by “blitzkrieg”. But if you look at the Arts Council in comparison to But certainly I think it depends on what the number other funding organisations, such as foundations, our is, as Alan says. But I think the effects would be really percentages of administration are quite low. In fact, I felt in the regions; not necessarily in London and, as think they are among the best in the world. I say, not necessarily among those big institutions. But Ms de Winter: Can I just add something? Just to say it is in the regions, I feel—cuts in local museums— as well, I am slightly caught on this thing about where there will be some very harsh and stark choices regional and what’s going to happen in the regions to be made about whether one spends what resources because I think that is where it would be most felt. It one has on looking after the collection, curating it and isn’t just about museums but it is about theatres and all that stuff that needs to happen and paying for the performing houses and receiving houses. If, for environmental atmosphere that things have to be kept example, theatres get cut outside of London, that in, or whether one tries to look to the remit of means a big national ballet company that tours will understanding it as a public collection and, therefore, find it harder to take its work to people outside of there needs to be as much public access as possible. London; so what we end up with is a potential So I can see there being some very harsh choices concentration of artistic activity in the capital and having to be made about where the money goes and maybe one or two other metropolitan areas that are how you would choose to spend what you have left, fortunate enough to sustain those systems but, for the because it isn’t just cuts to Renaissance funding or large majority of the people, potentially their ability cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 10 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter to consume and to see is much more constrained. So looking at is how we, at the heart of the Arts Council, there is an impact on touring as well. have a usefulness function; so we help people do Mr Davey: And that is what we have to take into things better by bringing people together, by spreading the decision. the knowledge and having the expertise on hand for Chair: Paul Farrelly. people to access, particularly smaller organisations. Paul Farrelly: I see, Chairman, the point I was going But something like that is very interesting. to come in and make we’re going to make in the next section. Q70 Damian Collins: Finally—because I know we Chair: In which case, Damian? have other things to move on to—in their submission Voluntary Arts England had a concern that, because Q67 Damian Collins: To Alan Davey again, of the way the Arts Council was set up, big following on some of those last comments with organisations will continue to do relatively well and it regards to the regions. How would you see the is the smaller, more local organisations run by relationship between the Arts Council and local volunteers that will struggle because they are not set authorities? Particularly, I have heard some criticism up to access the bidding process, and cuts to their from local authorities that the process of acquiring budgets could be so catastrophic that it will just wipe funding, given it’s between two public bodies, is out what they are doing. Do you share their concern sometimes overly complex and bureaucratic, and about the process of applying for funding? And, if we where do you see scope for streamlining that system have time, I would be interested in Louise de Winter’s of funding? view on that as well. Mr Davey: I think there is scope. We have to get Mr Davey: Well, what we have to do is make sure our through the next particularly difficult phase, which is processes are fit for purpose for these smaller around cuts and how we manage that. What we organisations, and we have to watch ourselves and learned from our last investment strategy is that we make sure that we’re not building in biases against do need to keep talking to local government as we do them, that results that are coming out aren’t skewed. it. But ultimately, and we are not there yet, what I We’ve been working with Voluntary Arts England a want to be able to achieve is some kind of coincidence lot over the last couple of years and I think that’s a of monitoring arrangements and, therefore, simplicity kind of new development and we’re going forwards. of monitoring arrangements between us and local We’re going to publish a 10-year strategy in government. With some key local authorities, we are November about where the arts should go and the having discussions as to how we can achieve that. So participatory sectors and the voluntary arts are written I hope that that will become a feature of the landscape in there for probably the first time in the Arts over the next four years and beyond. Again, the whole Council’s history. I read one of my predecessor’s rants aim of this is to take out the administrative burden in his annual review where he’d complained at having from arts organisations who want to get the money in to cut funding from the only non-professional arts order to do their work. organisation that the Arts Council funded. That was in 1982, I think, and that isn’t the case now and I hope Q68 Damian Collins: Newcastle City Council said it won’t be in the future. in their written submission to us that funding should Chairman: Jim, very quickly, do you want to come be delivered with reduced and the very minimum of bureaucracy, which suggests a frustration on their part in? that there is too much of it. Where would you see the priority areas for reducing that bureaucracy? Q71 Jim Sheridan: Yes, just with regards to your Mr Davey: I described earlier on that we’re moving answer you gave to my colleague Thérèse earlier on, to a new system, which will be application-based for surely the best way to encourage local authorities to the first time. We want to be realistic going forward get interested in art is to give them access and as to what we’re requiring of people because at the information about art. I think it is incredible that moment it’s a kind of “one size fits all”. So if you’re you’re paying these storage costs for things that an Regularly Funded Organisation (RFO) we have a people will never ever see. There is a perception, whole set of monitoring stuff that we apply, whether rightly or wrongly, north through Watford gap, that you’re a big organisation or a small organisation. arts in this country is the preserve of London luvvies. Clearly that’s not right and that’s something that we’re So why don’t we get these art collections out into the changing with the new system. If we collect regions and give the regions ownership over them and, information it has to be for a purpose and we have more importantly, get current and future generations to be able to show some benefit to the people we’re access and information about these things rather than collecting it from, making our processes as lean as we have them stored somewhere where no one is ever can so that one at least speaks for the front line. going to see them? Mr Davey: I share that sentiment, what you want to Q69 Damian Collins: In the submission Newcastle achieve; that sentiment I share completely. I would also suggested that you consider an investor save add that some of the Arts Council collection is in scheme for organisations, to encourage them to take a Yorkshire at the Yorkshire Sculpture Park, but getting more creative approach to finding efficiencies. Is that it out is something that I really want to do and there’s something you’re considering? various ways of doing it and that’s what we’re looking Mr Davey: It’s something I’d be very interested in at in the collection strategy. But yes, I take your point. considering because, going forward, what we’re Chairman: Damian? cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 11

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter

Q72 Damian Collins: I had asked a specific question One of the ironies is that whenever we’ve gone to the to Louise and she indicated she wanted to respond. private sector for sponsorship, for annual awards, for Ms de Winter: Yes. Paperwork is always a problem, major contributions, some people have said, and Clive admin is always a problem, but I think anybody who Gillinson who wrote a very good open letter to the applies for public funding understands they need to Secretary of State says, “Arts and Business does a go through that and do that. But many arts marvellous work for the public and private sectors but, organisations don’t just get funding from Arts unfortunately, we don’t want it to receive money from Council, they get it from the local authority; they the private sector. We’d like that all to go to the arts apply to lotteries, not just the Arts Lottery but the Big community”. So we’re rather squeezed. If we receive Lottery; they go to trusts and foundations for funding. public money, people say you should only get it from I think the big issue is having to repeat information the private sector, but we’re here to serve both sectors on all these different forms. The biggest plea I’ve had and we want to serve it passionately with rigour and back from members is to say, “Is there no way that vigour. But being nationalised would, I’m afraid, be we can join up some of the forms so some of the something that I think our sectors would be worried information is generic across the board and then about it. where you need to you can tailor it?” but that is the big wish. Q74 Chairman: Can I just be clear? If you do not receive any public money, then Arts and Business Q73 Chairman: Colin, I think everybody has agreed will close? that if Government funding is going down, one of the Mr Tweedy: We would cease in our present form. We priorities will be to try and increase the amount of would not be able to advise the cultural community. philanthropy and business sponsorship. That has been At the moment, we train hundreds and hundreds of very much the role of your organisation, but you’re arts organisations through one-off meetings to training also dependent yourself on Arts Council funding and programmes around the country, and we would not have our annual awards, we would not be able to fulfil you’ve illustrated to us some of the cuts you’ve the Alec Reed Foundation’s vision for The Big Arts already experienced. Can you tell us what your future Give, basically where £300,000 will turn into £3 holds in terms of funding; whether you think you’re million, we believe, at Christmas for the arts across going to be able to continue to do the job you’ve the country. No, effectively we would not exist in our been doing? present form, but the most important thing is we Mr Tweedy: You’ve asked me a direct question, would not be able to train one arts organisation Chairman, and I’ll give you a direct answer. We’re because we’d literally have to go back to all our very frightened for the sectors we serve, for the business members and say, “Do you believe in us? private sector we serve and for the cultural sector, that Could you support us?” we will lose our grant and we’ll effectively be nationalised. This is something we are concerned Q75 Chairman: In which case, can I put it to Alan? about because for 34 years we have been the voice of Do you intend to cut the grant to Arts and Business? the private sector and, as my founding chairman, Lord Mr Davey: I’m not able to tell any of the bodies we Goodman, said, “It should be the court of final appeal. fund what our intentions are at the moment, and Arts When the public sector turn you down there should and Business will be considered with everyone else always be the private sector”. £655 million comes when we get our number next week. What I can say from the private sector to the arts in this country and is that we take private giving in its broader sense very we are concerned that there is a danger that we will seriously and we’ve been undertaking some work over lose our grant. the summer as to how we can sharpen our sense of I’ve pressed Alan on this and he is not able to give that and particularly with our relationship with the me any assurance. I think we, as a sector, are RFOs going forwards. In doing that, we’re clear we’ll concerned and I think the private sector would be very have to work with partners and Arts and Business is disturbed if the private sector voice was silenced one of those many partners that we’ll be talking to. because I think our voice representing the private sector and for those 7,500 arts organisations that do Q76 Chairman: But it is not just a question of not receive public funding from the Arts Council, we talking to, it is funding. are their voice as well. Therefore, we are concerned Mr Davey: No funding decisions have been made yet, about our future and obviously we believe that the so I’m not able to say anything. private sector deserves the voice which we have served for many a year. Q77 Chairman: Well, you are talking about whether But we’re acutely aware that we have been labelled a or not it’s going to be maybe a 25% or a 30% or a quango; we’re not. We’re a private sector body and, 40% cut, but surely you are able to say that it won’t as Tom Watson has said to me in other moments, we be a 100% cut. are aware that we will receive, if we still survive, a Mr Davey: Well, I can’t say that about anyone at the very, very large cut, I would imagine, and we will moment. As far as I’m concerned, Arts and Business bear it because we believe that ultimately we see our are an organisation we should be seeking to work future maybe without public money. But if we are to with, but it is unfair in a way because Colin is sitting exist, we need public money for the next three or four here as one of our RFOs in a privileged position. If it years at the very least to galvanise the private sector was any other RFO, I wouldn’t be able to say exactly to support us totally. what they’d be getting next week or after next week. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 12 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter

But as Colin has said, he and I are talking and Colin years. We’re not an arts body. We’re not an RFO. We has expressed his own uncertainty but it’s an are technically a private sector initiative who used to uncertainty that we all share at the moment. be funded direct from the Department itself. We have a very good relationship with the Arts Council but Q78 Chairman: But you recognise the importance of we’re very conscious that the world is moving on. trying to increase private giving and business Within five years I would look to my board and my sponsorship? board are acutely aware that then basically it’s Mr Davey: Yes. something of a—I’ve forgotten the phrase—necessity of grace, something of an invention, and we would be Q79 Chairman: Do you think that that could be a private sector body, but that’s our vision for the achieved without Arts and Business? future. As I’m sure many of my own colleagues are Mr Davey: That’s hard to say. There are possible listening to this session today, they will be rather partners that we could work with but Arts and frightened to hear me say for the first time publicly Business is an important partner. that we’re in danger, but I hope that my fears are not there and in five years, yes, I would hope we could be Q80 Chairman: Colin, do you think that the work a private sector body, strong and articulate, to serve that you are doing through your organisation could be our sectors. done elsewhere? Mr Tweedy: A public agency could do a certain Q82 David Cairns: To a certain extent, in your oral amount of training and could do it perfectly evidence and in the written evidence as well, you are adequately, but the unique purpose of Arts and referring to the UK and Britain and the work that you Business—we are dual purpose; we speak with the do across there, and there is a reference to A&B voice of the private sector, we’re funded by the private Scotland in your written report. How are they funded? sector. We speak to philanthropists. We have our How is Arts and Business Scotland funded? Cultural Champions programme. His Royal Highness, Mr Tweedy: Essentially, by the business community the Prince of Wales presents the Prince of Wales in Scotland and Creative Scotland. Creative Scotland Medal for Arts Philanthropy which we manage for is the new body formed and it’s seen maybe as a him. Our voice is the voice of the private sector and model for England, I’m not sure, but our director in that’s why we are able through all our training Scotland serves on the board of Creative Scotland and programmes—and we, for example, now select they fund us to deliver the private sector realm in mentors for the arts community from the leading Scotland and we do. We’re funded with a mixture of fundraisers in Britain. We co-ordinate those both Government direct money in Wales and in fundraisers to help others in the sector. But, Northern Ireland, also with the Arts Council. But our unfortunately, if you silence the voice of the private offices in Scotland, Wales and Northern Ireland are sector as a private sector body—I think that if the effectively independent. Government’s vision is letting 1,000 flowers bloom, that communities develop their links across the Q83 David Cairns: But that’s not what I’m getting country, centralising decision making on the private at, and I’m speaking on behalf of my English sector in one body would be an extraordinary decision colleagues here. There’s no Arts Council England and I couldn’t understand any Government of any hue money going to— doing that. But no, I do not believe anyone can deliver Mr Tweedy: Absolutely not, but we believe that as a valuable programme of work to the cultural businesses are UK in their vision, that it is very community if you do not work on a day-to-day, hourly helpful for all of us to be a UK body, but the majority basis, as we do with all our staff, with the private of our work and the majority’s need is inevitably in sector because we know what they will fund and how England. we can help the arts community together with the 500 business volunteers we have who we, every year, Q84 David Cairns: Are you facing the same “threat” place with arts organisations to help them in their in Scotland in terms of money coming from the Arts governance and their management. Council of Scotland to Creative Scotland as you appear to be under threat here? Q81 Chairman: You suggested that over time you Mr Tweedy: No. It’s difficult with Alan sitting next to would like to become a wholly private sector-funded me and we haven’t rehearsed any of this. There is no body. Arguably, you might carry more credibility if threat in Scotland because the Scottish Minister and you didn’t receive public funds. Is there any way in Creative Scotland believe that you cannot deliver which you could move directly to that position? more money for the arts from the private sector unless Mr Tweedy: Directly, no. If we lost our grant you do it with a private sector body. And I think that’s tomorrow—as I said, it’s £3.8 million or something— the same in Wales and the same in Northern Ireland. if that went then all the staff of Arts and Business They understand that you cannot move a private would be made redundant immediately. But clearly, if sector body into a quango because the private sector we are helped to fulfil our mission to the public and has its own views about independence and its own private sectors over a period of time, we absolutely voice. accept that the world is in a different place and that many museums and theatres may also find themselves Q85 David Cairns: There is a real danger that in a different funding environment. We’ve taken the actually then we could be drifting in different largest cuts in the cultural community in the last three directions here? If the doomsday scenario happens in cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 13

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter

England and does not happen elsewhere, there is a some businesses’ wish to get involved because I think real danger. a lot of the business community and philanthropists Mr Tweedy: Real danger, and I would predict that have said, “We’re all in it together and everyone has private sector funding in England would stall. to bear the weight of the cuts”. But I do believe that the arts community has now realised that actually the Q86 Damian Collins: In the Arts and Business private sector can be rather wonderful as a funder. submission to the Select Committee, you state that for Ms de Winter: I would just like to follow up on that. every £1 you receive you attract between £4 to £6 I think that’s right. There is no instinctive aversion worth of investment from the private sector, and the to doing business with the private sector from arts Arts Council in its submission makes clear that for organisations. Where there might be potential tensions every £1 it spends it brings in £2 from other sources. is if, for example, a funder says that they would like Given the difference in those statistics, would you say something to happen with a particular production that we need a bit more of the approach of Arts and didn’t actually suit the vision of the artistic director or Business to funding of the arts in the UK? if, for example, the funder didn’t like a production or Mr Tweedy: I like what you say, Mr Collins. I think didn’t like the tone, if you like, of a play, then I think we provide rather good value for money. that’s when the arts company would part company with that particular funder. Q87 Damian Collins: You also say that private Mr Tweedy: But there’s no evidence that those sector income for Arts and Business members is 24% funders have ever done that. to 30% higher than for non-members. Why do you Ms de Winter: No, but that’s— think that is? Apart from obviously the expertise you Mr Tweedy: In the last 40 years never. provide, are there other reasons why non-members are struggling to attract the same level of private Q89 Damian Collins: If I could just ask two quick investment? questions to Alan Davey. In general, do you think Mr Tweedy: I think the arts community who are there are any lessons that the arts sector could take members understand the priority that they place as arts from the National Trust, which obviously does not institutions in private sector funding, and that’s why receive any public funding? we attract them as members, because we provide them Mr Davey: I think there may well be in, for example, with a lot of free advice, a lot of support. They are the use of gift aid, which is very variable in the arts invited to all our events where they meet the business sector, and membership friends schemes that Colin community. This was a study done by Frontier was talking about earlier, and also legacies. There are Economics where we wanted to show our value— a whole lot of possibilities of raising money at the because it’s very different, as with any organisation moment that the arts sector is perhaps a little which is about advice and advocacy—to prove our underdeveloped in across the whole piece. Some are worth. So, we do believe that the people who are good at it. Some are better than others. committed to us are the ones who understand our Just to reinforce what the other two have just said, value, though clearly we also would try to help all the there is a definite change of attitude now and 7,500 arts organisations which are on our books at any particularly the younger people who are coming into one time. any arts organisations wouldn’t think of not dealing with the private sector in any way. That kind of bias Q88 Damian Collins: Do you think there is a that might have existed a few years ago I think is reluctance within the arts sector to have too much largely not there. involvement from business, that people would like to defend their own little empire and keep the private sector at arm’s length? Q90 Damian Collins: Just one final thing, in the Arts Mr Tweedy: I have been told many times that arts Council’s submission to the Committee, it states that, organisations, certainly in the past, believed “public “One thing is clear. A move to a US system should good, private bad” and they were deeply suspicious not be the aim. Rather we should strengthen the of the arts community being distorted or damaged by private element within a mixed economy”. Now, I am private money. I think that has long gone. I think now sure we will all agree about strengthening the private the majority of arts organisations simply desperately element, but the question I have is, are you saying it want the money; hence we, with the Community cannot be the aim because it is not something we Foundation Network, want to create these new funds could achieve within the UK system, or it should not in local communities so that local money can be put be because we should not be in a system where the in so that they can do that. Because I think the days arts are largely funded by private donation and have gone where they thought they would be philanthropy? censored, but I do think that now, as Alan Davey said, Mr Davey: I think there are two points. I think were there is this sort of tripod. We call it a gold standard we to decide to move to a US system there’s many, in our private sector policy for the arts that we many things that would need to be done. There’s launched in April. It was basically a third; a third; a something about the culture of giving and the culture third; and that is a good model. It is not the case that of recognising giving, which would take a number of it’s replicated across the country at the moment, but I years, I think, and quite a lot of work and example to would certainly say there has been a transformation in change. There are also the ways the incentives work. the attitude of the arts community. A lot of the There are lots of incentives to give at the moment and comments made in the public press have damaged gift aid is quite a generous system, but compared to cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 14 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter the US system it’s more complicated and the benefit have to start to produce towards more popular, well- doesn’t accrue to the donor. The US is very, very— known programmes. Some of our best fundraisers in this country, some of our best institutions who make Q91 Damian Collins: But in the submission you say a lot of money fundraising and attract a lot of private “aim” because we should not be trying to get to that support, still find it difficult to get private money for position, and what you are saying in your answer is up and coming talent that they are trying to develop, that there are lots of reasons why we probably might or for new productions which aren’t things like “The not be able to, but it sounds like we should not even Magic Flute”, for example. So, there is a real role be trying to go on that road in the first place? where public investment actually plays a very Mr Davey: I don’t think we should be trying because important part in that. I think something like the mixed model—and, as I Chair: Paul? say, it could be varied and the different proportions can be varied. You might look at Canada, which has Q93 Paul Farrelly: Thank you, John. Mr Tweedy, as different proportions to us but it is very much a mixed I understand your evidence, just picking up on model, but they do have more US-style Damian’s point, the figures work out that if you did entrepreneurial fundraising there. I think the US not exist and if you did not have the Arts Council model, if you look at the arts across the US as a grant to sustain you in your present form, then around whole, leaving aside the metropolitan centres, doesn’t £20 million of private sector investment that is there have the range and reach and quality that we’ve been now simply would not happen. Is that correct? able to develop here. And if I return to what I began Mr Tweedy: I find it very difficult to say if we didn’t by saying, we have developed something remarkable exist it would be X or Y. I believe the sector would here and the aim of us involved in arts funding going be damaged because we are the ones who celebrate forwards is to manage it in the best way possible to the sector through our annual awards across the make sure, whatever the number is next week, we country, both in England and, for example, last week maintain that quality and reach and innovation and we had our awards sponsored by Jaguar Land Rover world-beating standards that we’ve got. in the Midlands. Now, we don’t calculate how much Mr Tweedy: I would say that Alan is absolutely right money we are celebrating, but it’s millions of pounds on we don’t want US-style funding, but I would say of money to the Midlands which is given by the we do want US-style private sector funding, which is business community. Ed Vaizey, the Minister, was a in a different league to us, and where philanthropists guest at our Cultural Champions event in Birmingham are celebrated rather than ridiculed or suggest that all two nights before to celebrate the work of hundreds they’re doing is fiddling their tax returns. Arts of volunteers and small-scale philanthropists who are organisations in America are, I sense—the private giving their money now. That is a lot more than £20 sector in Britain will come out of recession far faster million if you go across the country. Therefore, I than the public sector. I think encouraging that sense would think it is like if the Arts Council was abolished, what would we lose? In other words, I of can-do environment, which is so American—at the think that our value is clear. We’ve tried to calculate moment America is being hammered because of the a value because the sector across the UK enjoys £655 role of the private sector, and continental Europe million from the private sector, and I would say that hammered because of the public sector funds. Arts and Business has an influence well above £20 Therefore, the British model could be the best, but we million on that. But, clearly, if you lost such a body would also aspire to the very best of fundraisers. Of and lost the work we do in celebrating the role of the course, we have now in Britain some of the best arts private sector and bringing philanthropists together, fundraisers in the world. It used to be always they and supporting their work, the knock-on effect could were at the Met or whatever, or the New York City be very, very substantial. Ballet; no, they’re here as well. And, of course, some of our major people like Sir Clive Gillinson leave the Q94 Paul Farrelly: So if you wanted to be modest, LSO to work for Carnegie Hall. there is a danger that ill-thought-out cuts might at least kill a golden gosling if not a golden goose? Q92 Damian Collins: We could do with a few more Mr Tweedy: Indeed. I think there is a huge growth Roger De Haans, people like that. potential in the private sector, which could be dashed Mr Tweedy: We need a lot more Roger De Haans and if policy decisions—which may not be just about I know he supports your constituency with great joy. money because we don’t even get £4 million from the Ms de Winter: Can I also just say that America looks public purse, which is not a lot of money when you with a certain degree of envy at us; particularly theatre see the whole sector in the UK is £655 million. There producers in the States look to the UK and the new may be a policy decision being made somewhere that work that is coming out of British organisations and we don’t know about, but I think the private sector new young British playwrights, and wish that they had feels that they like the support of an organisation. And some of that investment that could go towards in November our annual awards at the Museum of supporting that. I absolutely echo everything that London will be celebrating hundreds and hundreds of Colin and Alan have said about the need to stimulate businesses who have given money to the arts, and more private investment. We’d like to see much more hundreds of philanthropists will be marked by the of that, but let’s not forget what that also means. If Prince of Wales Medal for Arts Philanthropy and our you rely wholly on private investment, you get a very Cultural Champions programme, and I think those are narrow view of what the arts should be like and you the people who need celebrating and thanked. I know cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 15

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter

Government can do it and hopefully we will do it in asking of you. I hope that will enable us to better tell partnership with Government. people about the cause and effect of the kind of work an organisation like yours does and whatever other— Q95 Paul Farrelly: I just have one second and final theme. I, too, like many people am worried about the Q96 Paul Farrelly: If I could intrude on private grief impact in the regions. My constituency just happens just for a moment, just before handing over to another to lie on the border of Newcastle-under-Lyme and colleague, I want to state the point that I raised the Stoke-on-Trent, we have a wonderful issue of the interesting application of crowding out, theatre-in-the-round, the New Victoria Theatre, which not to criticise Mr Moulton, who has stayed close to is very innovative and also does lots of things to help his roots in Stoke-on-Trent and is a very generous support, particularly, children and people with benefactor, but it is an argument that goes beyond one learning difficulties and underprivileged children in that simply says if the state moves out the private the community and give them confidence. One of the sector can fill the gap. It goes rather beyond that, and benefactors of the New Victoria Theatre, thankfully, it was an interesting argument but for which, in is Jon Moulton, a very successful venture capitalist summary, there is no support. and also a veteran of Government or Opposition Ms de Winter: We find in nearly all of our efficiency reviews. I think he met his wife at the membership that you need a little bit of public theatre. I was listening to him a few weeks ago and investment there to show that it’s a bona fide he seemed to suggest that, proselytising the need for company, if nothing else. There is some sort of faith— cuts, the availability of state funding, in some sense, Mr Davey: Seed capital. crowds out private sector investment and Ms de Winter: Yes, seed funding. beneficiaries. Is there any evidence of that? Mr Tweedy: I would say that the private sector is Mr Tweedy: I’m not sure there is. I sense that nervous and concerned about the cuts because they sometimes philanthropists who are giving of their own are passionate about the arts organisations they fund money, rather than through the tax system, feel they’re and they don’t want them damaged. What has not not thanked and there’s a sense of suspicion about been seen as much is perhaps the private sector’s them. But I would hope that Mr Moulton would see it voice in these issues. I think the private sector has as a partnership with the public sector and that some tried to keep away from public sector cuts, as we’re institutions, obviously rather famously like the all aware they’re making substantial cuts in their own Glyndebourne Festival Opera and the Royal Academy businesses. We are working closely with quite a few of Arts, receive no state funding, which is always of the international banks; for example, Bank of used. But I think it should be seen as a partnership America Merrill Lynch is really stepping up its but inevitably there are some strong views in the funding of the arts in the UK. They funded a Gauguin private sector both as company men and women and show at the Tate and they’re doing an extraordinary philanthropists. Of course, I try and always remind project in Florence at the Palazzo Strozzi, and in people that 70% of all philanthropists now work. It’s Westminster Abbey where Bank of America Merrill not the landed gentry of 20 or 30 years ago. They Lynch is funding 10 major artefacts from Westminster have strong views, and I’m sure Mr Moulton has very, Abbey for the nation of Britain, which I think is a very strong views, but I would like to think it should rather wonderful example of a bank that is moving be a partnership. Obviously, if one body like Arts and away from the difficulties of three years ago—an Business left or vanished, it might be seen as a signal American bank—to really help contribute to the arts to him that this partnership was not going to be of this country. realised, but I would hope he would look to the private Chair: We need to move on to our next session, but sector, to the arts community and to the Arts Council, just finally before we do, Alan Keen? and to the Department, as champions for him as well. Mr Davey: I think perhaps one of our jobs going Q97 Alan Keen: Can I just ask quickly about one forwards is to get better understood this mixed aspect of this? We know the arts are going to suffer economy model and its complexity and the fact that cuts. We also know how important volunteers are, the there is room, considerable room, for private sector people who keep these organisations going. Are you investment in various ways. I think one of the features going to have the resources to put into an area rather that I’ve observed in the arts sector that we partly than just making cuts and destroying organisations sponsor is that willingness to enter into more that have lasted and operated for a long time, with commercial relationships going forwards. If you look tremendous effort from individuals without their being at the partnership between West End theatre and the paid? Are you going to be able to help those, maybe subsidised sector, for example, you can see that in use resources from one larger organisation to help action, and the orchestras are other examples of that. smaller ones to keep those key places going? Will you Just following on from some of the things that Colin have the resources to do that? has been saying—terribly unfair of you, in a way, to Mr Davey: That’s very much one of the things that plead your cause so publicly—but rest assured there’s we want to achieve with the job that we do over the no kind of notion of nationalising Arts and Business. next four years, and what’s been gratifying is that All that I will say is that when we come to talking we’ve been approaching the larger organisations and about funding decisions, we, the Arts Council, are they’re up for this. We’ve been talking about this going to be going forward as a much more intelligent wider civic duty, if you like, where we’re putting a lot customer of our aims and objectives vis-à-vis private of money in, asking people to take on duties, towards giving, and we’ll be clearer, I hope, in what we’re the smaller bits of the sector and working more cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 16 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Alan Davey, Mr Colin Tweedy and Ms Louise de Winter broadly than perhaps they’ve been able to before. contributing to the community in ways nobody knows When we produce our 10-year strategy, which will be about, but there’s also the unsung hero who in a the framework for investment that we make, that will modest manner can help with box office, financial be at the centre of it. accounting, and these are people who will give their Mr Tweedy: Our Arts and Business Cultural time free. Champions programme is absolutely designed—for the very first time we invite a Government Minister Q99 Alan Keen: But is there a structure? to host the reception with us, or a senior MP, and we Mr Tweedy: Yes, we have a structure which manages celebrate these volunteers. We decided it wasn’t just this across England and across the UK. people who were giving money, albeit important, but giving their time. We’ve invited every arts Q100 Alan Keen: Does the Arts Council for England organisation in the country to give the names of the operate in this? Are you going to operate in this? It is people who they want thanking. In Nick Brown’s going to be more necessary when the cuts come. We constituency in Newcastle there were two or three cannot afford to have—just take West London and people in tears saying, “No one has ever thanked me how many arts organisations there are. If there are for being a volunteer for this theatre or this arts savage cuts, we do not want any of those—there are organisation”, and it was wonderful to see—they always one or two that we could do without—to clutched their certificate from Arts and Business and disappear. Are you going to put in a structure linked said, “This is going on our mantelpiece”. Being in the with the private sector to make sure that we get foyer of the theatre, that volunteer effort is what, as through this next three or four years without losing Alan says, needs to be more and more celebrated. It’s the organisations that volunteer— not just saying we need them, but we have to thank Mr Tweedy: It’s something we’d like to do together, them because we have to love them to bits because isn’t it, Alan? they could do other things other than support the arts. Mr Davey: Well, that’s something that we’re very conscious of and we’re funding a number of models Q98 Alan Keen: We have talked about the private like that, interestingly, at the moment: High Tide in sector giving money. Are you going to try and use the Norfolk. What I think it’s important to bear in mind is private sector in local areas to maybe give hitherto we might have thought about theatres linking administrative support to organisations that have the together or something like that, but actually locality is skills in the arts rather than being a bureaucrat. often more important, and having the expertise, if it’s Mr Tweedy: We have a programme in some of our in the private sector, but in the local area where the regions called Skills Bank, which is absolutely—why arts organisation exists is more important. Yes, there do people pay for advice that a lot of the private sector should be more of that and we’ll work to do that. and a lot of individuals give for free? There are a lot Chair: We are going to have to stop it there because of people who are leaving work. We know, for we have run slightly over, but can I thank all three of example, a lot of investment bankers, and so on, you very much? leaving jobs with very strong pensions who are

Examination of Witnesses

Witnesses: Mr Simon Eden, Chief Executive, Winchester City Council, Mr Gary Millar, Councillor, Liberal Democrats, Liverpool City Council, and Mr Guy Nicholson, Councillor, Labour, Hackney Borough Council, gave evidence.

Q101 Chair: Can I first of all apologise to the three Mr Millar: It’s the first time I’ve heard arts called a of you for keeping you waiting so long. Thank you luxury. I’m from Liverpool, which held the best for coming. For our second session we are now going Capital of Culture ever—as pronounced by the to concentrate on local government and, therefore, can President of the EU Commission. Whether it’s I welcome Gary Millar from Liverpool City Council, debatable or not, culture and the arts has had a huge Simon Eden from Winchester City Council, and Guy impact on Liverpool over the last five or six years, Nicholson from Hackney Borough Council. David? never mind the last 800 years. £800 million of additional economic spend because of arts and culture Q102 David Cairns: Thank you, Chair. At a time in 2008; 27.5 million visitors came to the city from when you are going to be struggling to meet your outside of Liverpool because of arts and culture. That statutory requirements in education and social care, created jobs. It created jobs in not just the hospitality, and so on, and you are going to be getting additional the hotel, the bars, the tourism sector, which is very responsibilities in health promotion and all the rest of important, but also in relationship to creating add-on it through the reforms in the health service, isn’t the jobs in the knowledge economy or the science truth of the matter that funding the arts is a luxury economy as well, because it was a five-year process which local government can no longer afford? from when Liverpool won the bid to actually Mr Millar: Well— delivering Capital of Culture. It’s not just about David Cairns: If you all say yes, we can go home Capital of Culture, it’s the legacy moving forward. now. Moving into 2009 and 2010 in Liverpool this year is cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 17

12 October 2010 Mr Simon Eden, Mr Gary Millar and Mr Guy Nicholson the year of health and well-being, delivering the “five- you don’t have to provide money for the arts so that a-day” which includes “Connect” and “Give”, “Keep goes first, that there is a need for some kind of Learning” and so on. They’re not luxuries, they are statutory recognition for this? Otherwise, good though the thread that runs through everything that Liverpool it all is, it’s all going to be the first to go. City Council and the public sector and the private Mr Nicholson: If I may respond, I think your original sector is delivering, and keeps delivering for arts and comment is well made. Like all services delivered by heritage. So I wouldn’t call it a luxury at all. I think colleagues in local government across England and it really is incredibly important to keep supporting arts Wales, all of those services are under some kind of and heritage and culture in all its forms, whether it’s pressure or threat in the months ahead of us and walking in a park, watching a football game, working certainly for the coming three years and that’s been on the internet, or going to an event in either a gallery recognised in town halls across the land. Now, I think or a theatre or visiting a museum. Liverpool has where it is that perhaps cultural spend has got to, and National Museums Liverpool: 3 million visitors in my colleagues were referencing some of this, is that 2008, slightly less in 2009. The actual visitors to the the picture varies profoundly across England and museums in 2007 was 1.9 million, so to go from 1.9 Wales—so from council to council, from community million to 3 million people visiting a museum is to community—about the importance that’s placed on incredibly important because it’s about education. It’s the investment made into participatory activities, arts about new experiences. Again, I don’t call that a and culture being one of the most profound streams luxury. of activity through which participation can and does Mr Eden: I think, Chair, if I can add; I come from a take place at a local level. In some places there is a very different area, work in a very different area from great deal of recognition, a great deal of emphasis— Gary. Winchester is the south, prosperous and a two- and this is as much in the great urban centres as it tier area in terms of councils. The district council sits may be in the more district-type centres—and within Hampshire. We work closely with the county importance is placed upon cultural participation. council. I also work as part of a partnership of 11 local That’s not where our worry is. authorities in urban South Hampshire, the two city There are other places in the land where that is not regions of Portsmouth and Southampton, and we don’t the case; where there is, for one reason or another— see culture as a luxury either. We put, between us, a and it’s not always a blame that could be laid at the significant amount of money into cultural projects and door of one organisation or one institution—a lack of we don’t do it just because culture and arts are good engagement, a lack of interest perhaps, a lack of shall things, for art’s sake. Of course there’s an argument we say an understanding of the importance that arts for that. But the way the members I work for and the and culture could play if the finance and the funding members I work within that partnership see it is that and the investment is aligned with that of the youth by investing in cultural activity they’re providing service, the community safety portfolio for example, something for young people to do. indeed economic development around both job For example, there’s a very good dance project that creation as well as business development. All these the county and the district have invested in, which is various strands of activity and more besides, including in one of the more deprived areas. “Deprived” in our the future of the health budgets for example, all these terms, by comparison with perhaps other parts of the things bring duality and additionality to the country not so bad, but kids who are hanging around investment that comes into the arts via the Arts on street corners causing minor antisocial behaviour; Council and via the local authorities and via the the lads in hoodies, if you like, sometimes. Putting heritage bodies. money into that project has those involved in street The challenge before us all is not necessarily a knee- dance and there was a notable reduction in antisocial jerk response about ring-fencing and statutory behaviour as a result of that. So we don’t see arts expenditure but I would suggest it’s about aligning the culture as a luxury. That’s just one example of where institutions and saying to the institutions, “Now is the if you invest money in the right way, through the right time to jointly invest into these participatory activities project with the right partners, then you’re delivering that now, more so than perhaps ever before, are going some really good things for your communities that are to be more relevant for the future well-being of our the sort of things your constituents will have local communities. It’s not the capital spend, I suspect, concerns about. that we’re going to have the luxury of using in the years ahead of us. It’s going to be that revenue spend Q103 David Cairns: Sorry. Clearly my question was into participation to ensure that, at the very least, our intended to provoke discussion, not to reflect my communities remain coherent and cohesive; they personal opinion. But given all that you say then and remain neighbourly. given how wonderful this spending is in terms of its economic regeneration, tourist potential and Q104 David Cairns: I get all that and that’s a very educational blah-blah-blah, do you think there’s an good vision but I suppose the point I am making is argument then, given that it’s not statutory—like we don’t leave it to local authorities to decide whether you’re having to provide education and social work or not they want to invest in education. They are told and all the rest of it—that there should be statutory they have to do it and then they are inspected recognition of the spend? Because, as a former nationally. We don’t leave it up to them to decide councillor myself, you know that when you have to whether or not they want to invest in services for old make cuts, where you’re facing a choice where you people, they have to do it; or young people, they have know you have to provide social work or teachers but to do it. It is not up to them to say whether or not to cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 18 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Simon Eden, Mr Gary Millar and Mr Guy Nicholson clean the streets. They have to do it. If this is as difference in central government in terms of important as you three all say it is and it brings so delivering cultural activities that are seen to be much more both to the inhabitants of the boroughs preventative. and of the cities and of the tourists and all the rest of I’ve seen relationships in Liverpool in particular it, it is still pretty much discretionary how you do it. where we have a very good relationship with the And I was just wondering whether or not—given that Primary Care Trust and we have co-funded and shared we are about to enter a very difficult time and, okay, resources in supplying services that are seen to be I appreciate that ring-fencing and direct targets are out partially cultural but it’s about that activity. It’s about of fashion; not with me but they are with the current doing a dance, going to a dance, going to a sports administration and we may see that reflected in the activity, doing something with crafts, but through the course of the questioning—but do you not feel that, health service about making a bigger difference to the unless there is some kind of policy determination on local communities. But that’s decisions being made this, your wonderful causes that you’ve outlined, good locally that are appropriate locally. It’s not a “fit all” though they are, are not going to amount to a hill of type of situation. It fits Liverpool. It might not fit beans when it comes up against the statutory some other areas. I would think it probably does in requirement that councils have to fund in an era of some things that we do and there are lessons to be constrained spending? learned but I think what could be seen to be a front- Mr Eden: I tend to argue with my colleagues, with my line service or a statutory service, if that’s what it is, members, that a statutory discretionary split, statutory/ is with a health and well-being agenda and that is non-statutory, is not the right way to look at things through relationships with whatever the health now. We’re being told, I think rightly, by Government services are, together with the local authority and the that they want to free us up and allow us to do more private sector and volunteers and so on. So saying it’s according to local choice and according to what our a statutory delivery; it should be an automatic local communities want, which I think is an excellent delivery; it should run through everything we do and thing. If you start putting things in statutory and non- it should be about prevention as well as having fun. statutory boxes I think you miss the opportunity for We still need the fun but we also need the some of the interactions between things and that’s prevention, too. where a lot of cultural projects come in. We don’t Mr Nicholson: Chair, just to add if I may; it does have an arts pot or an education pot or a social seem to me that the ring-fencing criteria is probably services pot any more, we look at how budgets can best applied as defining and setting outcomes rather affect different outcomes. That’s one of the buzz than ring-fencing budgets. I think that if you reinforce words we use at the moment, I suppose, but we look that with a legislative programme that sets about at the impact on our community. And if, by spending bringing the public sector in all of its various different money to support a theatre or a community arts group, guises and shapes and forms—in other words public that can bring in young people who would otherwise sector expenditure into communities—into a position hang around on street corners or it can help older where it is being required to jointly invest and finance people have something to do during the day, then into those outcomes and, as Gary was describing, all that’s a good outcome and you’re achieving the sorts of it defined in a very local context. By “local” we of things you want in terms of well-being for those would talk about a local authority area, for example, older people or stopping antisocial behaviour. So I wherever it may be. That, to me, would then start to think it will be a retrograde step to start putting things add a lot more substance to some of the ideas that in little boxes and calling them all “statutory”. we’ve been bringing forward in East and South-East The other fear I think we’d have in local government London where we’ve been using the 2012 catalyst as is that as soon as you call something “statutory” you the means by which, if you like, the legislation—and start coming back to targets and things like that and I I use the term obviously somewhat loosely in this know there are different views within the House on sense—provides us with the sort of direction, the sort the appropriateness or otherwise. But you’d expect me of catalyst, that can define a set of outcomes, bring to say that I think central targets stop that flexibility absolute consensus and agreement to those outcomes to spend money in a way that our local communities from a very, very broad range of organisations, want and that can make an impact in our local individuals, as well as institutions and indeed the communities. private sector, and focused on some very, very clearly Mr Millar: Can I add there is an element of a defined set of socio-economic and socio-cultural requirement for a “preventative agenda”, one that outcomes. prevents disease, illnesses, and so on? There are ways, Now, that is very valuable. What would have helped using culture and using the arts, to make people—and in that exercise is to have ensured that across the this might be seen to be fluffy and I don’t think it is— public sector there was an acknowledgement and an definitely to be healthier but actually to be happier, acceptance that that locally-led consortia approach, too. The introduction of culture in the business delivering on some outcomes, is indeed legitimate and environment, whether that may be, as I said before, in a position to be able to meaningfully take forward walking in the park or playing some sport or doing spend and bring forward some fantastic results in some physical activity, reduces absences, sickness. terms of outcome. That increases the economic value, spend and so on of that organisation. Whether it be really small or Q105 David Cairns: Thanks. Just one comment and really large, it can make a big difference. It can make then I will shut up. The nature of this exercise is that a big difference in local authorities. It can make a big we have three exemplary local authorities who really cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 19

12 October 2010 Mr Simon Eden, Mr Gary Millar and Mr Guy Nicholson value this and are going hell for leather and have seen I’ll do my advocacy here” and I said, “Well, this might the point of it. It might be an interesting exercise if be seen to be culture in Liverpool but it’s actually just we could find the three local authorities in the country you going about your daily life, having fun, getting fit that spend least on this and sat them there and ask and so on”. I think sometimes we have to articulate it them the same questions. But that is not what we are in a different way depending on where we are. What examining so I will pass back to the Chair. he did say is, “Plymouth”—and it’s not true—“lacks Mr Nicholson: Sorry, Chair, could I just very briefly ambition”. Plymouth has lots of ambition but it wasn’t respond to that because I think that’s a well-made being articulated in the way that he understood and point and I can give you an example where very appreciated. I think it’s about more communication, recently, I was in Sheerness on the Isle of Sheppey more dialogue; not just from other cities, other areas where there is an extraordinary local energy around whether it be urban or rural. It’s about people who’ve the future arts and cultural and heritage-led economy been there, done it and to come to summits and so on for that particular part of the land and, in particular, and discuss what we’ve done in other areas. It does that town—that great historical naval dockyard and so work. on and so forth. That is consistently an area where it’s Mr Eden: Being the officer here, I would start by coming up against a local authority that is not being saying you’re absolutely right. It is inevitable with receptive. It doesn’t quite understand and appreciate localism that some may take a decision, “We’d rather the opportunity there and it doesn’t quite connect what spend on this than that culture” or whatever you it is that is being described with some of those ideas choose to call it. I think the issue is making sure that locally with a future and future prosperity and, indeed, we properly understand the ramifications and the improving the quality of life for all of those people consequences of cultural spend. It’s not just about who happen to live in that particular town and indeed pumping £200,000 into subsidy for your local theatre. that particular area. And I think that is a well made It’s about supporting a theatre with an education point. That is happening across the country and our programme, making sure it reaches the schools, in our challenge is how can we move that best practice to case, for example, in the rural communities or making those communities, support those communities and sure in other cases, it reaches more deprived bringing forward the kind of philosophy that we’ve communities with an education programme and been describing, whether it’s on a mega-scale, a saying, “Is that having an impact”. If it’s having an macro-scale or a micro one. impact and it’s having effect, fine. If it’s not, then maybe you have your funding wrong. You shouldn’t Q106 Chair: But as Simon Eden rightly pointed out, be funding that. You should be funding that over there. we believe in allowing local authorities to have So it does come back to a local choice and we greater freedom to choose how to spend money. Some shouldn’t be, I think, expecting—which is my local authorities are going to choose to spend less on argument against statutory culture, if you like—that, the arts. That’s an inevitable outcome. therefore, everybody will get it and will spend money Mr Nicholson: I couldn’t possibly comment on that on culture. But I would ask that they think through one, Chair. the logical consequences of spending or not spending Mr Millar: Chair, could I add a comment to that? in particular areas and just think slightly laterally Because of our experience in Liverpool, I was asked about the sort of projects that you can stimulate and to visit Plymouth last week and deliver a speech on the changes you can have. Who would have thought “Culture Means Business” and the remarkable a dance project was going to get hoodies off the street transformation in Liverpool due to culture. And, and reduce anti-social behaviour. I went to a completely agreeing with Guy, some local authorities performance the other evening; it was absolutely just don’t get it and it needs I think, in some cases, fantastic and quite moving. So you need to think the introduction of people like us who could go and locally. visit and be advocates for the transformation that has happened elsewhere. They’re very willing to listen. Chair: Damian. They invited me to come and talk about what we’ve done and make suggestions about what they could do. Q107 Damian Collins: This one is primarily to The taxi driver that picked me up from the airport Gary Millar. I suppose Liverpool is fortunate that said, “Plymouth is a wonderful city but I don’t do two of your most iconic cultural attractions have culture” and I said, “Where do you live?” and he said, been provided by the private sector in the form of “I live over there”. I said, “What’s this in front of the Beatles and the football clubs. Are there any you?” and he said, “Oh, it’s the park”. “Do you go particular lessons from Liverpool about how you can into the park?” and he said, “Oh yes”. His work with the private sector to make the most of the understanding of culture was different to my money you can spend as an authority? understanding of culture or many others. He didn’t see Mr Millar: We do work with the private sector, that as cultural; he saw it as an activity. He took his hugely. The most recent example, and I’m sorry to dog out for a walk and right next to Peverell is keep coming back to the European Capital of Culture; Plymouth Argyle’s football ground. I said, “Do you the investment by the private sector was £22.4 million support football?” He said, “Oh yes”. He didn’t get spent in that year on culture. That’s a big spend; not sport as being cultural. He said, “I don’t do culture. coming from the public sector, it came from the We don’t do it. We don’t get it here”. They do get it private sector and that has continued. There are but it’s not articulated in the way that he understood relationships with both Liverpool Football Club and as a local resident in Plymouth. So I thought, “Well, the other great team, Everton Football Club who are cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 20 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Simon Eden, Mr Gary Millar and Mr Guy Nicholson slightly higher up in the league at the moment than now eight venues, soon to be nine. In fact, the largest Liverpool Football Club. investment in culture in terms of a new venue, which David Cairns: Most teams are higher up in the league is the new Museum of Liverpool, which opens next than Liverpool. year; it’s the first large sole-use museum in the Mr Millar: I couldn’t possibly comment. country being built at any time in 90 years and it’s Everton and Liverpool are delivering physical activity opening in Liverpool next year. You must come and and cultural arts projects themselves in the city. visit it. It’s the only museum designated for the history They’re doing it in conjunction with the Primary Care of Liverpool from its maritime to its waterfront to its Trust and the local authority, and also with Beatles to its music. It’s more than just the Beatles; organisations like Mersey Travel, the integrated 57 No. 1 singles have reached the charts from transport authority—delivering cultural projects Liverpool. Best in the country; I’m very proud of that. because they want more people to use their buses and their trains to go to attractions and so on. So there are Q109 Damian Collins: If the city has as many relationships that link into things like transport. They advocates as you, then I’m sure it will be in no are working now. shortage of good publicity. I think they work because it is lessons learned in terms Just one final question if I may just on the other side of working as consortia as referred to by Guy before. of the equation looking at public support? In the They were working before but they are more obvious previous session, we had the Arts Council in and I now and were more obvious in 2008. The Beatles; asked them about their relationship with local you may have seen the press this weekend. We have authorities. I think both from the submissions we a new global peace monument in Chavasse Park in received from local authorities and my own Liverpool One. It has made Liverpool the fifth most experience of the local authorities in my area, there is visited retail destination in the country in one year sometimes a frustration that when you’re talking about where it was 17th the year before. Liverpool One, the transactions between public bodies, that it’s unduly “Beatles’ Story” and the city council worked together complex and bureaucratic and I wondered what your to deliver the global peace initiative monument. That experiences were of working with the Arts Council to is going to attract many thousands of additional fund projects. visitors to the city based on peace and the heritage of Mr Eden: Can I start with a comment on how we the Beatles. So there are the Beatles, there are football work? Not in my authority on its own; we have a clubs, but there’s also the world heritage site. Very partnership of 11 authorities in South Hampshire few people talk about it but the world heritage site, which includes Winchester. A couple of years ago, our heritage, is run by Liverpool City Council in a we became what was called “a priority place” for the consortia with English Heritage. I don’t think we do cultural agencies, the cultural quangos. It was CLG, enough in that area because the world heritage site Communities and Local Government, with DCMS, isn’t promoted enough perhaps because we have just and I always get the list wrong, but certainly the Arts one conservation officer. We need more input. We Council, English Heritage, Sport England, MLA and need more partnerships with English Heritage I think one of the film bodies, maybe the one that still through that. exists, maybe not, I’m not sure, came together in a group and said, “We want to support excellence in Q108 Damian Collins: Outside of Beatles and culture and the places that recognise culture, however football, do you think, looking at the world heritage one chooses to define it, as part of the growth agenda. site and looking at galleries like the Walker, there is That’s what we’re trying to do in South Hampshire, more opportunity to bring in the private sector to integrate culture into our growth agenda.” support the public money that is spent on the arts in The fact that they came together, we became a priority Liverpool? place, meant that we had a single point of contact with Mr Millar: The Community Foundation—I don’t the agencies, a single voice we could talk to and we know if you know the Community Foundation for were able to argue the toss with them over whether a Merseyside based in Liverpool—raises lots of money particular funding scheme, a particular mechanism for communities by getting investment from the was over complicated. They became much more, private sector mainly to then donate to community almost relaxed, if you like, in their approach to how organisations including arts organisations and cultural they worked with the local authorities through and heritage organisations and that is a huge building that relationship and through coming together investment from the private sector. That is not run by as a group of cultural agencies and working with the the city council; it’s a private organisation and it runs council. So I think where you can build those sorts of very well. As I say, huge private investment. partnerships, that’s a very effective way of The private sector is constantly delivering projects overcoming those difficulties. integrating both the universities, the Liverpool I think before we had that designation, we did find it Science Park, the Liverpool Innovation Park working much more difficult to work our way through the with our cultural tsar—or is it now the innovation different types of bureaucracy and programmes and tsar—who is Phil Redmond who’s responsible for part application mechanisms for different bodies. So there of the Big Society in Liverpool. That’s the private is an answer that is in the hands of the agencies and sector that’s doing that and delivering that. local government together that is to build that sort of It’s just interesting that Phil Redmond is also the chair partnership. Where it’s done, it has been successfully. of National Museums Liverpool who is delivering a I think we’ve lost some of the constraints that used to lot of volunteering and obviously venues; I think it’s sit around cultural funding that came from the Arts cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

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12 October 2010 Mr Simon Eden, Mr Gary Millar and Mr Guy Nicholson

Council and they’re much more focusing on the has with both Liverpool and Manchester City outcomes we deliver rather than a series of output type Councils is exemplary. It’s a relationship that’s as performance measures. So it’s possible to do it, I good with the council as the council’s relationship is think. with DCMS. The Department for Culture, Media and Mr Nicholson: What is perhaps worth considering for Sport and the Arts Council significantly contributed, a moment is that I’m not wholly convinced, personally not necessarily financially but in terms of advice, speaking, about the complexity of the funding regimes resource, and so on, to the success in Liverpool of and trying to access those funding regimes as an European Capital of Culture and going forward, but organisation or an individual, for example; whether also in Manchester for things like the Manchester it’s the Arts Council or indeed anyone else. Where International Festival. They’ve done wonderful jobs. there does seem to be a great opportunity before us is Now the Arts Council, for example, also had the this idea that building upon whatever relationship it is Sustain project and that was very good during the that we have managed to achieve over the last four beginning of the recession to assist the Regularly or five years between local government and the Arts Funded Organisations in a very quick but a very Council across the regions. Going forward, there is a accountable way and heavily scrutinised, but with great opportunity before us that is more about very, very low amounts of paperwork. So it wasn’t very carefully considering how it is that, as we were unnecessarily bureaucratic because people needed saying earlier, we can not only align local political help now to get over the hurdle then to still be there and policy objectives for the arts and have a now and it’s across the North West. I cannot say responsive Arts Council that can then embrace those what’s happened elsewhere regionally but I would local objectives and pitch in all of the support that it imagine Sustain was rolled out across the entire could possibly muster alongside it, but also to think country. Great art for everyone being delivered by the perhaps some steps further, which is as much about Arts Council is a lot less bureaucratic than it may have joint monitoring, monitoring of outcomes, monitoring been two or three years ago and I think they need to of performance, audit, for example. In other words, be congratulated for that but as a local authority the the Arts Council and a local authority start to consider relationship, forgetting the fact that I am a council those very practical day-to-day things of spending member of the Arts Council North West, has been public money into a community. The relationship very good. between the Arts Council is resourced so there is the In fact, the Arts Council works with the arts’ officers means to engage with a council, with a local authority. across the North West on a weekly basis. When they It’s not that that’s not there but it now seems there is look at co-funding, they do it understanding the an opportunity. implication of what each party is doing and whether The other reason for saying that is that I’m not wholly it’s going to work and whether it’s sustainable and convinced that the private sector—and I appreciate whether it’s going to be great art for everyone; so I there are others out there who think the same— think the relationship with the Arts Council and the however it wishes to use its patronage, will finance local authorities in the North West is very good. The the arts but probably only in the great metropolis such Arts Council North West delivered funding for Lakes as Liverpool and the offer there; in Manchester and Alive and when we had the flooding in Cumbria it was the offer there; in London and the offer there; some very specific institutions. Now, that is good; that is one of the very first organisations to come forward to supportive; that’s very helpful and perhaps that can be assist with cultural and arts and heritage projects, not expanded a little. But there are many thousands of just to deliver those projects in terms of art but also people across the country who are not part of those to ensure that the hotels, the bed and breakfasts, the big organisations, who are the very heart and core of bars and the restaurants and so on, had customers. I the arts in this country. They are the ones that generate think that’s really important. the great creative products that come forward into the bigger institutions, into the bigger festivals. They are Q110 Dr Coffey: Councillor Millar and Councillor the ones that create content, in other words, and the Nicholson, I grew up in Liverpool as well so I know investment from the private sector into those the legacy that many years have generated, including particular spheres of activity at that level in our in the 1980s and 1990s when Albert Dock was communities, still remains to be proven that it could transformed and similar. To be frank, you’ve had your do that. I think we run a great risk going forward if input, whether it was cash from DCMS for ECA, we think that private sector sponsorship would bring which it wasn’t; it was resource, but it is still money that about. I am not so sure that it will, but I remain that’s being used. Is it time to say, “Well, Liverpool, to be proven wrong, of course. you have to go on your own way with less now from Mr Millar: Can I add? There are two things that came the centre” and that we should be focusing on those out of this. The first was your question about the Arts other regions that don’t seem to have had perhaps the Council. I should declare an interest. I am a member same prominence—so it is an element, I would of Arts Council North West, so I have an suggest to you perhaps, of pump-priming—or do you understanding of some of what it does as a council, think that is unfair on an organisation that has been not necessarily when it gets down to what the successful? individual officers are doing on a day-to-day basis. I I am happy to hear from either because I can give you think the Arts Council does an amazing job. I have to another example of Basingstoke. For example, say that and not because I’m on the council but Basingstoke 30 to 40 years ago invested itself in because the relationship that Arts Council North West building a magnificent centre called the Anvil Theatre, cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

Ev 22 Culture, Media and Sport Committee: Evidence

12 October 2010 Mr Simon Eden, Mr Gary Millar and Mr Guy Nicholson deliberately because it knew it would attract in high- just within its main campus in Covent Garden, but its quality businesses. That’s exactly what happened and relationship with local government in Thurrock and they pulled in multi-nationals to make it a nice place the new National Skills Academy, and the new to live and work. So I am interested to say, “You’ve Production Park that the Royal Opera House has had your pump-priming. Can’t we now give it to brought forward in that particular borough just to the somebody else?” east of London, and when you look at the Royal Opera Mr Millar: With respect, if I can just answer that— House and the discussions that the two chief you’re from Liverpool? executives are having, the Royal Opera House and Dr Coffey: That is where I grew up, yes. Manchester City Council, about taking the Royal Mr Millar: Yes. I actually disagree. You know the Opera House to Manchester and a new home for opera Albert Dock and everyone knows the Albert Dock; and ballet in the north, that to me is a good everyone knows the Pier Head. Dr Coffey: I know Sudley Gallery; I know other investment. places. If perhaps we had just done a pump- priming into that Mr Millar: But then there’s Kirkdale, the Dingle, organisation, the Royal Opera House, then I’m not Anfield, Everton; there’s North Liverpool. We’ve had quite certain how that kind of expansion into pump-priming and it has had a huge impact on the communities as diverse as Thurrock and East London city centre leading out towards the M62 but not quite and Manchester in the North West—that kind of as far as the M62 and that’s been wonderful. £2 billion investment, those kinds of conversations, that kind of has come to Liverpool through Objective 1 and expansion of great art for everybody—those cultural Objective 2 funding—wonderful and it’s only the opportunities could ever come about. And when you start. We cannot forget the communities outside of the link that through very clearly to the National Skills city centre and they need concentration. They need Academy and the entire thing around skills more Preventative Agenda, more culture, more art, development, employment and the future prosperity more heritage, more infrastructure, more regeneration. and well-being of the cultural economy itself in this Because we can’t ignore the many thousands of country and the contribution it makes back to the people, 42% in North Liverpool, who are workless, Exchequer each year as a result of its successful who don’t have a job, and it’s really important that we operations both here and abroad, then to me we must create the infrastructure outside of the city centre to make sure that Liverpool and Manchester and consider very carefully this idea about, “Okay, if we Newcastle and Sheffield and Bristol and Birmingham say pump-priming, what is the project? What is it and all the great cities in this country—and they’re all we’re talking about? What do we mean by pump- great cities—are transformed using the legacy and the priming? Are we talking about capital and revenue or lessons learned from the Albert Dock and the City just revenue or just capital?” It’s a very delicate Centre of Liverpool or in Manchester because there’s balance. Success breeds success, I think, and we must a lot more to do. We haven’t finished yet and we can’t never lose sight of that. forget our residents by ignoring those what some people call “disadvantaged”, some people call Q111 Dr Coffey: I recognise that, by the way. It’s “deprived” communities. They are as equally just Arts Council England are going to be setting their important as the 20,000 residents that live in criteria and they haven’t said what it is going to be. Liverpool city centre because there’s another 430,000 currently living in other parts of the city that need as I’m slightly disappointed that you say you’ve had all much pump-priming as the city centre has had. this money for the European Capital of Culture and Mr Nicholson: Chair, I wonder if I could just come you failed to reach 42% of your residents; so that’s in on that. I think first of all, I would suggest that we slightly disappointing. I am concerned for the Shires, perhaps look at capital and revenue. And what is the as it were, outside the metropolises and how we make purpose of capital? Capital is a one-off, it’s a pump- sure that—of course, I want to see a fantastic regional primer perhaps, and that is perhaps something that has arts presence but also I’m keen that my arts’ festivals been going on over the last 10 to 15 years in terms of keep going, thanks to voluntary effort, but we make capital investment into the infrastructure, the sure we get to those other hard-to-reach places. buildings, and the very fabric that supports the arts Mr Nicholson: Yes. Sorry, Chair, if I may; that is well across the land. Then there’s the revenue bit and the said. Where it is that we’ve just come out of in East revenue bit is somewhat challenging. If perhaps you and South East London over the course of the were considering the idea that revenue and capital are mid-summer months; the new international festival for one and you use it as a pump-prime and then pull the arts called Create, we’ve used that very back from a project once you have built it out and deliberately around the 2012 catalyst as I touched you’ve set it off in motion, leaving it unsupported, un- invested, then I would seriously consider, are we using upon earlier. What was interesting about that was that our assets and our institutional structures to the best we’ve gone into some of the communities that show that we could use them for? the lowest levels in the United Kingdom in terms of If I may just use an example; we have the Royal cultural participation as far as residents are concerned Opera House receiving considerable sums of public and we are gradually, over the course of time, money each year. Some people feel that this is over reversing that outcome, that statistic. What has been the top; it is too much money. But when you look at quite heartening to see is that—and if I may just revert what it is that the Royal Opera House is doing, not back to the private sector—the private sector are cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG01 Source: /MILES/PKU/INPUT/005777/005777_o001_kathy_HC 464-i corrected.xml

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12 October 2010 Mr Simon Eden, Mr Gary Millar and Mr Guy Nicholson investing into this as much as the public sector and a Q112 Dr Coffey: County? very eclectic group of organisations and institutions Mr Eden: County perhaps but not necessarily. If you and the investment brought about participation levels think around areas that work for communities, they of around 900,000 people in that part of London over are very rarely areas that are also defined by local the course of the summer. It reflected an investment government administrative boundaries. We tend to that was touching £1.5 million in addition to what it work in South Hampshire, along that south coastal was that was already being invested into in those strip. Basingstoke tends to look to the Thames Valley communities through the arts and cultural scene. and work with colleagues in the Thames Valley, across Now, to try and take that model and that approach into county; across all sorts of boundaries. those communities, the rural communities that Simon The answer for us is to get our act together and make was touching on—into those provincial towns, for a case for strategic investment by bodies like the Arts example, those market towns and spaces—to me is a Council where that can stimulate the growth of great challenge going forward. I completely agree that partnerships, the bringing in of private sector money, it’s unclear as to how we can bring that about. What as we’ve seen for example in a couple of projects in is it that can do that? Perhaps it is, as Gary was saying, Portsmouth that we’re working on or quite separately more to do with peer mentoring and just ensuring that in more rural projects. It’s for the shires to get their through the Arts Council, through the local act together and argue their case for our own take on government family, that we can bring that peer culture and how we can work together and what our mentoring, that practical support to bear and that particular needs are, which are going to be different practical experience too; but to disseminate out now from Liverpool’s or Hackney’s or wherever else. from the centres and recognise that capital isn’t Mr Millar: Chair, can I add an interesting fact? perhaps something we are going to have the luxury of Chair: A last thought, yes. for the years ahead. Revenue, we might be able to Mr Millar: Interesting fact; local authorities spend hold that line and that’s the crucial thing, joining in, more on arts and heritage than the Arts Council of and if we can bring that about, that’s the point of the England, if you exclude the lottery. £1 billion a year whole thing. is spent by the local authorities, safely, sustainable and Mr Eden: Chair, if I can add to that; as Chief accountable, year after year. That’s supporting the Executive for one of the arguably greater cities, theatres obviously; heritage participation, health and second only to London, an ancient capital of England, well-being consortium and whatever. I think if I could there are different sets of issues and we will look stress anything, I think it is, going forward, for a jealously in the shires from time to time at the big mixture of, as we’ve discussed before, private sector, funding going to London institutions, to cities like public sector, consortia delivered, volunteering and Liverpool and so on and so forth. The answer for us I philanthropy. Not every business can do all this but think is to get our act together. It’s not realistic to some can get involved. I think there is a need to look assume that similar amounts of funding are going to at place-based budgeting, allow the councils to spend come into Winchester or Basingstoke or Uttlesford or the money on what they see as fit for their area, places like that. And Uttlesford is near Saffron whether it be rural or whether it be urban. They have Walden, for those of you who don’t know; perhaps made the choices in the past. They’ve done it with £1 it’s one of these made up names, I think. What we billion a year in their expenditure and they can be need to do is get our act together as groups of local trusted to do that and that’s one of the messages I authorities with a common—I cannot use the phrase would like to get across today. “sub-regional” anymore, so whatever I think replaces Chair: That’s very helpful. Thank you, all three of that. you, for your patience in waiting and for your efforts. cobber Pack: U PL: COE1 [SE] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Ev 24 Culture, Media and Sport Committee: Evidence

Tuesday 19 October 2010

Members present: Mr John Whittingdale (Chair)

Ms Louise Bagshawe Paul Farrelly David Cairns Alan Keen Dr Thérèse Coffey Mr Adrian Sanders Damian Collins Jim Sheridan ______

Examination of Witnesses

Witnesses: Mr Tim Bevan, Chair, UK Film Council, Ms Amanda Nevill, Director, British Film Institute (BFI), and Mr David Elstein, Member of the British Screen Advisory Council (BSAC), gave evidence.

Q113 Chair: Good morning. This is the second into the wider creative industries, not just in London session of the Committee’s inquiry into funding of the but out across the regions as well. arts and heritage, and in the first half of this morning’s Mr Elstein: I think, Mr Sanders, you have to sitting, we are going to be looking at support for the differentiate between the different types of support UK film industry. May I welcome Tim Bevan, the that the UK film industry gets. By far the biggest is Chairman of the UK Film Council, Amanda Nevill, the tax credit, which is worth over £100 million a Director of the British Film Institute, and David year, and the truth of the matter is if the UK did not Elstein who is wearing his hat as a member of the have a tax credit system, we would not have a British Screen Advisory Council this morning—I functioning meaningful film industry at all because think it is one of many. this is an internationally competitive environment in Mr Elstein: That’s right. I’m not here in my role as which Australia, Canada, individual states in the US— former chairman. I’m here as chairman of the working and indeed in Australia—have incentives to induce party that wrote a report on post-UK Film Council inward investment. The great majority of the money policy. spent on film in this country is inward investment and, Chair: Very good. Adrian Sanders is going to start. therefore, if we want the infrastructure—studios, technicians, crafts people, post-production—and all Q114 Mr Sanders: Good morning. Is the British film that goes with it, in a sense you have to put that industry good value for money? money down in order to get the £1 billion in. Over Mr Bevan: So a general question? Undoubtedly it is, and above that, there is about £15 million a year of yes. Yes, it is very good value for money. It is a Lottery funds that goes into individual films, and that business that generates £1 billion-worth of inward is designed to support not the big studio pictures, but investment a year, which is a healthy return to the the UK independent producers, and to help them in Exchequer. terms of matching up to an international industry. The thing about the film industry is, in production That’s partly a commercial strategy and partly a terms, it’s divided into two distinct arenas. One is cultural strategy. inward investment, which is bringing big studio On top of that roughly £15 million, there’s currently pictures into the country, which tend to be backed by about £25 million to £27 million that is invested by Hollywood majors and are a big employer—“Harry our publicly-owned broadcasters: the BBC and Potter” and “Sherlock Holmes” are prime examples of Channel 4—Channel 4 through its very famous Film that. Then the other half of the production business is Four subsidiary. They do that, I guess to some extent, domestic British production. In that, we punch a little for political reasons but primarily for creative reasons. bit above our weight, I think, in terms of a world film It’s part of their remit. It’s written into Channel 4 as producer in that we have delivered, as it were, to the a stated requirement. It’s not in the BBC charter. I world film industry probably more writers, directors, think they feel pretty good about the investment they actors and producers than other countries of a similar put in and the return they make. The truth of the size. That has quite a lot to do with the fact that we matter is that, if you look at the Lottery funds share the same language as America. historically, over more than two decades now—and if you look at how the BBC and Channel 4 invest—on Q115 Mr Sanders: Is there anything that either of the whole in commercial terms you get back on you want to add to that? average only about 50% of your investment. So the Ms Nevill: I do. I’d just add that I think there is also other 50% is what you might call a cultural a lot of peripheral benefit to the country as well as the commitment and an infrastructure commitment, but hard industry edge that Tim talked about, which is the on balance I share Tim and Amanda’s view. I can’t way in which it promotes Britain as a place to come compare it with the widgets industry but, in terms of to—the tourism benefits. I also think that filming is a the outcomes proportionate to the inputs, it is a good great way to spread the economic benefit across the outcome. country. I think one of the benefits of the past 10 years, in particular, has been, because of the way the Q116 Mr Sanders: There is a difficulty in persuading funding has been delivered, we have seen actual the public, when we are going to be announcing lots production and greater film activity, and the crossover of cuts, that there should be a public subsidy for such cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

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19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein a commercially successful industry. Do you not think Mr Bevan: Well, the public subsidy is creating the that you ought to be able to put your finger on some future Ridley Scott. facts and figures that would help you to help us to Ms Nevill: Which it did. persuade the Government that you should continue to Mr Bevan: Which it did. get a public subsidy? Ms Nevill: It’s very interesting because it was public Mr Bevan: The £1 billion of inward investment is a money. It is a long game, if you like, and you are figure and a fact. absolutely right. In terms of investing in emerging artists—whether you’re talking about emerging Q117 Mr Sanders: The fact is you are getting that. painters or emerging filmmakers—there isn’t any level What you don’t know is whether that would come if of certainty as to which ones are going to hit gold and there wasn’t a public subsidy. going to develop into the sorts of filmmakers that are Mr Bevan: It undoubtedly wouldn’t because, as David going to make a really positive and valuable Elstein said, this is an international business and there contribution economically. But the record is that the are individual states around America, a number of public subsidy is really, really important, so whether countries in Europe and a number of countries around it’s Ridley Scott or whether it’s some bits of money the world that offer up tax incentives—which, on the that went to John Lasseter or whether it’s money that whole, are more competitive than the UK one—for went to—help me out here! films to go and shoot in their particular state or Mr Bevan: Working Title, my own company. Without country. public subsidy in the 1980s on our early movies, we would never have got started with the bunch of Q118 Chair: Just before we leave that, the tax credit filmmakers that we’ve gone on to have a 25-year is not under threat by the Government. career with, basically. So arguably Richard Curtis—a household name who made “Four Weddings” with Mr Bevan: It’s not under threat, no. us—would not have got started. And we received public subsidy from, in those days, British Screen, Q119 Chair: So the question is really would the £1 from the broadcasters and all the rest of it, and that billion be coming anyway if the UK Film Council got our business started and we’ve subsequently wasn’t there, not if the tax credit wasn’t there. existed for 25 years and made 100 movies. Mr Bevan: You have to look at it in a circle basically. Mr Elstein: And if you track back even further to The £15 million of Lottery money that is spent on the funding for, say, the National Film and Television film production—which is not taxpayers’ money, it’s School (NFTS), the £1 or 2 million a year have to put Lottery money—that the Film Council has into that generates a fantastic flow of talent, from Nick administered on the whole goes to first and second- Park and “Wallace and Gromit” onwards, who make time filmmakers. So it’s investing in the future of a huge contribution to UK culture and, in due course, films to a large extent. It is also investing in our to UK commerce. Now, obviously, as Tim says, culture and there is a balance there. So you back people are people and half the best cinematographers filmmakers like Ken Loach or Stephen Frears and in Hollywood are NFTS-trained and ply their very people like that who people feel have a cultural value lucrative trade in Hollywood these days. to the country and, also and more importantly, you But what we also find is that outstanding talents back first and second-time filmmakers—people like emerge from a school like that, make their first three Danny Boyle; people like Paul Greengrass—who then or four films in the UK, and help to build a film go on to produce bigger films and bring in that inward culture to which other aspiring filmmakers can hope investment. With Paul Greengrass, we backed to follow. And, in general, what you have to do in a “Bloody Sunday” at the Film Council and on the basis situation like this is say, “Are we in this business or of that he was given the two Bourne pictures that not? What is the best value for money we can get, came and shot inside the UK and qualified and bought given all the other constraints that apply to the film in, between them, $600 million of inward investment. industry?”, and then you step another step back. As So I think that is a pretty good return. It is a people the Chair has said, the tax credit is not under threat business. but at some point you do have to ask yourself, “Is that tax credit good value for money as well?” However, I Q120 Mr Sanders: A people business. Explain what guess that’s not the subject of today’s proceedings. you mean by a people business. Mr Bevan: On the other area of public subsidy, the Mr Bevan: It’s a people business in that it is all about Film Council, for instance, has invested in training to the people who are directors, writers, producers and quite a high extent over the last decade—several actors, and it’s a strange business because a massive million pounds a year—which is very important for financial decision can be made on the basis of a the inward investment. For the studios to come here person. If Ridley Scott, to pluck a name, decides that to make movies, it is essential that we have the depth he wants to make “Robin Hood” and he wants to make of technical expertise across all the jobs in the film it in the UK, as a result of that a studio will spend industry, basically. $250 million on the movie in the UK. So it’s a very odd business. Q122 Ms Bagshawe: Just as a supplementary to that. I hear what you say but, as you rightly say, it’s a Q121 Mr Sanders: What’s the connection with people business. Is it not true that apart from a good public subsidy there? You are saying if somebody who tax credit situation that keeps us financially is a known person— competitive, what the UK has that other countries cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Ev 26 Culture, Media and Sport Committee: Evidence

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein don’t necessarily have is a huge depth of technical out to another Lottery administrator. Prior to the expertise? If there is a Hollywood production closure of the Film Council, we’d been through a company, they know they have the crew to shoot it spending review, because of the reduction in Lottery properly, they have the sound stages and they have funds, and reduced the budget by £25 million over everything set up. But that level of crewing and three years. We were on our way to see the Secretary technical expertise is not necessarily available in other of State about further reductions when we were countries in Europe, even if they have more broadsided by this announcement. competitive tax credit positions. The thing about the Film Council is that there are Mr Bevan: One needs to be very careful. Absolutely, obvious areas of expenditure, but then there are also the British technician is brilliant, but they will areas that nobody really knows about, which are about migrate. If the tax credit ceased here and existed in expertise, and I take two examples of this. One was Hungary—to pluck a country where there is a very in the mid-2000s when the tax credit didn’t exist. It competitive tax credit—the crews will migrate with it, was a system of sale and lease-back and various so one wants to be very careful to keep the investment fiddles, basically, and the Film Council rallied all the in England. troops and, with the Labour Administration at the time, got rid of that and put in a totally transparent Q123 Ms Bagshawe: Just to repeat, I don’t think the tax credit system that works extremely well. One of tax credit is at all under threat and indeed subsidy to the proposals around at the moment—the Matthew film is not under threat. When we’re looking at the Vaughn proposal—would have us go back a little bit specific way in which subsidy to film is delivered, I towards that system of the past, which I think would don’t think we can overlook the fact that the UK be an absolute disaster. Any mucking around with the offers massive competitive advantages to major tax credit is not a good idea. But the leadership that Hollywood studios that other European countries the Film Council provided there arguably saved the simply can’t match. taxpayer hundreds of millions of pounds. Mr Bevan: Yes. One of the many non-public things Another very important area that affects all of our that the Film Council has done is it’s helped that a lot. lives at the moment is piracy in the digital age. It It has people soliciting the studios to come here, and affects broadcasting, it affects film—it affects all of helping them find locations and all the rest of it, and arts basically. And, again, the Film Council has done that’s not one of the high-profile things that the Film an enormous amount of work in terms of campaigning Council does. and bringing awareness to the public, along with the There was an excellent article by David Puttnam in other creative sectors, to try and battle this piracy the New Statesman recently about how the Film issue. Those are two things that have not received a Council evolved over many years, basically. A decade lot of publicity at all but have been very beneficial. ago, when the Film Council was formed, it brought all of these things together and it created joined-up Q125 Jim Sheridan: So the Government were thinking. The great danger of the Film Council being unaware of the savings before they made the closed down and these various activities being put out announcement? to disparate bodies is that that joined-up thinking goes Mr Bevan: We didn’t get to go and talk about the— away, and that would be a majorly regressive step for film in Britain, and I think that, frankly, the closing Q126 Jim Sheridan: And has there been any down of the Film Council—as I said when it happened change since? and was broadsided by it—was a very bad idea and Mr Bevan: No, because we’re dealing with a body nothing that has happened in the couple of months that’s been closed down, so basically the dialogue that subsequent to it being closed down has led me to has been going on is where these funds will be—we’re believe anything different. I think we’re in danger of still a Lottery administrator at the moment. losing joined-up thinking. I do not think any money is going to be saved by the closure of it and it is a Q127 Jim Sheridan: So why then did you feel it regressive step for film. necessary to engage a public affairs company? How Ms Bagshawe: Okay, thank you. much did that cost? Mr Bevan: The PR company? It cost, I think, Q124 Jim Sheridan: Notwithstanding the millions of £50,000.3 Basically, I was broadsided by Ed Vaizey pounds generated by the industry, the bureaucratic and at midnight on a Friday to be told that the administration costs were a significant factor in the announcement was going to take place on the Monday Government’s announcement to abolish the Council. that the Film Council was going to be closed down. I If indeed that is the case, have you made any attempt said, “You can do what you want because you’re the whatsoever, either prior to the announcement or since Minister in charge of this but let me tell you, we may the announcement, to reduce those costs? be a minnow of an industry but we pack a lot of punch Mr Bevan: Yes, absolutely. One of the important in our PR.”, andone of the reasons why people tend things about the Film Council is that it is a Lottery to a little wary of the film business is that it gets page administrator. So, of the 701 people who work there, 3 all the time because most editors are pretty lazy. If 35 are involved in the legalities of it being a Lottery they can put a picture of Keira Knightley in the paper, administrator,2 and we were looking at putting that they’ll put a picture of Keira Knightley in the paper, and if the story running underneath it is the closure 1 Witness correction: 73 people who currently work there. of the Film Council, that’s what will happen. That 2 Note by witness: Roughly a third are wholly involved in the legalities of it being a lottery administrator. 3 Witness correction: £60,000. cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 27

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein happened, and it swamped the small PR-side of the industry was easy, we would all be millionaires, but Film Council, so we had to take on an external agency as we’re using public resources, I think it is right that to help deal with the volume. we question this. A few years ago there were a couple of notable flops Q128 Jim Sheridan: Has that proved valuable? Has in terms of investment, particularly “The Republic of it achieved better— Love”, in which we had an investment of £1 million Mr Bevan: To get through the work, no. and didn’t receive any box office returns, and a film called “The Proposition”, which did receive about £1 Q129 Jim Sheridan: So you have wasted— million of box office returns but after a £4 million Mr Bevan: Well, no, not at all. The assurance I was investment by the Film Council. Now, after something asked for by the Secretary of State then was to stop like that, what do you do to look at how those the tide of bad press that was going on. That was the decisions were taken and whether that was a good first conversation I had with Jeremy Hunt and I said level of investment? I’d do my best, and part of that was to bring on an Mr Bevan: I don’t do anything because I’m Chairman agency to help us. of the Film Council, but there are people whom we employ to do that. Basically, when assessing any Q130 Chair: The agency launched the “Save the UK investment, be it for a script, a production or anything, Film Council”, didn’t it? first and foremost there is a creative assessment as to Mr Bevan: No, it didn’t. whether the script is any good or the film is any good or not. Once you’ve got through that hurdle, which is Q131 Chair: It didn’t? the big hurdle by the way and takes 95% of Mr Bevan: No. everybody’s time, it is then looking at the financial criteria that surround that investment. In terms of Q132 Chair: So it was simply helping you respond script development, obviously, the Film Council tends to press inquiries? to 100% finance that, but when it comes to production, Mr Bevan: Yes. it is looking at the various partners that there might be and whether that makes sense or not. I think the Q133 Chair: You didn’t spend any public money on Film Council’s run, if you look at it globally, has been trying to make the case for your own survival? pretty good, in actual fact. You’re always going to Mr Bevan: No. There was one thing that we were have your hits, as you rightly say, and you’re always asked was to not deal with. The one thing I was going to have your misses. Like anything, when you 4 asked—the only thing I was asked—was not to talk have a miss you try and learn from it. to the press, and it’s something that I’ve adhered to. Q139 Damian Collins: There was a film in 2007 Q134 Chair: Because the Secretary of State told us called “Faintheart”, which I have not seen but I am that you had hired a lobbying campaign to make the told is a romantic comedy set in the world of battle case. re-enactments. That had a grant of £400,000 and then Mr Bevan: Yes, which is untrue. sadly no cinema release. So do you— Mr Bevan: That happens. If you look at Working Q135 Jim Sheridan: Can I just finish, John? Title, which is the only other example that I happen You also have an office in Los Angeles? to know the numbers on, of the 100 movies that we’ve Mr Bevan: Yes, that is very important. made over 25 years, probably six or seven of them have not had theatrical release because they’ve been Q136 Jim Sheridan: How does that generate wealth total dogs. We’re pretty good at burying that. As a or business? public body, it’s a more difficult thing to do and, in 5 Mr Bevan: Basically, as I’ve said before, a lot of the actual fact, I believe of the 170 feature films that 6 inward investment comes from the six studios in Los the Film Council has invested in, only eight have Angeles. Persuading Warner Brothers, Disney, not received a theatrical release in the UK. I would Universal, Paramount, Sony or Fox to come and bring say that’s an extremely good record. their productions to the UK is a very important thing. So, having a small office that is in LA persuading Q140 Damian Collins: There is a film called “White those people to do this and setting up location reccies Lightnin’” of the same year, which produced box and all the rest of it is a pretty good return for money, office sales of only £773 after a grant of £600,000. I think. So, I suppose there are probably a few in the lower grossing end, even if, technically speaking, somebody Q137 Jim Sheridan: Just finally, in terms of cost did go and see them. again, could you tell us just how many people that are Mr Bevan: I think you also have to bear in mind that on the Film Council earn in excess of £100,000? part of the investment strategy of the Film Council is Mr Bevan: Six. to bring on new talent and if people hadn’t taken risks Jim Sheridan: Six? on me as a young person—and I lost them some Mr Bevan: Yes. money along the way—I wouldn’t be where I am now. 4 Note by witness: The UK Film Council invested a total of Q138 Damian Collins: I would just like to ask about £2.159m in The Proposition. how the UK Film Council assesses the value of its 5 Witness correction: 215 feature films. investments. Obviously, if picking winners in the film 6 Witness correction: Six. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Ev 28 Culture, Media and Sport Committee: Evidence

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein

I think that part of the Film Council’s responsibility is providing that that the tax credit stays intact, which to ensure that we have future directors, writers, I’ve been assured it will, I think that British film is in producers and actors. quite good shape. It brings pleasure to people, which is our job as cultural folk.8 Q141 Damian Collins: I am just looking at the accounts published for the Film Council, and Q145 Chair: So, if you’ve been assured of those particularly accounts relating to John Woodward’s things and the British film industry is in such good expenses. What sort of policy do you have in place shape, why is the abolition of the UK Film Council for entertaining and hospitality for executives at the such a disaster? Film Council? Mr Bevan: Because I think that the joined-up thinking Mr Bevan: What is the policy? that’s gone on is under threat. There are two different Damian Collins: Yes. The reason I— things. I was asked whether the film industry is in Mr Bevan: Well, I think the thing is this. John has good shape. Well, creatively, the answer would be yes. been running a big organisation. I sign off on his Commercially, because of recent events, there is a expenses. It’s the only thing I do sign off in terms of question mark over it. However, I have been assured expenditure, and if I think that they’re justified, I do that the Lottery funding going into movies will remain it. He has to cover a lot of ground. Conversely, I think, intact and that the tax credit will remain intact—they at the Film Council, you have a board of 12 people,7 are the two bedrocks. I would hope that they remain all of whom do it for nothing. None of them claim intact and are administered through the same body, any expenses unless they have had to fly in from but that’s down to those who make these decisions, Ireland and all the rest of it, so I think, on balance, not me. the Film Council does pretty well—the public does pretty well. Q146 Chair: But if we simply find a more efficient way to distribute that money without the huge Q142 Damian Collins: The reason I ask about overheads of the UK Film Council, there shouldn’t be policy, because I’m not complaining about the chief a problem? executive taking people out for lunch, even if it’s for Mr Bevan: Yes, but the Film Council does not have public bodies, but for the last accounting period I huge overheads. If there’s a more efficient— think he spent about £6,500 that is attributed to hospitality. There are about 70 or so lunches and Q147 Chair: 25% is quite huge. dinners as part of that. About a third of the people he Mr Bevan: Sorry? took out are people from other public bodies, Chair: 25% is quite huge. including Dawn Primarolo when she was Minister for Mr Bevan: It’s not 25%; it’s 10%. Over half of that the Treasury. I just question that—this is public is due to it being a Lottery dispenser. money. Mr Bevan: I don’t know how they split money, these Q148 Paul Farrelly: You just said, Tim, that you public bodies. If you’re taking somebody out from a were called, or you knew on the Friday night before public body, I don’t know how that works. the Sunday that you were going to be abolished. That seems to me quite an extraordinary way to go about Q143 Damian Collins: I just wondered whether you handling the future governance and stewardship of a had a policy about that. With the chief executive of very important industry. the Film Council, given he is giving money to people, Mr Bevan: I would agree. I was surprised not to have I thought people would be taking him out for lunch. had a conversation beforehand. Mr Bevan: No, but also one of his main jobs was the interface between the film industry and the Q149 Paul Farrelly: Can you just tell us which new administration, and I think that he did brilliantly in Ministers in the DCMS—because you’ve said there that and nobody else could have done it. If that was no consultation—you would single out as requires lunches here and there, I would say that’s a knowing a great deal, or even a little, about the film price worth paying for the film industry. industry and its dynamics? Mr Bevan: I think Ed Vaizey has been an excellent Q144 Damian Collins: Just one final question in Minister because in opposition he chose to educate global terms. Looking at the top 10 grossing UK films himself hugely about the arts, hoping to get, I of all time—independent films—there are two that imagine, the job when and if the Government were were funded by the Arts Council and that’s a great elected, and he’s continued to do so. I don’t know success. Eight weren’t. Do you think that we need to Jeremy Hunt as well as I know Ed. be unduly pessimistic about the future of the British film industry? Q150 Paul Farrelly: So would you say Ed has Mr Bevan: No, I think right now we’re in pretty good consulted with himself, then? shape, to be quite honest. I think we have an exceptional bunch of young actors and an exceptional Mr Bevan: He’s consulting a lot of people. He was bunch of new and interesting directors. I think we’re the bearer of the tidings. I don’t know whether he fired in turbulent times, which tends to chuck up decent the bullet or not. writers. Providing the Lottery money stays intact for 8 Note by witness: In fact, three of the top ten independent UK film production, which I’ve been assured it will, and films at the UK box office (St Trinian’s at No.4, Gosford Park at No.5 and Bend it Like Beckham at No.6) were funded by 7 Witness correction: 15 people. the UK Film Council (not the Arts Council). cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 29

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein

Q151 Paul Farrelly: Do you think it might have Just a final question: for every pound invested by the been done for effect? They knew that the luvvies UK taxpayer through the Film Council, less 10% or would shout—and shout loudest—and that therefore, even 25% for admin, what would you reckon would in a perverse way, it was a great way for them to get be the net benefit to the UK film industry through the a message out that everyone was sharing the pain? existence of the Film Council? Mr Bevan: I’d like to think that, but—do you know Mr Bevan: To the business as a whole? About a fiver. what?—I don’t believe it. I don’t think any great thought had gone into it at all. And I suspect had they Q158 Paul Farrelly: So £5 for every pound? known how loud the luvvies were going to shout they Mr Bevan: Yes, if you look at the businesses.9 The wouldn’t have done it. Actually, we’re not luvvies. industry as a whole turns over £5 billion or £6 You might be a luvvie but I’m not a luvvie. billion10—and I think that’s across all its parts—and it returns about £1 billion to the Exchequer.11 Q152 Paul Farrelly: It was affectionate, not pejorative. Q159 Paul Farrelly: My final, final question, Chair. In the statements, Jeremy Hunt said that with the Can I then ask you, given the way this has been abolition of the UK Film Council, “a direct and less handled, what do Ed Vaizey and Jeremy Hunt know bureaucratic relationship with the British Film about the film industry that you, Nick Park and Clint Institute would be established”. Presumably, therefore, Eastwood don’t? if this decision has been well thought out, there is a Mr Bevan: Well, Ed is probably learning pretty succession plan and you will have seen the paper and quickly, but I’ve spent 25 years in it, Nick’s spent 25 the mechanisms by which the transition will be years, and Clint, goodness knows how long he’s spent managed. Is that the case? in it—a great deal longer. So, put it like this: Mr Bevan: It’s not, but Amanda could speak better to collectively, Clint, Nick Park and I probably have the direct relationship with BFI than I could. about 100 years’ experience in the film industry, and Ms Nevill: The announcement was as big a surprise Ed Vaizey has two. for us as it was for the Film Council. Q160 Chair: But it would probably be fair to say that Q153 Paul Farrelly: So you have not seen the Clint Eastwood’s knowledge of the intricacies of film mechanisms? You have not seen the future business funding in the United Kingdom is not huge? plan, the succession plan and the transition plan? Mr Bevan: Yes, fairly scarce. I think that would be Ms Nevill: No. I think it was a statement of intent fair. rather than a statement that had anything behind it. Q161 Chair: So Clint Eastwood was wheeled in as a Q154 Paul Farrelly: The Government seem to have sort of profile name that would get page 3 of the shifted their position now on the bonfire of the papers, but he doesn’t have great expertise? quangos, in that they say it is being done to improve Mr Bevan: Yes, but that’s what we do. If you can’t accountability, not necessarily to save money. I saw a get Keira, get Clint. Guardian request under Freedom of Information about the costs of winding up the Film Council. It’s not, Q162 Ms Bagshawe: Mr Bevan, forgive me, but I sadly, in my press clippings or in my briefing here was a little perplexed by your answer to Jim Sheridan but, as I remember it, the figure was more than £11 on the whole PR issue, because I remembered a quote million. and through the magic of Google I have drawn it up Mr Bevan: I believe it is, yes. I’m not exactly sure of here, so I wonder if you could comment. You’ve just the number. told us that a PR firm was not specifically hired to make the case for the Film Council and your spin Q155 Paul Farrelly: Can you tell us over what time doctor—it says here, without naming him—said, “The period and what time scale the abolition or winding future of the UK film industry is the only thing the up—or whichever word you use—of the Film Council UK Film Council is interested in”. Unfortunately PR will take place and how much it will cost? Week had gone to press and it carries a quote from Mr Bevan: We were told when they told us they were Oliver Rawlins, whom I believe was the UK Film going to abolish the Film Council that it was 15 Council’s Head of PR. He said that the body had been months. I think, practically, once it is decided—it handling a comms strategy relying on third-party doesn’t seem to have been decided yet—where the advocacy and that “We’ve ensured that the message various activities of the Film Council may lie in the has been simple, clear and consistent: this is a terrible future, that process will then be speeded up. decision that disregards the commercial benefits of the UK Film Council”. That does seem to me to be Q156 Paul Farrelly: Can you let us have a reasonably open and shut—that’s why a third-party breakdown of that figure? PR guy was hired. Mr Bevan: Yes, I can. I would have to send it in. Mr Bevan: That’s based on a press statement we made on the day that it happened, basically. Q157 Paul Farrelly: Absolutely, in a follow-up. A 9 Note by witness: The Oxford Economics report into the breakdown of your accounts would also be useful just Economic Impact of the UK Film Industry, June 2010. so that we can look at some precise figures and what 10 Witness correction: £6.8 billion you say is attributable to the Lottery side of the 11 Witness correction: It returns more than £1.2 billion to the activity, which is half your headcount. Exchequer. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Ev 30 Culture, Media and Sport Committee: Evidence

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein

Q163 Ms Bagshawe: No, the press statement you cake. If, as I’d hope, the administration for Lottery- made on the day that it happened was that you were funded movies and the tax credit remains intact in one only interested in the “future of the UK film industry”, place, I would hope that the people who are working whereas the argument here is that public funds were in that arena within the Film Council at the moment spent on advocating for yourself as a body, and he are moved over to whatever body administrates that, does specifically say that you employed a third-party so I don’t see huge savings there. With the 11 million comms strategy because the decision “disregards the quid over five years, it will probably be awash, I have commercial benefits of the UK Film Council”. So you to say. did in fact spend PR money on batting for yourselves, did you not? Q167 Alan Keen: What are the disadvantages? Mr Bevan: I beg to differ. I don’t think that’s what Mr Bevan: My primary concern would be that the we did. various activities of the Film Council are put out to too many different places so that you don’t have Q164 Ms Bagshawe: You are differing then with joined-up thinking going on in terms of a commercial Oliver Rawlins, your own head of communications? film strategy in the UK. Mr Bevan: Yes. Ms Nevill: Just a point of clarification. Tim mentioned that the grant-in-aid money to BFI would remain Q165 Ms Bagshawe: I would humbly suggest that intact. I don’t think it will because, like everybody there is a slight disconnect there between yourself as else, obviously we’ve been asked to model 25% cuts. Chairman of the UK Film Council and your own Head So in the context of the cuts, we will still get some of Communications. grant-in-aid but it is going to be—we imagine after tomorrow—very significantly reduced. Mr Bevan: Listen, I was very clear about the strategy and that was the strategy that was adopted. I made an assurance to the Secretary of State, which he chose Q168 Alan Keen: In answer to an earlier question, not to believe by the way, and he was the one who you said that it’s a people business. What you’re really counter-briefed against me. But I was absolutely saying is that the contacts that bring the business to 100% clear with everybody that there was to be no the UK will not be handled as well by people who are offensive press strategy—fair enough to have a not the right people. defensive one, but there was to be no offensive one. Mr Bevan: That would be my principal concern about the closure of the Film Council, yes. Ms Bagshawe: I take you at your word. It would appear then that your own head of communications Mr Elstein: There’s another aspect to this, Mr Keen. didn’t get the message. He clearly said in PR Week When the British Screen Advisory Council did its analysis of options for Ministers in the light of the that that’s what he had done and that’s why this PR proposed abolition of the Film Council, we were able firm had been employed. So I think we should perhaps substantially to place functions with existing get that on the record with all your other statements I institutions, although not quite in a square-peg, round- would like to hear. hole fashion. Clearly that can be done and, in . particular, if you give up functions you will save money, but our biggest single concern was the loss of Q166 Alan Keen: Could you paint us a picture of the advocacy role, which is inherent in the how you think things will work without the Film organisation rather than a specific function. If Ms Council, the disadvantages, and will there be Bagshawe is right about the PR manager not being savings?—Can you try and explain that? I know quite on message, perhaps there’s a question mark you’re biased but I’m biased—probably towards you there, too. as well. Our serious concern at the British Screen Advisory Mr Bevan: Well, will there be savings? Yes, probably Council is that the kind of thing that Mr Bevan was because whichever body is decided should administer talking about—how to replace a dysfunctional tax- the Lottery funding will be a body that already exists, based film policy, the old section 42 type of amount, I suspect. So whatever the overhead related to being with a rational one—takes a lot of work. BSAC was a Lottery distributor is will be saved. heavily engaged in that, the Film Council was heavily The funding for the Film Council basically divides engaged in that and BFI was heavily engaged in that. very neatly into two arenas: roughly 50% of it is This dispersal of functions leaves a question mark as Lottery funding; and roughly 50% is grant-in-aid. I to where the advocacy role will sit. Obviously, the guess there may be a reduction in the grant-in-aid with Government has an advocacy role in terms of dealing the cuts that we’re going to hear about tomorrow, but with external players, but we’re aware that when it’s my understanding that the basic activities of the you’re dealing with Brussels, for instance, there are BFI, which is the main beneficiary of the grant-in-aid British interests at stake all the time in the way monies, will remain intact. I think there’s going to regulations emerge, the way they’re implemented and be a rationalisation of the Regional Screen Agencies, so forth, which people who work in the film industry which receive grant-in-aid funding, so there may be a have a much closer sensitivity to than any small saving there, and there may be a small saving Government civil servant or Minister. in terms of the central overhead. So we are concerned about that and we do hope that It’s my understanding that the Lottery money post- one of the things that Ministers will do, once they’ve 2012 is going to rise a little bit, basically, if it’s allocated all the responsibilities—or as many as they allocated to film, because it’s 2.25% of the Lottery want to preserve subsequent to this decision—is to cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 31

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein step back and institute a strategic review of film building that was built in 1940 and is crumbling, so policy, looking not just at the aftermath of UKFC and we’re going to be closing again at the end of the advocacy role but key things like distribution, November. We’re also existing in a building which which is the kind of lost child in this whole John Paul Getty gave us, which is fantastic, but it’s a discussion. very expensive way to run an organisation. Everyone knows that we have a sub-optimal So the point of the film centre was that we were going distribution status in the UK because of the hugely to raise three quarters of the money for it either from dominant role of the US distributors. We need the our own assets or from fundraising, but we needed Government to take the lead in instituting a full that central Government support to make it happen. strategic review, and we hope that once the dust has What you would end up with was a sustainable settled on what is clearly, from some people’s point organisation that was able to reach out to more people of view, not a desired outcome—but it is an and make more money, and that was living in a cost outcome—that we get a chance to then all get together overhead that was considerably less than the and have a much more constructive, forward-thinking overheads that are mounting year-on-year for the BFI five or 10-year sense of what do we want to do about now. So it was getting rid of a risk in a long-term, UK film policy. grown-up way. Ms Nevill: Can I just add to that? It is common In terms of not being surprised, of course, in this knowledge that the BFI is one of the potential environment, I wasn’t surprised at all but the problems contenders and, in that context I would just like to are still there. So we have two options: either we hand echo what Tim says, which is I think that one of the over those problems to the next generation—and the most critical things going forward is that we don’t lose problems will be that we will not have a national the coherence that we have had over the past 10 years, CinemaTech any more—or we have to look at every because they all affect one another. So your other way we can, perhaps in terms of phasing it or production, your exhibition, your distribution and whether we can step up some of our fundraising in your education and audience development, all of those some way. policies need to work in tandem. I do believe they There is also a real industrial need. What is very should stay in one place. interesting is that we’re in the middle of the BFI Secondly, to pick up on what David Elstein has said, London film festival at the moment, and one of the wherever those live, hopefully in one coherent place, biggest problems we have, even in getting the titles that organisation—and if it were the BFI we would into that festival, is that we do not have the cinemas expect to be the facilitator to ensure that there was that we need. The Odeon West End—this is a detail— that advocacy lead—whichever body it goes to, and I had a great 800-seater, but they were going to close will be honest that I am hoping that the BFI is the down. We’ve had to move into the Vue cinema. That strongest contender here, would have to change quite means for every gala night, we have to split the fundamentally from the board down, because what screening of that gala between two screens. You you’re going to have to bring in new people and new cannot do a Q&A in two screens at the same time, skills into the additional organisation to do that. So so it makes the whole experience very difficult. The the BFI’s position is that it would expect to do that if building itself—the Vue cinema—is a great it were decided that the BFI was to be the body to commercial cinema, but it doesn’t work for a film take on the majority of the portfolio that is no longer festival. You try getting Minnie Driver and Hilary being carried out by the Film Council. Swank up a whole load of escalators with people crushing in and out. The studios don’t like it. It is not Q169 Jim Sheridan: The film director Mike Leigh the sort of environment that says that Britain is one of has compared the abolition of the UKFC to the the great leading centres for films in the world and, abolition of the NHS. Would you accept that? you know what, the London Film Festival wants to be Mr Bevan: I think it’s a bit strong. the Cannes, the Berlin or the Toronto. We cannot do it in that sort of environment, so the film centre was Q170 Chair: Amanda, can I very quickly just touch also a long-term view to solving issues like that. on two slightly different things? The BFI film centre obviously would have been a great thing to have, but Q171 Chair: Premieres take place in Leicester when it was announced that it wouldn’t go ahead, you Square on a weekly basis and the studios don’t seem didn’t seem hugely surprised. Obviously we regret it, to mind that too much. but how important was the new BFI film centre to Ms Nevill: Odeon Leicester Square is fantastic when you? we can get into it, but obviously the festival is over Ms Nevill: I think in the context of the economic 16 days. We could not afford to take over the Odeon challenges facing the country, it has not at all been Leicester Square for 16 days, and there are not enough surprising. If you’ve got threats to hospitals and screens in there—there is the one big screen. So we’re schools, a film centre sounds somewhat flippant in that upping the number; so last night we did Mike Leigh’s context. It was a crushing thing, but given the new film in there and we “satellited” it—I don’t know environment, I think everybody realised that we were whether that is a verb—to 34 screens around the moving into a new world. I think the critical message country. So there are ways of using a film centre in a is that the film centre was never a vanity project. It way which doesn’t mean it is just about something was a really carefully—and financially—worked out that is happening in London. It enables you to start to solution to a problem that is still there, and the be that digital hub. Only film is an art form, I would problem is that the focus for film still exists in a argue, that could exploit digital in that way. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Ev 32 Culture, Media and Sport Committee: Evidence

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein

Q172 Chair: Could I just ask you very quickly about you had into the archive seven or eight years ago is one other point? The Committee, in its previous that it sparked people’s interest in the archives. So, inquiries, expressed great concern about the future of we’ve done lots of co-productions with BBC; we’ve the film archive. Is that now still secure? got lots of ongoing relationships. We’ve got a big new Ms Nevill: I think it was about seven or eight years series coming up with Discovery and another series ago that the Committee was really instrumental in coming up with the BBC—I think on home video. helping raise the profile of the need to put some We’ve had a constant injection of co-productions capital monies into the archive, and the good news is using material from the archive, which is a great way that we were allocated £25 million, which went down for the public to see them. to £22 million in the cuts. Some £16 million of that is coming to the national archive, and we are just about Q174 Alan Keen: I shouldn’t be asking this to go into the ground to build a vault which will freeze question—it is nothing to do with the inquiry—but is the archive. You can still get at it, but what it means that restaurant on the river frontage franchised? I’ve is that it halts deterioration of the film, so that is a enjoyed films in the beer garden but I’ve never had very good and a very exciting story because it will anything as enjoyable as watching one night we were mean that the films are absolutely safe. sitting there having a drink because from 10.35pm the Of course there is no point in having an archive if staff were taking chairs and tables away, and people you can’t get it out there and one of the points of the were going into the bar to get their drinks and when aspiration of the project that we were doing was that they got back there were no chairs and tables for them all the data that told you what was in the archive to sit on. It was absolutely hilarious. It would be a would be on a commonly held database that would be silent film—Charlie Chaplin—it wouldn’t need a available to the public, and that’s still going ahead. writer. Is it franchised? It was ludicrous. What has been cut, which is a shame, is that we Ms Nevill: I think it’s a really, really good point wanted to start to populate that database with moving because the other thing is if you look at BFI footage so that if the public go on, they don’t just start Southbank, which we invested fairly diddly-squat to get the name of the film but they can start to see at money in and got a lot from the private sector, the least clips and some of those films. So I suppose the amount of money that we generate now means that next big challenge is how we then make that archive we are running the whole of that Southbank for over more readily available. a million people for less money than we were running it on 10 years ago. That is precisely because we have Q173 Dr Coffey: Have you spoken to the BBC about much more commercial. The restaurant Benugo— that, because they have invested in their archives and quick advert here, “Great food, come on down”—yes, they still have more to do when they move out of TV we really need the income from them. Our self-earned Centre. I think they’ve put a lot of effort and money income across the BFI has grown—I have it here—in into that. the last five years from £16 million to £24 million, or Ms Nevill: We have a great relationship with the BBC in the last 10 years it’s grown from £12 million to £24 archives, with Roly Keating in particular, and Roly is million, and that’s because we exploit all of those. on our working party for archives. So in the context of some of their emerging technology, we work very Q175 Alan Keen: If you didn’t run out of bitter in closely, particularly in the archiving of television. You the bar inside so often, and if they didn’t take the can’t get away from the expense of digitising film. tables and chairs away before closing time, you’d You have three problems, or challenges if you like. make even more. The cost of digitising is quite cheap, but there’s no Ms Nevill: I’m going to pass them that tip. point in digitising a film until you have preserved it Chair: I am tempted to observe that if John and conserved it, otherwise what you are going to get Woodward had taken people to the BFI restaurant, he to see isn’t going to be very exciting, and the costs of would have recycled the money. conserving titles is very expensive. The second thing is we don’t own the rights to most Q176 Paul Farrelly: Just very briefly, Amanda, it of the material that we copy or digitise or make sounds very much that if you’re successful in the bid available. Of course, we make something like 12,000 to do what the Film Council is currently doing, or titles available a year across the country, so we have much of it, you have to reconstitute yourself and re- whole teams of people who do nothing but negotiate organise yourself so that you’re going to pretty much rights,and with every rights negotiation, it is a gamble, replicate what the Film Council is doing already. Is it because you have to pay for it, so you’re going to correct that you would want to do that? decide how long you are going to use that film for, Ms Nevill: I don’t think that we would want to are you going to release it on DVD or are you just replicate. I think there’s a difference. The BFI going to release it into the cinemas. So, for every title fundamentally is a charity there to deliver to the you have to look at it and work that out, commercially, public. The Film Council was the lead strategic as tightly as you can, bearing in mind that we’re agency for film. I think what we’re talking about is dealing with titles that the market isn’t releasing. We that we spent 18 months looking at the possibility of have to take a gamble on the sort of return that we’ll a merger—in other words, would there have been a get from that. Then the third thing is obviously the more efficient way of running the two organisations if cost of digitising it and getting the material out there. you put them together? For reasons that I don’t think But the end results are really, really worth it. Because there’s any value in going into now, there were another thing that came as a result of the inquiry that definitely benefits that would have come about cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 33

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein because of that. I think what we’re saying is decision that has been taken to abolish it and the pragmatically—and I don’t need to tell you this manner in which it was taken? because this is what your inquiry is about—we’re Ms Nevill: I think the fact that we talked about living in an environment where there is a lot less mergers for 18 months before this decision was taken money, so we are going to be delivering less across is an indication that we felt that there was a better every single sector. way in the context of the BFI and the Film Council Our responsibility, or I feel that the BFI’s that we could have worked. I think the way in which responsibility and I know Tim feels exactly the same the decision was taken was surprising and quick, and for the Film Council, is that whatever comes out of it would have been perhaps more productive to have the machinations that are going on, we have to use had the time to think about things—because the best endeavours to create an entity that can hang on decision was made so fast that it caused huge anxiety to and build on as much of the legacy that the Film across the piece, whether it was the Film Council or Council has generated over the last 10 years, and do even the BFI trying to hold the level of confidence as much as we can to ensure that the film industry in in the environment, and I think that could have been Britain as a competitive environment, and film culture, avoided. I suppose I find it difficult to imagine in an which is the bedrock of that industry, are protected as environment where the economics are challenged so strongly as possible. One of the things that we haven’t much that there wouldn’t have been a requirement in talked about today, and which I can completely any case, like in any other sector, for film to look very understand because there is so much going on in the comprehensively at how it could protect front-line film firmament, is that the BFI itself faces quite services and perhaps work more effectively together significant challenges to its funding. It will be even behind. But whether that was abolishment or a merger, more challenging because, notwithstanding the great I think the debate is out. work of the Film Council over the last 10 years, actual funding to film has not grown very much if you Q178 Ms Bagshawe: Mr Bevan, in particular you’ve compare it with the other sectors. been very generous towards Ed Vaizey as in not I am not whinging here. Greg Dyke, my chairman, blaming the bearer of bad news. I know he’s recently always says, “Whinging is the end of the had discussions with various representatives from the conversation,” and I agree with that, but the fact is the UK film industry about the way forward after the grant in aid to the BFI over the last seven years has abolition of the Film Council. How do all of you feel stayed static to the penny. If you then fold into that a that those discussions between Government and the 25% cut, it’s a very significant erosion because we industry about future steps have been going? have already, in those seven years, done everything Mr Bevan: I don’t know all the people he has seen. I that we can to increase efficiencies, economies and know he’s seen all the trade organisations and all the productivity. So very, very crudely, you can look at rest of it, but one just wonders whether he’s seen the the productivity of our staff just based on earned people who really punch hardest or not. income in the last five years. Productivity per staff in 2005 was £38,000. Crudely, each member of staff was Q179 Ms Bagshawe: Are you talking about responsible indirectly for generating £38,000. This filmmakers? year, those same staff will generate £53,000, and in Mr Bevan: Well, yes, I think it’s the filmmakers. If order to absorb the 25% cuts, we are going to have to you look at the Film Council board, for instance, push our income level so that the same member of we’ve got Barbara Broccoli, a household film name; staff generates £83,000. In other words, you are going you have Elisabeth Murdoch, a household studio to have fewer staff generating a lot of money. The film name; you have Josh Berger, who represents the sector is going to be challenged going forward, which biggest business in inward investment in this country is why I think we have to use our best endeavours from Warner Brothers; and you have me, who runs because we’re going to have to absorb, and we the biggest independent production company in this understand this, fairly significant cuts, almost country. And I could add two or three other names to certainly, and also the fact that the Film Council isn’t that who would make up the group of people who you going to be there and we’re going to— think should really be listened to because we make our living out of it—we live it, breathe it, and all the Q177 Paul Farrelly: You have anticipated my next rest of it. I’m not sure if those people have been seen request. It would be very helpful to us if all you guys or not. I don’t know. could give us evidence setting out a comparative position and some context, and outlining to us what Q180 Ms Bagshawe: Do you see a role for yourself, happens in other countries, in particular in Europe— Working Title, and the other members of the Film Italy, France and Germany. Clearly, we know that Council board that we have talked about in a future Canada is a major centre in drawing production. That working model? would be extremely useful for us just to see what other Mr Bevan: I’m out of here. If this is the public sector countries are doing. and the way you get treated, I’m done, basically. A final question, Amanda, from what you’ve said Ms Bagshawe: Okay. about having looked at a possible merger previously. Mr Bevan: Because I care passionately about film and A decision has been made now and you have to live I think I can make a much bigger contribution to it with it but it sounds like, from what you are saying, through the private sector. that your verdict is that the UK Film Council was Ms Bagshawe: Fine. Can I just say I think it’s a pretty much doing a good job. Do you regret the great shame? cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Ev 34 Culture, Media and Sport Committee: Evidence

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein

Mr Elstein: It’s pointless to express a view about at it again you’ll need to look at it with a fresh eye what’s already happened because we are dealing with because your own role will have changed. So are you the aftermath, which in many ways is more important. clearly preparing to do that? I can begin to understand why Ministers, if they’ve Ms Nevill: Absolutely. Definitely. Secondly, are we taken a view, would rather announce it than go committed to an overhead of between 5% and 6%? through the charade of a consultation. I am more Yes. The board’s instruction to the BFI is that we need concerned about the speed of policy on the hoof that to minimise the overhead so that we can maximise the we’re experiencing which is, I guess, part of a funds. Potentially, if we become an agency that takes consequence of announcing an abolition with an on more of the activities that were with the Film unrealistic 15-month gap between pronouncement and Council, I would hope that some of the expertise execution. It’s just not going to be 15 months. So would come with itand, again, I’m saddened, although we’re all going through a very rapid consultation I understand Tim’s position, but there are also board process and I’ll be seeing civil servants tomorrow to members on the Film Council who would be brilliant put in BSAC’s point of view. But that’s why I board members on the BFI. emphasise that, after you’ve rearranged the existing Ms Bagshawe: Absolutely. Thank you. furniture and tossed out one or two pieces that have passed their sell-by date, you really do need then, as Q184 Dr Coffey: I have a question for Mr Elstein. Ministers, to institute a proper strategic review. It From the submission from the BSAC, I think the idea would be really regrettable if major industry figures of having a fund manager and assistant fund manager felt so bruised by the way in which the UKFC was for production making single decisions is of great killed off that they couldn’t participate in that strategic merit. You make a point on the key points about, review. So I understand Tim’s sense of huge relief— “successful creative and commercial risk-taking “Gosh, don’t have to do that anymore”—as well as should be rewarded from public funds”, which to me saying, “Well, up yours, mate.” But it’s important, so seems to be a bit of a contradiction in terms. Damian I would ask him—if he is asked and it’s next year— was saying earlier that there are going to be some that he participates in the same way as the rest of flops so you take a balanced approach, but can you us will. tell me more about what you mean by that? I appreciate that the Government is always trying to get Q181 Ms Bagshawe: Clearly, there is a bit of work back its money. Are there other mechanisms like profit to do with Working Title there, and it will be awful sharing and similar that should be looked at? for the industry if we lost your expertise, so please Mr Elstein: Well, what we’re saying there is that part reconsider. of the argument that has taken place between the Amanda Nevill, you’ve talked a bit, reading between industry and Government over generations is about the lines, about the duplication of functions that you self-sustainability. Self-sustainability is like perceive between the BFI and the UK Film Council motherhood and apple pie—a wonderful aspiration, and the necessity that would have been presented of but unless you work towards it, how do you ever get some sort of restructuring of the two bodies. What there? Our suggestion is that the recoupment from percentage of BFI funds do you expend on successful Lottery-funded films should be adjusted in administration? We’ve had discrepancies between the such a way that the film production people should figures we’ve been presented by civil servants as to share in the rewards more than being too far behind administrative overheads and the figures that Mr as a tail-end Charlie. Bevan has given us of only 10%—we don’t want, if In other words, the emphasis on recoupment to the you like, to repeat any mistakes that were made. What fund is at the expense of incentivising the people we percentage does the BFI currently spend on want to become commercial filmmakers. It’s a kind administration? Are you actively looking at ways to of self-contradictory approach because what we really reduce it so that we can get money to film want these people to do is make successful films so production directly? that then they don’t need Lottery funds when they Ms Nevill: I don’t know the exact percentage for the make their next one. So it’s a minor adjustment to the BFI, but I can let you have that. I’m pretty certain I way in which recoupment has worked, but we think know it, but I’d rather not say in case it’s very, very that the signal it will send out will be very important, wrong. if it can be made. Tim will understand better from In terms of what are we doing actively to reduce our detailed involvement as to the pressure that there has overheads, we’ve been doing it for something like been on UKFC in recent years to maximise its own seven years. So every year we try and improve recoupment because it has so many other things it has procurement, share services and cut staffing. Since to do. But, from the individual filmmaker’s point of I’ve been at the BFI, we’ve lost more than 100 staff, view, if the recoupment priority is “fund, fund, fund, but we’re actually delivering more. fund, filmmaker”, it’s just not encouraging enough. We need to readjust that—to recalibrate. Q182 Ms Bagshawe: Your role is to expand, because, presumably, you’ll be taking on some of the Q185 David Cairns: Just quickly, and it’s following functions that the Film Council used to do on from Louise’s line of questioning and it’s to Tim. Ms Nevill: Potentially. Given that we are where we are and you’ve obviously made a strong case that you thought the UK Film Q183 Ms Bagshawe: It will be a different role; you’ll Council was doing the job perfectly well—or well— have different administrative costs. So when you look and given the very strong message that the functions cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 35

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein ought to be kept together under the joined-up BFI has plenty of problems. Adding these functions is approach, do you think that the BFI would be the right not going to make Amanda’s life any easier, but I people to take on this function and, if not, then who? think the BFI is ready to take on tasks and has steeled Mr Bevan: Possibly. I think there are two pretty good itself mentally to do what is required. I think it’s just options. One is to shift the production and film more important to focus the core activities most certification functions into a unit that’s held within the optimally rather than say, “Well, nobody can do any Arts Council, which would be the same people who of this,” and therefore give up. There are one or two are working on that side of it at the Film Council at functions that could stand alone without any new the moment. Then the BFI is certainly an option. We infrastructure, such as what we call the British Film did go through 18 months of seeing whether a merger Commission, which is the inward investment function was a good idea or not, and it was definite that that that might sit with certification and so forth. All that was not what would be called a smooth road. There is in our paper and we very carefully went through all are definitely issues. the different functions and all the different options, and we stated what our preferences were. Q186 David Cairns: And what would they be? But we are of the view that, as Tim said, the Mr Bevan: I think if the BFI reconstituted itself, it broadcaster housing is not going to work and doesn’t needs a new board and probably—dare I say it—a seem to be on the table anyway and that, of the new chief executive. It’s a very, very, very, very available outlets and repositioning options, BFI has different function if it were to do the two things, substantial advantages. What we would not want to basically. So if that was to happen, there may be merit see is any re-involvement in any significant way of to that. the Arts Council England (ACE). The experience with ACE in the past was not a happy one. Q187 David Cairns: Do you think there’s an alternative which has equal merit? Q189 Chair: Amanda, are you up to taking it on? Mr Bevan: I think there are definitely options. I think Ms Nevill: Yes, definitely. I think the first thing is that what doesn’t have any merit is putting the production it’s a very different BFI. The last 10 years have been function inside a broadcaster. I think that’s a really very interesting, I think across the whole sector. So stupid idea because what will happen is that the what the Film Council did was it brought in a level of broadcaster would stop spending its own money on professionalism and a coherence that was really film production and start spending Lottery money. needed, but I would say in the same breath that the And also, I think, it’s very important that there’s a BFI changed from being a very worthy, slightly plurality of places to go to as an independent producer inward-looking organisation to one which is much in Britain. The three—the BBC, Channel 4 and the more commercially acute and much more aware of its Film Council—are a pretty good three places for audiences—a very lively, lean machine. producers to go. It would be great if we could add to I think the other thing that is really important is that that Sky, by the way. I don’t understand why Sky does in saying that we would be very happy to extend our not make a much larger contribution to British film in portfolio further, what I’m saying is that the this country, as their counterpart in France does. foundations of scale and the ability to take on Canal+ is the absolute backbone of the film industry activities of this scope and size are definitely there. there. In one fell swoop, if Sky were to make a proper What I absolutely agree on, and would never wish to contribution to British film in Britain and you upped stop emphasising, is that in so doing, you have to the allocation that the BBC makes—and Channel 4 think about transforming the BFI to the next level. have recently upped theirs—I think that would make And absolutely, you would certainly want to bring a significant difference to domestic film production. different sorts of skills on to your board, and fortuitously we’ve got quite a few vacancies on the Q188 Chair: I think it’s only fair that we put David’s board anyway. Also, you would need to bring in skills question also to Amanda and to David. that obviously we have not got in-house at the Mr Elstein: Well, the view that BSAC took was that moment. Indeed, it would be profligate if those skills the key functions that need to be reallocated, which were just sitting there waiting for such an opportunity are the production fund and development fund, are to come along. probably best housed at BFI. BFI would need quite a But there is something else that goes beyond the lot of change to encompass all that, but they have practicalities that have been so eloquently put by Tim the right culture, the right infrastructure and the right and David, which is that I think there is something history to do that. We took the view that it was highly exciting that could be created by bringing these unlikely that any new structure was going to be activities closer together. If you look at the BFI and created and we couldn’t see a better alternative. I you look at film in the whole, the BFI has a great know that Film London has been suggested as an DVD label. It runs the BFI London film festival. It option, but we do see Film London as much smaller— runs the great CinemaTech, which is a great focus. It one tenth of the size of BFI—largely existing at the is the largest distributor of cultural cinema in Britain. behest of the Mayor, and with inevitably a kind of So, no matter what, you do have that cultural entity inward investment London focus. So a very there which I think should be at the disposal of any substantial transformation would have to take place in of the filmmakers to whom we give public money, that, and it would have to be completely reconstituted, perhaps because of the environment which can nurture which seems to contravene the “no new body” type and incubate and help build that cultural crucible of view. which results in the Ridley Scotts and whoever of the cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

Ev 36 Culture, Media and Sport Committee: Evidence

19 October 2010 Mr Tim Bevan, Ms Amanda Nevill and Mr David Elstein future. It also means, however, that for some titles— would you need Lottery funding for that? So there has because of the nature of putting in public money— to be risk involved, and if all we ever had to do was there is always going to be some risk. There are to predict what would fail, we would get it right 90% always going to be some titles that are perhaps not of the time, because 90% of the time films don’t get going to find the audiences that they hoped for in the their money back. So we just have to be careful about beginning. The BFI does have some of those activities characterising the British film industry as being there that could ensure perhaps that there would be dependent on injections of specific amounts of public more opportunity for those if they were not picked up money. Above the level of the tax credit, it is a modest by the professional or commercial sector. amount—most of it coming from broadcasters. Chair: Thank you. A very quick last one. Mr Bevan: I think it is an argument for keeping the production side of the Film Council intact basically, Q190 Damian Collins: A very quick last one and because I had spent the last six months putting a new it’s on your last remark, but I’d be interested in other production side together, which I think is extremely people’s view. In terms of public support for making well led by Tania Seghatchian now. It’s a very films in the future, do you think the issue is that, in democratic way of getting through. It allocates its terms of developing the industry and nurturing talent, resources. Of the £15 million, I think 20% goes into it is about supporting films that are seen as too risky project development, a couple of million is ring- for commercial producers because you are either using fenced for artistic and more interesting films, and the untried and untested talent or the format or the balance is to go towards investing in more commercial concept might be considered too risky? Or do you cinema with a lean towards first and second-time think that, in general in the UK film industry, there is directors. And that was after a great deal of a lack of investment from the private sector meaning consultation, talk, chitchat and all the rest of it and it that there are perfectly good film ideas that are not seems to me that that is a pretty good mix and a very necessarily viewed as commercially risky, but just good team at the moment and they have a good list of struggle to get the level of financial support they need projects on the go. to be viable? Are there things that the Government Ms Nevill: I think the one thing, just to pick up on could also do, not just looking at it in terms of public something else that came up earlier, is that if you look funding, but looking at trying to support the growth at the box office in this country, something like 98% of markets, that would be a significant contribution of it comes from fewer than 20 titles. So, if you’re as well? saying that you are going to invest in British Mr Elstein: The first thing to remember is that two filmmaking, diversifying and bringing up new talent, thirds of films made in the UK receive no UKFC, you have to look at ways in which you can grow your BBC or Channel 4 funding, so there is a very audiences to be a little less conservative in their substantial industry that is not dependent on specific choices and to make sure that a broader diversity of injections of money in order to get made. Everyone is cinema is available more broadly across the UK. So I dependent on the 15% tax credit. That is a given. also think that’s part of the equation of making a What we expect particularly the Lottery funds to do success. is to offer a dimension of additionality, which is Mr Bevan: Or we could just make good movies. That spreading the cultural/commercial risk a little more would be the alternative. adventurously. If all you are ever doing was backing Chair: That would help. We need to move on. Can I winners, you wouldn’t be adding very much. Why thank the three of you very much?

Examination of Witnesses

Witnesses: Dr Simon Thurley, Chief Executive, English Heritage and Dame Fiona Reynolds, Director General, National Trust, gave evidence.

Chair: We turn to the second session this morning, in First, we have embarked on an efficiency programme which we are concentrating on heritage. I apologise that has led to us, I think, being among the most for keeping you waiting, but welcome to Dr Simon efficient of the bodies in DCMS. We have also been Thurley, the Chief Executive of English Heritage and very busy generating additional income. The income Dame Fiona Reynolds, the Director General of the that we generate from our commercial activities now National Trust. stands at £48 million a year, which is substantially more than it was 10 years ago, so a combination of Q191 Mr Sanders: Good afternoon—it is just additional income and efficiencies has meant that the afternoon. What have been the consequences of the services we have provided have not had to be cut. reduction in English Heritage’s grant over the past But there have been two other consequences that I ten years? think have had a wider impact. The first is that we Dr Thurley: You probably have the figures there of haven’t been able to invest in the conservation of the what we have had to deal with. I’m pleased to say sites that are in our care, and there is currently a £56 that it hasn’t resulted in a significant reduction in the million backlog in conservation. The second thing is services that we provide to the public. It hasn’t that the grant money that is available for third parties resulted in a reduction in the services we provide to has effectively been frozen for 10 years, and with the visitors at our sites. That is mainly for two reasons. effects of building conservation costs being quite cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

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19 October 2010 Dr Simon Thurley and Dame Fiona Reynolds high—the inflation costs being quite high—this has advice we give to, for instance, churches and other meant there has been quite a lot less money available types of specialised heritage. We will do our best to for us to grant out to third parties, particularly for preserve the area of listing and scheduling heritage heritage at risk but also for other types of heritage protection, which is at the core of what we do. So it activity. is a question of looking at the core of our activities and protecting those above everything else. Q192 Mr Sanders: I think the figures show your administrative costs have fallen by 16% in the past Q197 Mr Sanders: Would it be better to encourage three years, which is quite impressive, but can English maintenance and preventative measures for Heritage make any further reductions to their deteriorating buildings rather than grant-aiding them administrative costs? when they are already in disrepair? Dr Thurley: Of course it is always possible to make Dr Thurley: Of course, yes, it would be, and there are further reductions and—no doubt after Thursday’s a number of things that could be done. This letter that I’ll be receiving from the Secretary of Committee, in previous existences, will be familiar State—we will have to make further administrative with the issue of VAT, and that is obviously a big cuts. Clearly, there comes a point when you reach a issue. A lot of our expenditure and the expenditure of stage of efficiency from which it is difficult to make NGOs—the amenity societies and so on—is very substantial improvements. Some benchmarking increasingly focused on helping people undertake work that we have done on things like the cost of satisfactory maintenance in the first place rather than our finance and HR functions does show that if you waiting until there is a problem at the end. If you were benchmark that against commercial companies of a to look, for instance, at the substantial amounts of similar size, we are more or less there in percentage money that English Heritage puts into helping places terms. Therefore, the amount of the saving that we’re of worship, we have been rebalancing over the last going to make from efficiencies and from few years the amounts of money we put into remedial administration obviously will be smaller than we work, to repairs, and the amount of money we’ve been would like. putting into supporting congregations to understand how you maintain properly a 13th century building so Q193 Mr Sanders: You say that you are expecting a that it doesn’t get into the sort of state where it has to letter from the Government. Have you had any come to English Heritage or the Heritage Lottery dialogue with Government in advance of the Fund for a grant. spending review? Dr Thurley: Almost ceaseless for the last three Q198 Mr Sanders: A final question: in your dialogue months. with Government, did you raise the issue of VAT? Dr Thurley: We have raised the issue of VAT many Q194 Mr Sanders: Was that fruitful, do you think? times with the Government. In the context of the Dr Thurley: I guess the letter on Thursday will show spending review, the conversation we’ve had with whether it was fruitful or not. them has been about the listed places of worship VAT reclaim scheme, which is a sort of substitute scheme Q195 Mr Sanders: Was it a dialogue between two, for the big decision that we would really like, which or a one-way communication? would reduce the burden of VAT on repairs to Dr Thurley: Of course we have new Ministers. I had historic buildings. the privilege of knowing the Secretary of State when he was in opposition and I had the opportunity to Q199 Chair: Can I ask this, Dame Fiona? The show him various heritage sites. The heritage National Trust is probably the most successful body Minister—and we are very happy to have a heritage in the country at attracting huge numbers of small Minister, John Penrose—is someone who is new to donations from individuals to support cultural heritage the brief and it meant that we had to work very closely activities. How important do you think it is that we with him to bring him up to speed. I think that we continue to have public support for heritage through have had a very fair and professional hearing from English Heritage? him, and I think that he has gone out of his way to Dame Fiona Reynolds: Thank you very much for that understand the complexities of not only what English nice compliment. Yes, we do indeed raise very, very Heritage does, but what happens in the heritage sector. large sums of money through asking millions of people to give us what individually might be quite Q196 Mr Sanders: Assuming the letter is the bearer small levels of donation, but which add up to a huge of not particularly great news, how are you going to contribution. The acquisition of Tyntesfield in early prioritise what are essential and non-essential 2001–02 and Seaton Delaval Hall in Northumberland activities and roles performed by English Heritage? last year were very good recent examples of that. It’s Dr Thurley: There are some things that we are obviously critical that there is public support for required to do by statute. Clearly, those have to come heritage. This is a country that is enormously rich in to the top of the list. There are also some things that both our historic and natural environment—the only we do and, therefore, they also must be at the treasures that we have. And it’s been public support, top of the priority list. Therefore, we will be very literally in our case for over 100 years, and many careful not to reduce the planning advice service that other bodies that have been around for a long time we give to local authorities. We will be very careful too, that have nurtured that public support so that we not to lose some of the expert technical expertise and have the heritage that we know and love today. That cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

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19 October 2010 Dr Simon Thurley and Dame Fiona Reynolds does not mean, of course, that we do not need the the composite proposal, which is administratively Government to be critically engaged in a number of simpler and certainly plays to the strengths we have areas, both as regulator and as provider of the in attracting large amounts of money from large statutory framework within which we all operate. numbers of people, rather than very small numbers of Indeed, in showing that the Government care about people and huge donations. There are other views on heritage too, that leadership is absolutely vital. But I that subject, but that’s our view. see what the National Trust does, alongside many The other thing that would enormously strengthen the other organisations, as a very strong part of the picture position is to enable people to give gifts during their of heritage in this country. We value our independence lifetime. At the moment you can give money tax and we value what we can do, but we do not do it efficiently on your death through the AIL system alone. (Acceptance in Lieu) and that’s enormously important, but you can’t—as you can in the States— Q200 Chair: So you would share Dr Thurley’s give money tax efficiently during your life on either a anxiety if English Heritage was to suffer another capital or revenue basis. There’s lots of evidence that significant cut in its income? that would improve things, not only for us but for Dame Fiona Reynolds: It’s clearly critical that we many other charities. So, that wouldn’t be a substitute have strong heritage statutory bodies in this country. for statutory activity that takes place, for example by We do an enormous amount with our 3.8 million English Heritage, but it certainly would help things. members and hundreds of properties and huge The final area, of course, is support for volunteering. landholdings, but we are not a statutory provider in We have an enormous contribution through gifts of the same way that English Heritage is. So we time from our 61,000 volunteers. Again, the absolutely believe it is important that there are strong Government could make it easier for people to give and effective statutory bodies and a strong and time—for example by volunteering during work time. effective regulatory framework for everything that we There’s a very small amount of support for that at the and others do. moment and it could easily be expanded. But I think there’s a risk that the Government sees the voluntary Q201 Chair: We will come on to the actual sector as simply able to pick up all the issues that ownership, I think, in due course, but in terms of the may fall out—we don’t yet know—of the Spending grant-giving activities of both English Heritage and rReview. And I think there has to be a word of caution the Heritage Lottery Fund (HLF)? about that because all of us in the voluntary sector are Dame Fiona Reynolds: Yes, we receive small very clear about our obligations and our amounts of grant proportionately to our overall responsibilities, and we cannot simply take over position. Our turnover is around £400 million a year, things that were Government funded without some of which a very high proportion is from membership very, very careful thought. and donations, with well over half coming directly from the millions of people who support us. But there Q203 Alan Keen: Could I come to built heritage? are small amounts of grant aid—last year it was just I’ve lived in or close to the London borough of under £2 million from English Heritage—in relation Hounslow—I now represent the western half—for 47 to some very specific statutory obligations, which go years. Luckily, from a political point of view, I back many decades in some cases around particular represent not the posh end, so it is a virtual desert for properties that were transferred to us with particular built heritage. But we’ve got Osterley House, Syon relationships and the commitment to grant aid their House, Chiswick House, Gunnersbury House, which long-term maintenance. We get grant aid from HLF: we share with Ealing, and Hogarth’s House. There’s it provides us, after a very lengthy and detailed been a very steep decline in conservation specialists application process, with grants for specific projects in local authorities over the last so many years. It is that we want to do and we compete with other bodies very worrying and it is going to get worse with the for those grants. I think last year HLF was just under cuts, presumably. What will be the consequences of £3 million, but it varies every year, clearly. that? Dr Thurley: Well, this is a matter of extreme concern. Q202 Chair: We’ve heard from Arts & Business A very important point I’d like to make to the about the Government’s wish to try and plug the gap Committee is that while English Heritage obviously by increasing private philanthropy. As the most plays an important role in channelling some parts of successful organisation in the heritage sector at the Government’s expenditure towards heritage, the attracting voluntary donation, do you think there is Government’s investment in heritage is much wider further scope? than the current £130 million that is the English Dame Fiona Reynolds: There is certainly further Heritage grant-in-aid. An absolutely vital part of that, scope in the sense that, as I said earlier, Government as you rightly point out, is the money that is spent on provides the framework within which the activities of heritage by local government, particularly through the the heritage sector take place and also the employment of conservation officers, who are the philanthropic climate. There are certainly things that front-line troops in protecting heritage. They don’t could be done. For example, we’ve been calling for spend the majority of their time protecting Syon improvements to Gift Aid, which is a very significant House, Gunnersbury House or Chiswick House. It is source of income to us—a top-up of donations—and the conservation areas; it is the pub on the corner; it there are lots of discussions going on now about how is the listed telephone box; it is the milestone by the that might be best achieved. We, for example, support Western Avenue. It’s those things—the things that cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

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19 October 2010 Dr Simon Thurley and Dame Fiona Reynolds mean a lot to local people—in which local Dr Thurley: I doubt if we’ll ever get to a situation conservation officers are mainly engaged. What we where there are no experts—I sincerely hope not. I know from our figures—from our surveys—is that think the question is making the argument that making since 2007 there’s been a 14% decrease in the number good conservation decisions makes good places. Good of conservation officers. What is undoubtedly places are places where people want to live. Good happening, and is going to happen more, is that places are economically successful places. Therefore, conservation officers are not being replaced when they the argument that we would put to local authorities is leave and the type of specialist resource that has that this is a skill you need among your officers if you previously existed in planning departments is no are going to create an environment where people are longer there. happy, where people are prosperous, where people are Now, the second part of your question is “what does stable, where you have low levels of crime, where you that mean?” Well, it means that the danger is that have high levels of tourism. This is a core skill that when planning decisions are made that affect you need, and that is the argument that we have to conservation, the local councillors who sit on the make and win. planning committees do not have the appropriate Alan Keen: Another issue, of course, which helps advice that will enable them to make sound decisions. attract local people to heritage issues is that—you had That gives us all a problem. It gives local people a to sit through the previous session and be kept problem because heritage is one of the things that waiting—lots of those sites that I mentioned in winds people up more than almost anything else in Hounslow are used frequently for films and TV terms of planning. So, there is a looming issue and it dramas. We link those together and help attract people is one of the issues that English Heritage is very much to it. But you tend to get active groups for one house committed to addressing in partnership with not only and an active group for another house. We don’t want local authorities but NGOs, the amenity societies and to rely just on those people who do that. Thank you, others. that sounds encouraging.

Q204 Alan Keen: Have you got a scheme possibly Q206 Paul Farrelly: I’m very well aware of the gaps for educating councillors, because they’re going to be around the country just from my own experience of under pressure? Their main aim is to look after the my own borough council—Newcastle-under-Lyme— less well-off people and that’s got to be their priority. in conservation expertise. Quite often you realise the Traditionally, in Hounslow, we’ve got the aeroplanes value of something only when it has either fallen coming over the top of us, so we’ve got plenty to down, when it’s become uneconomic to repair and worry about, and councillors tend not to be focused people say, “What a shame,” or when somebody has on the things that I care about and that you both been stupid enough to allow something to be especially care about. Have you got any scheme for demolished because of a lack of expertise. I will educating local authority councillors? declare this now: I’m the founding patron of an architectural design centre called Urban Vision in Dr Thurley: Yes, we have two schemes. We have one Staffordshire, which in part tries to fill the gap. It’s for elected members which we call “Heritage one of 20-plus of these regional centres around the Champions”, and our objective is to have as many country. The Regional Development Agencies have heritage champions across the country as possible. We now been abolished. Local government grants are want one in each local authority. Ideally, we would coming under cuts, and all these bodies receive like a cabinet member to be a heritage champion, so funding and are supported by the Commission for that’s an elected member who holds particularly the Architecture and the Built Environment—CABE—but brief for keeping an eye on heritage and keeping an there’s a question mark over the future of that eye on the other side of what we do, which is organisation. supporting the necessary expertise at officer level. We Just before we move on from English Heritage, I just have a very extensive training programme that we call wanted to ask about the situation with CABE and the “Helm”, which works across the country with the discussions that you’ve had, because this is an area officers. So, we recognise that a really important part where you may be asked, if more quangos, as they of dealing with the potential skills gap in local call them, are merged, to be taking on more authorities is getting commitment from elected responsibilities. The core responsibility of CABE is in members and then working with possibly officers who design review, which is not something that English don’t have a title “conservation officer”, but are in Heritage does at the moment. other parts of the planning department, to make sure Dr Thurley: Well, obviously, it would be completely that they have the necessary skills to provide the right inappropriate for me to comment to the Committee on advice to the planning committees when they consider the future of another body, so I won’t do that. But heritage matters. what I can do is to say that there were discussions during the progress of the debates about the Public Q205 Alan Keen: So you fear, I suppose, that there Bodies Bill about whether English Heritage and won’t be any conservation? Well, maybe not, but if CABE could be appropriately merged. There were you take my own borough, you fear that we’ll end up serious discussions about it on a philosophical level with no experts and, therefore, you’re hoping you can and I should say that not only I and Richard Simmons, get through to other council employees as well as the chief executive of CABE, but also our respective councillors and give training. It’s not so much training chairmen and commissions, felt that there was a as to make sure they’ve got the culture? fundamental conflict of interest in such a merger being cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

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19 October 2010 Dr Simon Thurley and Dame Fiona Reynolds pursued because the two bodies represent two very Government started collecting the most important distinct constituencies. Those constituencies on ancient monuments in the country to form a national occasions—not always but on occasions—do come collection of ancient monuments. It started off into conflict, and it seemed to us and I think collecting prehistoric monuments until about the subsequently, seeing as we haven’t been merged so 1920s. Through the 1920s, 1930s and up until the war, far, to Ministers that those conflicts perhaps should be it collected a large number of mediaeval buildings, resolved in public in a democratic forum rather than including ruined abbeys and castles. By 1945, the being resolved by a quango behind closed doors. Ministry of Works—which basically was carrying out Obviously what I mean is the balance between the the functions that English Heritage now carries out, quality of new design and preserving old buildings, although, of course, there were fewer of them— and if there is a conflict between those they should be already had in its care over 250 sites it had opened to resolved by local elected councillors and not by two the public. quangos sitting in London. After the war, it was realised that a huge number of country houses would fall vacant and that there was Q207 Paul Farrelly: One of the importances of going to be a terrible problem with them, and the design review as carried out by the local body, which legislation that we all understand that set up the also gives some conservation expertise as well, is that arrangements that allowed the National Trust to take it tries to reconcile these sometimes conflicting on houses came into being. And with the exception of differences. It’s a peer review process to improve the one country house, which was the one that the quality of design of new buildings in areas such as Government took, which is Audley End—which is the mine, like others around the country, where people thing that frightened it—it then passed the legislation have not really looked at the importance of design in which allowed Blickling Hall, which was the first one the past. But again, it’s not something that you do. As the National Trust had, and the National Trust took on well as the conflicts, do you have the expertise to do the houses. So, the Government’s legislation passed it if CABE was simply abolished and you were asked after the war was deliberately passed to prevent the to take on the task? situation of the state taking on all these country Dr Thurley: Well, the core expertise that English houses, which was obviously a genius idea and Heritage has is in identifying what is significant— created the fabulous organisation that we know the historically, architecturally, aesthetically—from our National Trust is. past and advising local councillors, owners and others So, the buildings that English Heritage looks after are on the best way to give that a sustainable use for the a carefully and deliberately constructed collection of future. Now, that might involve, on occasion, making buildings, just like the paintings in the National adaptations to buildings, sites or monuments that Gallery, that were collected by the state to illustrate gives them a new and viable use, in which case we British civilisation, because it obviously included would advise on aspects of new design. But we really buildings in Scotland and Wales at the time—they are do not have the skills and expertise to comment on an now run by Historic Scotland and Cadw. So, there is entirely new building in a new setting that has no a coherence with the collection there and, of course, heritage aspect involved at all, and I think it would be that collection belongs to the public. inappropriate for us to do so. Now, the question about who manages them is quite easily answered, which is this is obviously a matter Q208 Damian Collins: A question to both of you, for Government and it is for the Government to decide really. Do you think there will be merit in asking who manages that national collection of sites. The English Heritage to concentrate on some of the national collection of sites does not belong in a preservation issues that have been discussed so that freehold sense to the Government, with a very small the visitor attractions that English Heritage runs could number of exceptions. Most of them are in what is be run by the National Trust? In my area I think there called guardianship, which means that the freehold is are—I represent a constituency in the south-east—70 retained by a private member of the public, and the visitor attractions run by English Heritage. Do you guardianship is vested in the Secretary of State. The think it would be better—I’m not saying you’re not Secretary of State could decide, if he so wished, to doing a good job running them at all—in terms of transfer the responsibility for running the national simplifying the role that English Heritage, and do you collection of ancient monuments to another body—to think it might make sense to say the National Trust the National Trust. The Government could set up a could run those sorts of visitor attractions, which are new quango to do it and there could be various other more like the sorts of attractions the National Trust arrangements. My understanding of the situation at the runs already, meaning that English Heritage could moment is that the Government believe that the focus on some of the conservation advice and current arrangements seem to be satisfactory, but I protecting heritage sites that aren’t visitor attractions don’t know whether Fiona wants to add to that. and for which there aren’t the amenities there to make Dame Fiona Reynolds: Yes. Well, I think there’s a them such? philosophical answer to the question and a practical Dr Thurley: I can— one. The philosophical one is very much about this Dame Fiona Reynolds: Yes, go on. national collection, which was established as the Dr Thurley: I will kick off and then hand over to responsibility of the Government—the Government Fiona. It might just be worth very briefly just setting will decide how they want that best managed. I think out the background of why English Heritage runs as we look at public bodies lists and all the rest of it, visitor attractions as well. In the 1880s, the they do not seem to have made any dramatically cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

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19 October 2010 Dr Simon Thurley and Dame Fiona Reynolds different decisions, but it’s within their gift, ultimately, environment that is created by the Government. That to make that decision. We accept that. That’s a can apply in any sector. It applies in the health sector philosophical view. as well as the arts and the heritage. It’s a very broad The practical one is does the National Trust want to and successful part of what makes us as a country feel run lots and lots of sites that are not at risk and are good about ourselves, I think. So, the lessons that collected for a particular purpose? We have our own we’ve learnt are possibly translatable in many other liabilities coming out of our ears, I should say, and ways and, indeed, other charities do very interesting our own responsibilities. We were set up as a charity things, too, but I don’t think it’s a matter of just taking to safeguard—and in many cases to rescue—places at one proposition and plonking it down somewhere else. risk. As Simon has described, there’s been a I think the reason why the Trust is as successful as it succession of those. Back in 1895, it was vernacular is today is partly that long history, that record of buildings and tiny patches of green space—Octavia delivery and the ability to inspire people, which I have Hill called them open-air sitting rooms for the poor— to say I think is as important in the 21st century as it and then the country houses, then the coastline in the was back in 1895 when we were established. 1960s, and then, in the 1980s, great tracts of countryside, with Snowdon and Kinder Scout, and Q211 Damian Collins: Do you think demographics then more recently more what we call rather quaintly are on your side—a growing ageing population with “social acquisitions”: the Workhouse, or more spare money and the time to go to Sissinghurst and domestic buildings such as the Beatles’ houses. That’s Chartwell and everywhere else? our view as a charity of what we set out to do and I Dame Fiona Reynolds: Well, I certainly hope so. I’m think the two are quite different propositions. not sure about the spare money. We’re all waiting to see what impact the Spending Review has on the very Q209 Damian Collins: My constituency is in Kent, large number of supporters of the charitable sector. and if you look at somewhere like Dover Castle in my Actually, we’ve spent a lot of time in the last 10 years next-door constituency—I hasten to add I have not attracting young families as supporters, and very discussed this with the MP for Dover so I’ve no idea successfully, too. I think our aim is, frankly, to reach what his view is—that is a site you could see could everyone. The charitable trust was established for the be run by the National Trust probably just as easily benefit of the nation, not just for one segment of as English Heritage. I suppose I wonder what other society. So, we have a big challenge still in reaching advantages there are, because are there things you can more people. do as a charity and a trust that, given the way in which you are successfully commercially self-funding, could Q212 Damian Collins: One final question on money: actually mean there might be some merit in saying is it a recession-proof business? Have you found some of the larger, more popular sites that English income steady through the recession? Heritage runs could sit quite well within the National Dame Fiona Reynolds: Well, so far, yes. The last Trust? financial year was our best year ever both in Dame Fiona Reynolds: At the margins I’m sure that’s membership, in visits and in commercial profit from right and I’m sure there will be a discussion over the our shops and restaurants. This year is proving years about whether there are those kinds of options. tougher and it’s a whole range of factors including the But I suppose what I was trying to emphasise is that weather, which I have to say is a big factor in our we’re a very self-motivated organisation. We know business, but also I think that we’re definitely seeing what we are trying to achieve; we have a very clear belts tightening again at the moment; not in terms of strategy for the next 10 years. There are plenty of people coming, because the National Trust other things that would probably come higher on our membership subscription is fantastic value so people list of priorities of things that we needed to do than do come, but whether they spend or they bring taking on responsibilities that are already being very picnics, which, of course, we encourage them to do. well looked after—and are very successful in their So I think we are seeing things hardening a bit. I think own terms—by Government agencies. we have shown ourselves to be relatively recession- proof but the next couple of years I think we’re going Q210 Damian Collins: A slight change of subject: to have to watch things very carefully. do you think, looking at the way the National Trust runs and your experience of fundraising and attracting Q213 Paul Farrelly: Just on that point, not much is bequests, that there are lessons for the arts sector as a asked about English Heritage’s membership side, but whole in the way you’ve gone about that work? last week a couple of long-standing donations and Dame Fiona Reynolds: Gosh, that’s a big question. It subscriptions went in my latest—it was not a bonfire; would be rather presumptive of me, I think, to say so. it was a small funeral pyre of the debits. When Mrs All I would say, though, is that there is something Farrelly swings a less sentimental axe, I’m not sure very special about being a charity, which I love. I’ve that the National Trust family membership will worked in the NGO sector for nearly all my career, survive, quite frankly. So, are there any concerns and I think this ability to involve people through about the future of membership? membership and subscriptions, and actually also Dame Fiona Reynolds: Yes, very much so for exactly through volunteering, is a very special characteristic that reason. When people do take a good, hard look of this country. I certainly believe that it’s one of the at their direct debits, they are bound to question. We things that distinguishes us, and any Government need just hope, and there is some evidence at the moment to ensure that charities thrive in a regulatory that this is still absolutely clear, that we represent such cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:04] Job: 005777 Unit: PG02 Source: /MILES/PKU/INPUT/005777/005777_o002_kathy_HC 464-ii corrected.xml

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19 October 2010 Dr Simon Thurley and Dame Fiona Reynolds good value—£82 for a family membership for a year, really call for a major structural change to the way the which allows you free access to more than 300 sites Government organise their various bodies. Certainly, scattered throughout the country, so there’s always if you were to start with a clean sheet of paper now, somewhere near you. People do want to spend their you might not have English Heritage, the Heritage leisure time in beautiful surroundings. There does Lottery Fund, the Churches Conservation Trust, and seem to still be a real hunger for access to these various other bodies that happen to be in DCMS— beautiful places, so we’re just hoping that we can you might not have it like that. But what was certainly continue to provide that. But you’re right, this is a revealed during the extensive discussions which led to very difficult time we’re facing and we’re all going to the publication of the public bodies review was that be watching very carefully to see the impacts. structural change is extremely expensive and extremely time consuming. Fragmenting English Q214 Paul Farrelly: And English Heritage, how Heritage—taking off the properties—would cost £27 important is your membership aspect? million because, of course, all the services are shared Dr Thurley: Well, we’re about a million members within English Heritage. You would have to create calculated on the same basis as the National Trust two new bodies. It’s a very expensive activity. does that, which is obviously a quarter of what it has. Merging English Heritage and National Trust? Again, We’ve had a very rapid increase in membership. Over a lot of costs; relatively small savings. the last eight years, it has increased by 62%, which is So, what I think very sensibly the Government have a very steep increase. We are very keen on it because focused on is saying, “Look, what you should be obviously it is a way of getting secure income. Most doing is doing some rationalisation of who does people who sign up remain members for at least three what.” If you draw the Venn diagram between the years and that is guaranteed income for us. It is really various organisations, there are areas of overlap and the backbone of what we do. Three years ago, for the you should concentrate on getting those areas of first time, we made more money through membership overlap eliminated and strengthening the unique than we did through admissions at the gate, which was aspects of the individual organisations. I must say that an important turning point in terms of the structuring I do think not going for expensive and of our business. time-consuming structural change right now is the right decision. That does not mean that when the Q215 Paul Farrelly: Finally, how are subscriptions economy is doing better—when there is more money faring at the moment? around and there are fewer heritage problems out Dr Thurley: Well, I think Fiona has really covered the there—that might not be something that you might ground. We are still doing very well. Last year was want to return to. also the best year we’ve ever had. This year has been extremely good. Membership recruitment is still very Q217 Chair: Is that the view of the National Trust high. People think that it is very good value. No doubt as well? there are people who are having a sort out of their Dame Fiona Reynolds: Well, yes, in the sense that direct debits, but we haven’t noticed it. Membership we were obviously not in the mix because, gloriously is growing still very, very rapidly. independent as we are, we could watch from the sidelines on that. But again, I think the point is to Q216 Chair: You heard the evidence, or the tail end what end would restructuring take place. We have of it, that we took from the film industry, where the pointed out in the past that there are somewhat reduction in the amount of Government money anomalous structures at the moment in terms of the available has led to a complete reconfiguration—there composition of the various bodies, but at this moment, is still uncertainty about how it will emerge—of the in a very severe spending climate or real financial way in which the Government support film. Yet, in difficulty, to what end would any restructuring be? the case of heritage, it appears that despite some And I think the worry there is massive cost for little debate about separation of functions within English benefit at a time of great upheaval. So, in a sense, we Heritage and whether or not the Heritage Lottery Fund watch from the sidelines but we have no great hunger and English Heritage might come together, it looks as ourselves to see a massive rearrangement of the if there isn’t going to be great change in the structure. deckchairs. As I said, it is in our interests that there Do you think that’s a good thing or a bad thing? are some very strong and effective heritage bodies Dr Thurley: Well, I think that one has to organise the delivering for the Government and providing the tools that you have in government in such a way that framework within which the rest of us work. they are appropriate to meet the problems out there. I Chair: I think that is all we have for you. Thank you don’t think that there are new circumstances that very much. cobber Pack: U PL: COE1 [SO] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 43

Tuesday 26 October 2010

Members present: Mr John Whittingdale (Chair)

Dr Thérèse Coffey Mr Adrian Sanders Damian Collins Philip Davies Alan Keen ______

Examination of Witnesses

Witnesses: Ms Mhora Samuel, Director, The Theatres Trust, Mr Mark Pemberton, Director, Association of British Orchestras and Mr Danny Moar, Director, Theatre Royal Bath, gave evidence.

Chair: Good morning. This is the Committee’s third and things that really cost the money—go into a skip session looking at the funding of the arts and heritage, at the end of the run. I think there are some theatres and I welcome Mhora Samuel of The Theatres Trust, that are co-producing more, some theatres that are Mark Pemberton, the Director of the Association of touring more, but I think far too many plays—which British Orchestras, and Danny Moar, the Director of is all I can really speak about in this country—are the Theatre Royal, Bath. Adrian Sanders is going to produced for too short a run, given the upfront initial start. investment. There is another possibly fundamental problem with Q218 Mr Sanders: A very simple question for all of subsidies. I think some organisations have two you to answer: have arts organisations become too audiences. They have their audience audience that reliant on public subsidy? they are trying to develop a long-term relationship Mr Pemberton: I would say the answer is no. I cannot with, and then they have their funders, who may have speak for all sectors. When you refer to the arts, that’s a completely different agenda for the organisation, obviously fairly wide-ranging. Decisions on subsidy compared to their audiences. Then what can are made in relation to the needs of an individual complicate things even further, you could have the organisation. In relation to orchestras, it is fairly rare Arts Council wanting one thing, the local authority for the subsidy for an orchestra to be much beyond funders wanting another, and you have an artistic 25% of its income, and for the rest, around 55% it’s director, administrative director trying to run a theatre earning, and about 15% it’s raising from private with possibly three different audiences. It can confuse sources. So the subsidy provides a foundation on the brand, it can confuse where the organisation is which they build the earning potential and capacity to going. I’m a total supporter of subsidy, but there are draw in private support. So I certainly do not believe dangers attached to it, for sure. that they are overly subsidised. The balance is about right. Q219 Adrian Sanders: Are arts organisations going Ms Samuel: The Theatres Trust works with a range to have to rethink the sort of third/third/third existing of theatres—those working in the commercial sector, arrangement? the voluntary and amateur sector, the subsidised Ms Samuel: I think that we are now in an sector, and those operated by local authorities—and it environment where, indeed, there is a great deal of would be fair to say that in each of those different pressure on the public purse, and there’s obviously a areas, each places different emphasis on the level of commitment with this Government to localism and the public subsidy that they receive. Obviously in the big society and community and voluntary sector commercial sector and the voluntary and amateur groups participating much more in the delivery of sector, they receive very little, if any. In the subsidised local services, and that includes arts and cultural and sector and the local authority sectors, the public theatre provision. Now, within the context of that, subsidy that they do receive tends to go towards those groups traditionally have not been responsible improving access to theatre experiences and necessarily for some of the local authority-delivered supporting a network and infrastructure of theatres services, such as local authority-run theatres, but there and theatre organisations around the country. is now going to be, I think, a greater transfer of assets I would share Mark’s opinion that in those two latter from local authorities to some of those voluntary sectors, certainly the subsidised theatres have worked sector groups. I would hope that, in relation to the extremely hard over the last five to 10 years to shift third/third/third model, what we will see is a the balance between public and private and earned recognition that that transfer of assets also comes income, such that the majority are now probably about with, hopefully, a transfer of financial responsibility, a third/third/third in relation to the operational models one that comes with a small investment financially to within which that they operate. help them to start to kick-start the process. Mr Moar: I think the answer to the question is that some theatres have become too reliant on public Q220 Adrian Sanders: So you see a transfer of subsidy. I think the basic model of producing theatres assets, particularly with things like theatres and in this country is you rehearse for four to five weeks, exhibition areas being transferred to the third sector? maybe play for four or five weeks and then the Ms Samuel: Yes. I think the commitment under the physical production—the set, the props, the costumes Localism Bill will certainly be looking to local cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Ev 44 Culture, Media and Sport Committee: Evidence

26 October 2010 Ms Mhora Samuel, Mr Mark Pemberton and Mr Danny Moar authorities to making transfer of their assets, and I Q222 Alan Keen: Have you any ideas on how that would suggest that the voluntary sector, whilst it’s could be improved to take advantage of that? very prepared and willing in some cases to take on Mr Moar: If you’re looking at the funded theatres those responsibilities, is not necessarily prepared as that need funding, you make it a condition of their financially as the Government might expect. It would funding—or one of the series of conditions of their be good to see investment following the transfer, if funding—that they have to have certain numbers of indeed that is the ambition. touring weeks beyond a run at home base. There are Mr Pemberton: Obviously, an orchestra is an some shows, big shows at the Olivier at the National extremely different organisation to a theatre, the Theatre, for example, that just couldn’t tour, and that’s bricks and mortar and the ability to sweat that asset of course fair enough, but there are more shows from that you have. The primary cost for an orchestra are the National Theatre that could tour than currently the musicians themselves. Sadly, unlike football, there tour, for sure. I think the same for, particularly, the are not transfer fees for musicians and they are not Donmar and the Almeida, because they’re fairly small financial assets. It costs a lot of money to have that theatres, so it could only be done by a condition of number of people. Of course, when Mahler wrote a touring. What’s interesting, when you look at the symphony, that number of musicians are required to shows that are touring from the National, are touring be on the concert platform. Unlike theatre, orchestras from the Donmar, they’re shows that are being cannot choose to do three or four-handers to slim their directed by those organisations’ artistic directors and costs. The symphonic repertoire, the operatic they have control, obviously. But it suggests that it’s repertoire, will simply necessitate that number of not profoundly in the DNA of those organisations, that musicians, and those carry costs, of course. It is very they should exploit their work further, because visiting hard for them to see. directors, visiting designers who would be forced to Now that we have had some certainty, just within the have to design shows that could have a life beyond last half hour, from Arts Council England about at the home base, aren’t obviously being persuaded of least its initial first year in terms of what cuts will be the need and importance of doing that. imposed on organisations, it’s difficult for an orchestra to see where savings can be made when they’re Q223 Alan Keen: What could be done? already working extremely hard to raise money from Mr Moar: All I can do is repeat myself: you make it private sources and to earn income through concerts, a condition. The Arts Council gives the National touring and broadcasting. Theatre £X million and says, “We’re giving this on the condition that you are going to deliver X touring Q221 Alan Keen: It was an interesting point that weeks a year.” To me, that’s the only way. Danny made about the fact that the rehearsal time is Alan Keen: Yes, so the Arts Council for England a fixed cost, but there’s not enough advantage taken should— of the benefits of that long rehearsal period. I always Mr Moar: Yes, or whoever is funding those imagined that there must be quite a bit of co- organisations makes it a condition of their funding, ordination. Is there something that could be done absolutely. about that? There’s no body presumably that can talk to other theatres—apart from those producing one Q224 Alan Keen: What about you, Mhora? play and obviously trying to push their own play that Ms Samuel: I can’t particularly comment on touring they’re putting together—and help co-ordinate that necessarily, but one of the things I can comment on is and help to take advantage of having spent four weeks the infrastructure of theatre buildings into which that in rehearsal? product will tour, and it would be fair to say that it’s Mr Moar: I think it has to be down to the important that what is maintained is a healthy ecology entrepreneurial instincts of individuals running of different sized, differently managed theatres such theatres to see if they can sell on the work that they that a diversity of product can go into theatres of produce, but I think it also can be down to funders to either proscenium style or apron stage or thrust stage. make that a condition of the grant that they give. I Indeed, certain touring productions only become think this links entirely in with best audience commercially viable when indeed they tour into development practice. Best audience development proscenium arch stages, and this does require practice is about getting the best possible work to as producers then to restage work that they may have many different people as possible, and if you look at produced with a very different form of staging in the some of the fabulous work of the National Theatre, first instance. the Donmar, the Almeida, the Royal Court, not enough of that work tours out into the regions. Some Q225 Alan Keen: What about War Horse, for does, and at the Theatre Royal Bath we’re having the instance? Presumably that was just intended for the Donmar’s King Lear, and we have the National National and then it was so successful and was such Theatre. But not enough is done to take the very best an attraction that commercially the West End wanted of what there is further afield outside home base, and it. Is that an example of where, had there been that has to have financial benefits for the originating planning in advance, then— theatre, because they’re amortising their upfront Mr Moar: That’s an example of a show that I think is production costs over a longer period and it means too huge to readily tour around the country. It’s that people the length and breadth of the country get playing in the West End at the moment, of course. It access to the best work. I mean, it ticks so many could play two or three very large touring houses— boxes, it’s just not true. Edinburgh Playhouse, for example, or the Bristol cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 45

26 October 2010 Ms Mhora Samuel, Mr Mark Pemberton and Mr Danny Moar

Hippodrome—for five or six weeks at a time, but I though Ayckbourn and Noel Coward are both think there probably are plans to do that with that geniuses. It means giving them a range of work. It show, because it’s a wonderful show that all means chasing the best shows that we can on the way generations love. But that’s probably one of the shows into the West End or out of the West End, and that would be more tricky to do the kind of tour I’m producing shows ourselves that we tour around the talking about. It could never come to Theatre Royal country or take into the West End. But Bath has Bath, for example. We’re just not big enough. But the always been blessed. It’s a beautiful theatre in a National has other shows, and other theatres have beautiful city, and it’s a relatively affluent city. We’re other shows, that could tour very easily. a big enough theatre that we can make a lot of money when we have a hit, whereas some of the smaller Q226 Alan Keen: Yes, it’s getting the balance right, repertory theatres don’t have that kind of capacity. So presumably, between private enterprise and the public I think other theatres could learn from the directness sector funding, isn’t it, and it’s not easy to do? of relationship with the audience, but we have some Mr Moar: I think that’s an interesting point. I think assets that other theatres just don’t have. one of the things I would find frustrating if I was a funder is to look at a show like War Horse that Q229 Damian Collins: But without asking you to absolutely never, ever would have had a life without name names—or you’re more than welcome to if public subsidy in its first incarnation, and then seeing you’d like to—do you think you can take your model how that has been exploited. Who is making all the to other large regional centres, where the current money? Who is keeping all the money that it’s making subsidised theatres may be struggling, and say they through its success in the West End? I think probably could run a more commercial operation along the lines the National Theatre have underwritten some of that that you do? risk themselves and therefore are doing pretty well out Mr Moar: Yes. But the shows that we produce of it, but there are a whole series of other shows ourselves generally have stars in, which means that currently running in the West End that would not be other theatres want to buy them and go into the West running in the West End if they hadn’t had their initial End. So you need to have a commercial producing life in a subsidised theatre. capacity and there is a big difference between I’m not absolutely convinced that the subsidised managing a theatre and producing commercial plays. sector knows best how to protect its long-term They are two different jobs. You would need someone financial interests. If it’s underwritten a fantastic show, that could do both of those things. But the answer why should it be that a commercial management takes to your question is yes in terms of the directness of all the profit? Yes, they’re taking some risk, of course, relationship with audience. Absolutely. but I’m again not quite convinced that enough money is flooding back into subsidising those overheads, Q230 Damian Collins: Do you think the model can back into the public sector, given that they underwrote work for smaller theatres as well? the shows in the first place. Mr Moar: It’s harder. It’s definitely harder. When we produce a play our business model is very simple. By Q227 Alan Keen: If you could write the paragraph the end of a two- or maybe three-week run in Bath, in our report, what would like us to say? we would hope to have paid off all the initial pre- Mr Moar: It’s hard, because you don’t want to production costs and the running costs in Bath. So disincentivise commercial management for taking when we take the show on tour into the West End, all risk, but I read somewhere that the Film Council, you are worrying about are the ongoing running costs. when it existed—or if it still does exist—when they It doesn’t work all the time, but if it does work, that fund a film and it went into profit, they got some of can be very, very profitable. But you need to have a the money back. I think there has to be some theatre that in those two or three weeks can make mechanism that if a show that’s been created in the enough money to pay off all those upfront costs. subsidised sector goes into the West End, goes to Broadway, goes on a huge national tour and makes a Q231 Damian Collins: There are some people who lot of money, terrific: some of that should go back to are concerned that having theatres that are self- the stake that underwrote it in the first place. There funding, self-financing, live from their takings, are would need to be a mechanism to do that. I don’t less likely to want to take artistic risks with plays or know what it is, but it can’t be so difficult. productions. Is that something you are conscious of? Alan Keen: Thanks for your help this morning. Mr Moar: No. Not at all. A solid funding base means that you can take risks. We have a whole range of Q228 Damian Collins: To Danny Moar again, your not-for-profit activity in our organisation. We have a theatre seems to have committed the terrible crime of children’s theatre—a theatre dedicated for children putting on productions that people want to come and and their families—that is a base for a large education see. Do you think there’s any lessons broadly that department. We have a studio theatre which takes lots theatres can learn from your experience? of risk in terms of its programme. Both of those Mr Moar: Well, we do put on some that some people elements of our organisation lose a lot of money every don’t want to see as well, but yes, because we don’t year, but they are subsidised by our main house have any subsidy, we have a very direct relationship programme and by the plays that we produce and tour with our audience, and that absolutely doesn’t mean to other theatres. So the fact that we have money giving them a diet of Ayckbourn and Noel Coward, means we can take risks. They are the same: one because they’ll quickly get bored with that, even permits the other. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Ev 46 Culture, Media and Sport Committee: Evidence

26 October 2010 Ms Mhora Samuel, Mr Mark Pemberton and Mr Danny Moar

Q232 Damian Collins: I saw at the children’s Ms Samuel: I have no concern where, for example, theatre you had a production of Stick Man last week if a theatre is a charity and is set up with charitable which sold out. objectives, and anybody that governs that charity has Mr Moar: It is not a big theatre. But absolutely, yes. to make sure that anybody that invests in it is not going to particularly sway the way in which that Q233 Damian Collins: Really popular with the particular charity is operating. But I do have some children in the Collins household certainly. concerns where the private sector may feel that it does Mhora Samuel, with regard to the evidence submitted have an influence in some of those artistic decisions. by The Theatres Trust, where you said “there is I think care and caution are required in the widespread dissatisfaction among American theatre management of transition for some organisations for practitioners with a system of private philanthropy which it will be totally applicable, moving towards a which they feel does not deliver the depth or breadth more private sector led investment and private of artistic excellence enjoyed in Europe”, do you have philanthropy-led models. concern about a model in British theatre where there is more private investment, more private management, Q236 Damian Collins: Do you think, though, in and that would damage the quality of the artistic terms of artistic merit, it works the other way as well: output? if we lived in a world where there was only public Ms Samuel: I don’t have a problem with private funding, people would just put on plays and management. As I say, in the commercial, the amateur productions that the Arts Council, or whoever, wanted and the voluntary sectors, in effect it is private to fund, because that is where the money comes from? management. I think what Danny has said though Ms Samuel: Perhaps, but not entirely. I think that you around the fact that the more money you have will find innovation and risk taking across all sectors, available, the more you have the opportunity to take whether it is from a very small youth theatre operating risks with is a very good point. in a small arts centre in an area where there are high indices of multiple deprivation, right the way through I think also one of the big issues is the transition from to the commercial sector where the end game is to put what we have now in terms of the business models, on a large, well-performing musical in the West End. where the majority are subsidised from the local You will see innovation and risk taking in those areas authority, particularly the receiving theatres—not but, sadly, you will also see some failures. solely producing but receiving theatres—and theatres that are part of arts centres where there is a mixed Q237 Damian Collins: economy of arts activity, where indeed quite a lot of Just going back to the written evidence submitted, on the section on the role of the the activity is related to social benefits and working lottery and lottery funding for capital projects, The with young people or people in care. With those types Theatres Trust listed a series of priority areas, and one of models I think you are going to find it much more was that “capital projects for theatres would address difficult to raise interest from the private sector in issues related to climate change”. I just wondered terms of being able to operate and run those types of what was meant by that. centres. So there does need to be transition but there Ms Samuel: This is one of the big challenges ahead also needs to be recognition that for some operations for theatre buildings, insofar as many of them will be that model does not work at all. facing cuts and will have to manage their overheads very, very carefully. I would like to see a situation Q234 Damian Collins: But the thrust in your where the lottery is looking to put more into evidence seems to suggest that on Broadway for maintenance and repairs, particularly where those example you have less innovation, less interesting maintenance and repairs can help support lower productions and that may be a reason why more UK energy use within the building, and better use of other productions are going from the West End to resources such as water and waste management. I Broadway, because they have a theatreland that is think that theatres also have a huge role to play in the driven by private money and there is less risk. Is that public’s perception and understanding of the impacts your concern? of climate change upon us as a society. I think that Ms Samuel: It is not a concern so much, but I do because theatres are in a unique position as centres of think it is important to note that quite a lot of the their communities, they are in a position by their very theatre product, the plays and the dramas that go on own direct action to show what can be done in the in the West End are indeed, as Danny pointed out, household or by the private individual. So my produced through the investment of the public sector, emphasis would be rather that the lottery looks at and in most cases it is that work that transfers over to helping to keep theatre buildings well maintained; Broadway. So I think it is important to note that, and keeps them energy efficient; keeps the operating costs that is what the US does not have. under control; and so releases money for work that can be done on stage and with those local Q235 Damian Collins: But do you have a concern communities and spreads the message. about theatre in the UK being more driven by private investment, private philanthropy, and theatres having Q238 Damian Collins: I wasn’t certain if it was to raise their own money from their own meant that if we had a dry summer we should get communities? Do you have a concern about the theatres to put on The Tempest to drive some rain out. impact on the artistic merit of the product if that I think everyone would agree that making buildings happens? more efficient, if that means more money for cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 47

26 October 2010 Ms Mhora Samuel, Mr Mark Pemberton and Mr Danny Moar productions, is a good thing. But I would be is the most important thing. Whether the artist chooses concerned about theatres promoting awareness of to go down a political route or whether they choose climate change: to me that sounds like a political role to go down something that is much more personal, I for theatres and gets away from their core purpose. I think is their choice. do have concern about whether that is a distraction from the core function that theatre should be playing Q241 Philip Davies: Is there not a certain amount of in the community. snobbery amongst the arts world, that anything that is Ms Samuel: I think you can’t stop artists from popular is somehow not worthy, and that there is a wanting to communicate the way in which society is direct correlation between how few people go to responding, reacting and behaving towards large and something and how worthy it is within the arts world? very serious happenings in the world. I can’t really Mr Moar: I think 20 years ago you might have had a talk particularly for the artists—I am here for the point. I remember working for a subsidised arts buildings today—but there are many organisations out organisation 20 years ago, and there was exactly that there who are very much supporting the work of feeling that we don’t want to put on a play that too artists who feel that their artistic practice is absolutely many people are going to come and see because the being led by climate change issues. funders won’t like it. Having worked with top theatre directors—Peter Hall, Richard Eyre, Thea Sharrock— Q239 Damian Collins: I must say that, with respect the best theatre directors working in this country to them, they must do that in their own time. I am not today, they love nothing more than a full house: really, sure the role of public subsidy of theatre should be to really, really. I think if that was the case, that is really promote awareness of climate change, worthy though no longer the case. No one of any substance gets off that may be. on empty houses. There is nothing more demoralising. Ms Samuel: I think you will probably find that it is That is not to say that great theatre artists don’t want the private sector as well as the public sector that is to engage and stimulate and present something new also contributing. and different, but no one likes empty houses. That is Damian Collins: Well if they are paying for it, that’s not any kind of badge of honour for anybody working down to them. in the arts today. Mr Pemberton: In terms of orchestras, obviously for Q240 Philip Davies: Warming to Damian’s theme, decades now there has been a mixed economy of do you not accept that there is a world of difference— wanting to fill the Festival Hall for a Mahler cycle because I didn’t get any great feeling that you did while also being delighted when a film studio comes understand that there was a world of difference— knocking and says, would you do the soundtrack for between private people putting in their money to Lord of the Rings? So orchestras are willing to do pursue their own political views and the arts sector, orchestral work, but obviously there is still a desire to like an alcoholic reaching for the meths, trying to get pursue excellence, whatever it is. more and more public money in order to promote their own political views? Do you not accept that there is a Q242 Chair: Mark, you said at the beginning that world of difference? Do you not see anything you had just received the news from the Arts Council, remotely wrong with wanting to get more and more the headlines. What is your reaction? What effect do public money in order to promote the political views, you think that is going to have on the sector? whatever they happen to be, of the person in charge Mr Pemberton: At the moment the only certainty we of the theatre? I find it absolutely bizarre. seem to have is that in this first year the cut will be Ms Samuel: I think—sorry, Danny. 6.9% rather than the 10% that arts organisations were Mr Moar: I just don’t think that is happening. I asked to budget for. In some respects that will come humbly disagree with Mhora. There are probably one as a relief. What we don’t know is what will happen or two plays about climate change but they are not big from 2012 and beyond in terms of which organisations on the radar, and I can’t think about them. I agree with will retain their funding, because it would appear that both of you. I think what you are saying is that what there will inevitably be some casualties. That will be works on the stage is what is exciting and stimulating a matter for Arts Council England to make that for an audience, not a play that is peddling one or decision but obviously in terms of provision of other particular political view. I absolutely don’t think orchestras across the country, we would obviously be it is the job of theatre to deal with climate change any keen to retain those within the funded portfolio. more than it is the job of it to deal with any other particular social issue unless it is motivating to the Q243 Chair: Right. How many are there within the playwright to write about that. I don’t think people funded portfolio? give money to theatres to promote their particular Mr Pemberton: I think that is in my evidence. In fact views. There are boards of theatres, or the artistic I made a mistake in this. In Arts Council England director, who will decide the particular artistic policy. certainly there are eight symphony orchestras and I just don’t see how that would happen. It doesn’t seven chamber orchestras—smaller orchestras. happen in this country. Ms Samuel: I think that in the historical relationship Q244 Chair: Fine. How many are there in London? of the private sector to theatres and arts organisations, Mr Pemberton: There are four orchestras who are there has been a recognition by the private sector that based in London that are funded by Arts Council they contribute to the overall well-being of that arts England, but their funding is not necessarily for them charity. As Danny says, it is the artistic impetus that to perform in London. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

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26 October 2010 Ms Mhora Samuel, Mr Mark Pemberton and Mr Danny Moar

Q245 Chair: It has been a debate that has gone on and we would obviously hope to see that maintained for a long time as to whether or not we actually need during this difficult time. four big London orchestras. Mr Pemberton: Yes. The key to recognise is this Q250 Dr Coffey: Mark, you said that there are other comes around fairly often, the five symphony orchestras which are subsidised, effectively by Arts orchestras—because you obviously also have to Council England, that belong to ballet companies and include in that the BBC Symphony Orchestra, but opera and similar, is there some opportunity there for obviously the BBC Symphony Orchestra has its own some cross-fertilisation in using resources? very specific role and the BBC’s not relevant to this Mr Pemberton: Difficult, because of course it’s all discussion; its primary role is the delivery of around how they schedule, and you will inevitably get broadcasting. The funding for the Royal Philharmonic clashes. You will get them wanting an orchestra at the Orchestra is to enable them to work outside of same time. So it’s very difficult, you can’t really share London, as with the Philharmonia, which has an orchestra across different opera companies, residencies in towns as such Bedford and Leicester. especially when they are in different parts of the So although it looks like it’s all going into London, it country. The Vienna Phil is a symphony orchestra and is to enable those orchestras specifically to get out to it does the opera, but it just happens to have the other parts of the country and also to tour resources to the equivalent of two orchestras to enable internationally and therefore be cultural ambassadors it to do so. So it is very hard to see how you could for the nation. generate any savings.

Q246 Chair: So you would urge the Arts Council Q251 Philip Davies: Mark, in your written evidence to continue? you made it clear that you saw the funding of the Mr Pemberton: Since they are able to bring audiences Arts Council as essential, which may or may not have into the concert halls there is clearly an audience for something to do with the fact that they fund eight a rich mix of orchestral provision. symphony orchestras and six chamber orchestras. Q247 Chair: But you suggested earlier you did think Mr Pemberton: Seven—my correction. there would be casualties among orchestras? Philip Davies: All right, seven. But I don’t know if Mr Pemberton: There may be, as there may be across you saw our first evidence session that we had when all the art forms. It will be a matter for Arts Council our colleague, Tom Watson, wiped the floor with the England to make that decision. Chief Executive of the Arts Council. Mr Pemberton: Monstered, I think, might be the Q248 Chair: Is the same the case for theatres? appropriate word. Ms Samuel: I think that some theatres will be able to Philip Davies: Would you accept that the Arts manage the transition. For theatres that are located in Council do waste money on an industrial scale? the poorer areas of the country where they are also Mr Pemberton: That really is a question for Arts facing local authority cuts in some cases of 100%, and Council England. Alan gave you as robust a reply as where indeed they don’t have the business capacity to he could in the circumstances when at the time he raise income from the private sector, I fear that there didn’t know what the funding coming their way was will be casualties. It is one of the reasons why I would likely to be. It is a matter for Arts Council England. suggest that the Arts Council, insofar as it has We believe that there needs to be an arm’s-length flexibility, takes on board continuing an infrastructure body that makes the decisions in terms of what of theatres, and theatres within arts centres, across the organisations are funded. I did put in my written country, and looks to target funding to those areas that evidence the fact that there is a different model have the least capacity to survive the forthcoming operating in Scotland with national companies that are years. funded directly by Government. But orchestras, apart Chair: Alan, did you want to come in? from those that are within an opera or ballet company, might not be perceived as national companies, Q249 Alan Keen: Could I ask Mark, what do you because they tend to be located in a specific think the BBC are going to do with the pretty drastic metropolis. cuts in their funding over the next five or six years? How’s that going to affect the BBC orchestras? I Q252 Philip Davies: But if I can just try and know you don’t know but— extricate you from the fence for a second, you say it’s Mr Pemberton: I really don’t know. It really will be nothing to do with you, it’s to do with the Arts a decision for them. Clearly there will be funding Council. It’s not just to do with the Arts Council pressures. I think that the performing groups have because the more money the Arts Council waste the made a very good case for the role that they play less money there is to give to things like orchestras, within the BBC, and their ability to take the BBC presumably, so are you saying that you specifically out into venues across the country. So they have a or other people generally within the arts world never performing role, a live role, as well as a broadcasting challenge the Arts Council about what on earth are role. Of course, you only have to look at the Proms, they doing spraying money all over on ridiculous which year on year seems to gain yet a bigger things when it should be going to the front line? Does audience, both in the Albert Hall and globally through this challenge never come, or is everyone so petrified television, radio and broadcasting. It’s just testament of retaliation from the Arts Council that nobody in the to what a fantastic resource they are for the nation, arts world will ever challenge them? cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 49

26 October 2010 Ms Mhora Samuel, Mr Mark Pemberton and Mr Danny Moar

Mr Pemberton: We know that they have made Q255 Chair: The Government is obviously looking efficiencies, which would suggest therefore that there to try and encourage more private sponsorship, were efficiencies to be made. They clearly have a philanthropy, to some extent to meet the gap that’s challenge to make themselves even more efficient. going to open up. To what extent do you think there Mr Moar: I think there are two prongs to your is scope for greater private money coming into question. Are the administrative structures of the Arts orchestras and theatres? Council efficient or are they not? They probably aren’t Mr Pemberton: From our perspective, the efficient enough. But I think the other point to your development staff at our orchestras are running like question is, are they funding pointless programmes hamsters on a wheel to pursue the private money that and projects? I think that’s a more interesting question has already been drawn into orchestras. When one because there’s more money spent on projects than hears around redoubling efforts to raise more money there probably is on their administration. We’ve only and bringing in an American culture of giving, that’s had a couple of shows that have received Arts Council an incredibly ambitious project to set the arts and funding, for whatever reason. What I was struck by would take decades, to revolutionise the culture that was the remorseless and obsessive preoccupation with have. We have to be very grateful to those who are what they would call audience development, which already giving to the arts. Yes, there are adaptations basically means making people who aren’t to the gift aid system that would make it simpler to fundamentally interested in the theatre, insofar as you attract donations. There has been a long-standing can, come and see your show by any means possible. argument around lifetime legacies and the role that I think one of the real problems of the funding system those can play. You also have to remember that the in this country is they find it, or the system finds it, Treasury may not be minded to give away a lot of tax very hard to accept that it’s okay not to like the arts. money at the moment. So although we are aware of It’s okay not to like the theatre, it’s okay not to like the warm words about changing the system to make music. All these things are fine, and it’s a testament it easier, it may prove difficult for that actually to to human diversity that some people like the theatre happen. But certainly the idea that orchestras are not and some people don’t. I think that’s what the funding working as hard as they can to raise private money system has spent so much time doing, chasing after can be robustly challenged. new audiences who, for perfectly legitimate reasons, Ms Samuel: I think incentives is a very interesting are just not interested. There is a terrific guy called topic, and obviously the system in the US is very Jonathan Church who runs the Chichester Festival different. One of the things that might be worth Theatre, and he came to Chichester from Birmingham revisiting is a scheme that used to run where the and said what a joy it is putting on plays for people public sector used to match the private sector, so that who want to go and see plays. I think that’s absolutely there was a reward, in effect, for the private sector fine. I think the Arts Council needs to get off its guilt playing a role, which was seen also then through the trip about how we need to somehow spread the word, way in which the public sector gave its funding to a and focus more on just diverting money to the front particular project. I think it would be quite interesting line as you say and putting on good shows, concerts, to revisit that model—it no longer really exists— whatever. effectively matching private sector investment with public sector investment. Q253 Philip Davies: But do the arts organisations My other concern, which is not so much to do with challenge the Arts Council about these things? the private sector itself but is to do more with VAT Mr Moar: I think they find it hard to challenge them more generally, and is another form of taxation, is that because they are so dependent on them. It would be when the VAT rate rises again, arts and theatre groups very hard for anyone who is very dependent on the will have to deal with increased VAT charges and they Arts Council to be truly critical because they’re are also then in a situation where they are looking for worried that they will somehow be seen as disloyal additional income, and so the effect of one may indeed and their funding will be cut. That is absolutely an well balance out the effect of the other. One of the occupational hazard of being funded by the Arts things I would also ask to be considered is the VAT Council. You don’t challenge. treatment, particularly in relation to repairs and renovations, of theatre and performing arts buildings, Q254 Philip Davies: That is very helpful. One final and also in relation to performing arts companies. thing, Mark. I think in an answer to the Chair, you Mr Pemberton: Could I just add a point about the said that some of the public funding that is needed for American system? Obviously if I give a gift to an the orchestras is to enable them to tour abroad. If an American orchestra I can offset that gift in its entirety orchestra is going to tour abroad, should that not be against my tax bill. That’s the difference; we don’t paid exclusively by the people abroad? have that. If you then look at how much private Mr Pemberton: Yes, it is, of course. What I mean is money is going into an American orchestra, and is that the funding provides the infrastructure, the being offset against tax, that is the equivalent of foundation upon which you build the edifice that is subsidy. So, in fact, you could argue that an American the orchestra’s earning potential. The public subsidy orchestra is as subsidised as a British orchestra, it’s does not go towards international touring, that is a just that you do it differently. Instead of collecting the commercial engagement. Absolutely, that is the way tax and then doling it out, you just don’t collect the in which they can earn a living. But clearly the tax in the first place. subsidy will provide the base upon which the Mr Moar: I can only speak for our theatre, but we’re orchestra can go and pursue those opportunities. always going to make more money from producing cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Ev 50 Culture, Media and Sport Committee: Evidence

26 October 2010 Ms Mhora Samuel, Mr Mark Pemberton and Mr Danny Moar plays, transferring plays into the West End, than we’re they’re facing social challenges in relation to engaging going to make from private individuals. We get some, people in their society. It may work in metropolitan but not much. We got money towards our education and urban centres, but it may not necessarily work in work, and did towards our recent refurbishment certain wards in those urban centres and it may not programme. But I agree, I think people are trying hard work in rural areas as well. That is just a note of in the subsidised sector to do that anyway, and I think caution. there are quicker ways of making more money. I think Chair: All right, great. ticket pricing, something we haven’t really talked Q259 Dr Coffey: We focused a bit on gift aid and about, is crucial. I think ticket prices for sure are too perhaps the tax relief that people can get—the higher low. I think for sure they could be higher, and rate taxpayers. There are other kinds of community discounts could be targeted. You only have to look at investment tax relief that could be done and shows that are transferred from subsidised particularly on building infrastructure. Have your organisations in London to the West End, so it’s organisations gone about looking at those schemes exactly the same show, and the prices at the and what they could offer? For example, we were originating subsidised theatre will be £10 or £15 less talking earlier about the BBC: BBC orchestras are than a commercial producer would charge in the looking at a potential new arena for them, but it’s West End. going to cost tens of millions of pounds and you are I think there are quicker, easier ways of making thinking, in almost a mutual spirit of saying, “We’ll money—it’s very hard work raising from private chip into the BBC’s future orchestra space”. It could individuals, having tried. I think there are other ways be one way of doing it. Is that something that’s arisen that arts organisations can do it that will hit the bottom in your areas? line much quicker. Mr Pemberton: I’m not a fundraiser but I don’t imagine that the fundraisers working in my member Q256 Chair: In terms of incentives, you both talked orchestras are ignorant of every single source of about tax breaks. Arts & Business make the case that money that they can potentially tap into. Certainly we some of the incentives are nothing to do with money. bring our fundraisers together twice a year for Far too often private donors who give money write networking and sharing best practice, and they are the cheque and that’s it, they don’t hear anything. Far eager to communicate to each other the leads that they more could be done to reward them and make them have found, particularly around some European feel special. To give you an example: if you have a money and gift aid and so on, that might be to their star production with Patrick Stewart, do you give a benefit. Yes, I’m sure that they are aware of it. I party and invite the major donors to come in and talk couldn’t tell you for sure, but I could certainly find out to Patrick Stewart and meet him? Or indeed come in if anyone has been tapping into that specific source. and meet the visiting conductor or the first violinist, Ms Samuel: In relation to capital projects, I think we or at least feel that they have some special access? face a really interesting time in relation to the Presumably they love classical music or they love planning system and the way in which cultural theatre, and that’s the kind of incentive which I think policies are once again having to make their case isn’t happening enough and probably would generate within it. The reason why it’s very important that they far more support. do is because there is, in terms of the private sector, Mr Pemberton: I think it’s fair to say that that a greater stress on developer-led propositions around happens day in day out in the concert halls and no housing and regeneration going in towns and cities doubt in the theatre. across the breadth of the UK. We are moving to a Chair: It’s interesting, isn’t it, because a lot of different agenda, with localism and the big society. I organisations which—certainly we heard from Arts & think it’s about placing the value of culture into the Business that that is not happening but you are public policy framework, such that developments that confident it’s happening— do come forward continue to invest in cultural Mr Pemberton: I am absolutely confident, I go to projects. I think there is obviously going to be huge those parties. competition within the public sector for other projects Q257 Chair: All right. If I write a cheque to the LPO which may also suffer from lack of funding from the (London Philharmonic Orchestra) then I shall be feted current cuts. But I think it’s important that we place by the first violinist the next time I arrive? cultural value at the heart of public policy as it relates Mr Pemberton: I think you should be, yes, to the planning system as we go forward. I think that particularly in those self-governing orchestras, where will make a huge difference to ‘developer the musicians know full well it’s in their own best contributions’ from the private sector continuing to go interests, they will be there in the interval and into the arts and theatres. afterwards. Q260 Mr Sanders: Mark said something earlier about Chair: All right and you do that in Bath? orchestras, and if there’s a certain piece you would Mr Moar: Every week, yes, yes. not be able to perform unless you had the number of Chair: I can come and talk to the cast and get a musicians that there were. Does that mean that backstage tour— orchestras should be satisfied with only really Mr Moar: For the right amount of money, I am sure. performing works that are possible within their Ms Samuel: I think it is worth pointing out though means? that some arts organisations are not in a position to do Mr Pemberton: Wouldn’t that be a terrible shame, to that, because they’re not working with headline artists lose repertoire? To see it performed in other countries and they are working, as I say, in communities where and to be unable to do it in the UK would make us cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 51

26 October 2010 Ms Mhora Samuel, Mr Mark Pemberton and Mr Danny Moar look cheap and lacking value. I think it would be an two could concentrate on ones that perhaps don’t need absolute shame, and these great masterworks, whether over 100 musicians. old and new, require performing to keep them alive, Mr Pemberton: But that’s why we have chamber and that’s the business that orchestras are in. orchestras who do perhaps concentrate on the smaller arrangements. Q261 Mr Sanders: Can I also ask you—because Q263 Chair: Obviously you do have chamber there isn’t anybody on the panel here who isn’t in a orchestras, but you do still have a large number of sort of arts organisation that doesn’t have a building— orchestras, all of whom you seem to believe must be but the third/third/third model, how does that work for able to perform Mahler. an organisation that perhaps doesn’t have a building Mr Pemberton: Because there’s an audience that or perhaps doesn’t get involved in ticketed events but wants to attend concerts of Mahler. perhaps goes to festivals? How does an organisation Chair: But in the present climate it might be but like that survive in an austere climate? maybe we will have to make do with two orchestras Ms Samuel: It’s extremely challenging, and it comes that can perform Mahler. down to the asset base and the reserves position of the Mr Pemberton: Poor Mahler gets the cut. organisation. In some cases those organisations will Chair: He shouldn’t have written works that require have reserves that they will be able to call upon. But so many musicians. I do think again that one has to look at the way in Mr Pemberton: Unfortunately you have to balance which the funding system is directed towards a range that with the box office potential, that in an of possibilities with regard to the future of the arts in anniversary year there will inevitably be quite a lot of this country. One of those that I would suggest is that concentration on the Mahler symphonies and they do it enables organisations to build up reserves and build attract a very good audience. up their financial resilience and the assets that they Alan Keen: I support John’s suggestions of access for can indeed call upon. It could be that they operate donors, but it did remind me of this Committee’s much more in relation to areas where they could be famous investigation into the Royal Opera House in trading, where they might not have in the past, where 1997 when there were a lot of findings from the they might wish to exploit some of the products that inquiry, and one was that certain people only went they create; which may not be building-based or through one entrance and other people didn’t have building-received, in the sense that visitors are not access to that. That had gone too far and that was required to visit the destination in order to consume corrected afterwards, but it’s still a good idea. it. They may well be online. They may well be Chair: Damian? through digital means. But I do think that it’s why it’s Q264 Damian Collins: Yes, just a couple of points. important, like any small business, that investment is Just on buildings, do you think there’s a danger both available to enable them to build their assets and to for theatre and orchestras that we’re supporting too grow into the future. It’s when that’s not available, many buildings and that a lot of the cost is lost in when that tap is turned off, that it becomes very hard. maintaining a fabric for performance but they may not Mr Moar: There are subsidised touring theatre need as many performance centres as there are and companies who, by their very name, don’t have an more companies can tour and just use buildings on a actual theatre base. But increasingly those companies temporary basis? are coming to co-production arrangements with Mr Pemberton: In terms of concert halls I wouldn’t touring houses, like the Theatre Royal Bath, as an think we are richly endowed with concert halls across example. In other words they can base themselves at the country: two main venues in London, one in a theatre, their work will open there and then they’ll Manchester and two in Glasgow. We’re not talking tour out, and all sorts of savings can then be made, large numbers of venues, and of course in terms of because you probably don’t need a marketing manager concert hall provision it has to be acoustically correct in the theatre and a marketing manager for the touring for the orchestral repertoire. company, you don’t need two finance directors, and Mr Moar: I think it’s a very interesting point. There’s so on. I think probably if you said to English Touring a company called Ambassador Theatre Group who Theatre or Headlong Theatre Company, our two main have just taken on a vast chain of theatres around the subsidised touring theatre companies, “We’re going to country and their biggest problem, and it’s public cut your subsidy heavily,” that’s what they would do. knowledge, is that they have to find the shows to fill The absolute obvious thing for them to do is to base them, particularly the big musical houses. You look at themselves in a theatre and tour their work out. Manchester and you have the Manchester Palace, the Mr Pemberton: I want to say that an orchestra is Opera House and the Lowry; there’s probably one too completely different. The majority are touring many theatres in Manchester of that scale. But then organisations, but some of our members, a few, have also there are new regional theatres, smaller theatres their own building, and of course the opera companies that can take plays as well as musicals that are doing are building based. really well. I don’t know the answer. It’s a difficult question. I think it depends on which part of the Q262 Chair: Just following on from a question country you’re in. Adrian asked at the start there, I take your point that Damian Collins: I’m asking because obviously, in a you don’t want to lose repertoire, but does every time of limited resources, the resources should orchestra based in London need to be able to perform prioritise putting on productions— Mahler 8? Could you say there are really big works Mr Moar: I can’t see any solely Arts Council-funded that perhaps not every orchestra can do them? One or new theatre buildings. I just can’t imagine that in the cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Ev 52 Culture, Media and Sport Committee: Evidence

26 October 2010 Ms Mhora Samuel, Mr Mark Pemberton and Mr Danny Moar current climate. All the new buildings that are opened much more with what I would call a voluntary sector/ are partnerships with local authorities and really good amateur/third sector model, where they’re looking to companies like Ambassador Theatre Group. That and cover the costs of the overhead and the operation the new theatre in Aylesbury and other places, is through other means. It doesn’t mean that they’re still what’s happening. not going to have an arts or a theatre use. They may Ms Samuel: Yes, I totally agree. I think the interesting have a theatre use but will also have other activities case around Aylesbury is that obviously the funding within them that will provide benefits to the was there from the district council itself and it was community. I think it is quite a difficult one to get part of a package to lever in additional private sector your head round sometimes, but it is important to investment, in and around that immediate recognise that theatre buildings do have a use beyond geographical area. At 1,200 seats it sits quite well on simply operating within the subsidised sector. the number one receiving circuit. It doesn’t produce work, it receives work, and it’s also managed by Q266 Damian Collins: Just one final question. You Ambassador Theatre Group. made comments about development. In my I think it’s quite interesting because obviously as The constituency, in Folkestone, culture and heritage is Theatres Trust we’re here to protect theatre buildings, playing a core role in the redevelopment of the centre and some of them are in theatre use but quite a lot are of the town, and I think the developers, while having not in theatre use and in fact adapt themselves to other an interest in those issues, can also see that it makes cultural and social uses. It means that the heritage it a place that people want to come and live and spend value and the architectural value of those buildings time and money in, so the two go hand in hand. You then play an additional role which goes over and seem to suggest a concern that left to their own above potentially the theatre and the arts role in devices developers are just interested in realising the providing the place-making and a sense of cohesion immediate value of their developments and will ignore for that community, around particular memories or issues of culture and heritage. Do you think this is a buildings that they have access to. missed opportunity for the arts and culture sector to I daily face decisions about whether a building is demonstrate how a strong cultural offering, alongside going to be suitable for theatre use. What is the new development, increases its value? market? What is the catchment? Who is going to Ms Samuel: Absolutely. As I said earlier, I think it’s operate it? Does it have a viable business model? Is vital that in this changing policy context and times somebody making the commitment to look at that we continue to make the case for cultural value answering those questions? If it doesn’t have a viable as part of developments. I think it is absolutely theatre use, does it have another cultural use, a essential. We have within local development community use, a community value? Quite a lot of frameworks the opportunity to still continue to make the theatres that are on our theatre buildings “at risk” that case. There are developers out there who take register are there because communities see them as great care and recognise exactly what you say around having a future within their communities as centres— the value that’s brought in from a cultural asset within not necessarily as art centres—but as centres where an area that they are investing in. But there are others, they can come together, they can meet, they can be sadly, that are not. Making that case, I have to say, is used as assets in that local community. often done by voluntary groups, local groups on the ground who, in effect, are the embodiment of the big Q265 Damian Collins: In that regard—because I society and looking for support from the public sector think it’s an interesting point—do you think if you because they are willing and able to take on those have a theatre building which is no longer viable in assets and work with developers. But quite often, in terms of a performance space, for whatever reason, the past, they’ve been unable to make the case but the community want to sustain it, that it has now sufficiently. I think it’s an opportunity now, within the left the remits of arts funding and has moved into the new agenda, with localism and the ‘Big Society’, to remit of Communities and Local Government and is recognise that they have a role to play. a community asset, that the local authority or the local Mr Pemberton: Can I bring us very quickly back to group should decide how they want to use it, whether Herr Mahler and just clarify something I said? It’s they get a developer in to redevelop the site, or what very important to stress that an orchestra does not they do? It’s no longer part of the public provision of have 100 musicians on its payroll or in its core the arts? membership. Usually around 60 to 80 and enables us Ms Samuel: I think it’s an interesting one, because to do most of the repertoire, and it will bring in extras communities are very interested in a number of the for those larger symphonic works. theatres that could be defined like that reopening as Chair: Okay, thanks. I know you need to get away in theatres, but they don’t see them reopening with the any case so I think we’ll call a halt at that moment, subsidised model. They see them reopening very and can I thank all three of you very much? cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Culture, Media and Sport Committee: Evidence Ev 53

26 October 2010 Mr Roy Clare and Dr Michael Dixon

Examination of Witnesses

Witnesses: Mr Roy Clare, Chief Executive, Museums, Libraries and Archives Council, and Dr Michael Dixon, Chair, National Museum Directors’ Conference, gave evidence.

Q267 Chair: Good morning. Can I welcome for the should people in my part of the world subsidise free second part of our session this morning Roy Clare, the entry to museums that are in London? Chief Executive of Museums, Libraries and Archives Dr Dixon: Free admission is of course open to Council and Dr Michael Dixon, who is Director of the everyone. In fact, if you look at the visiting statistics National History Museum—but you are appearing as of individual museums you will see that everyone current Chairman of the National Museum Directors’ does benefit—predominantly, of course, the major Conference? visitors within a certain drive time of the major Dr Dixon: That’s correct. centres, but these are national assets; the national Chair: Adrian, if you want to begin. museums hold national collections for public good. We keep them there, retaining excellence in those Q268 Mr Sanders: Thank you. We all know that institutions, and to have those collections available for museums and galleries have been doing quite well study. The statutory obligations of nationals are to over the last few years. They have enjoyed a boom look after those national collections and to make them in visitor numbers. Have they been able to capitalise available for study, which means having a great deal financially on their success? of expertise around those collections as well as all the Dr Dixon: I believe we have. If you look at the rate public services that we provide. of increase of self-generated income by just about all Mr Clare: Chairman, not only the museums in the the national museums, over the period, let us say, southwest but the museums across the country do since the reintroduction of free admission in benefit from the sharing of the scholarship, the loaning December 2001, I think that that growth rate of items from national collections, the support from considerably outstrips that of the increase in Renaissance in the Regions, which has enabled Government funding. In fact it outstrips it probably in display of those collections, sometimes in museums most museums by a tune of three or even four times. that are not themselves fully equipped to display at I think it’s important to understand that in the free national standard. There has been a supportive admission era the relationship between the museum approach to this and quite a number of the museums and its visitors is quite different. In the charging era in the southwest have benefited in those ways, in visitors would pay for admission and stay in the addition to the audience points that Dr Dixon is referring to. museum for quite an extended period. Typically—and Dr Dixon: There is an economic factor here too, in I will cite the Natural History Museum—they would that it has been calculated by Arts & Business that stay about four and a half hours on average. national museums1 contribute about £1 billion net Obviously a four and a half hour stay means the to the national economy.2 There is an economic likelihood of using catering facilities on-site is pretty benefit to the public subsidy that goes into those much 100%. In the free admission era, the visit is museums. quite different. Typically now our visits average in the Mr Sanders: Is that from people visiting them from region of two and three-quarter hours, so it is perfectly overseas? possible for people to not use catering facilities on- Dr Dixon: It’s a wider economic benefit. It’s not site. I think you have to understand the dynamic is purely from people visiting the museum. quite different. But similarly people, of course, are not a captive audience. They can leave the museum and Q270 Dr Coffey: Especially coming from the private return, having used catering facilities elsewhere. sector, there’s an element of “you pay for what you I would make two points. First of all, the dynamic is value”, so it is interesting to hear your experience of very different in the free admission era, and how the average length of visits is shortened, but secondarily I think museums have worked very hard Jeremy Hunt announced last week—or, it was over the last few years to demonstrably help announced last week—that we would keep free themselves. I think the statistics on self-generated admission. One of the charges that has been laid is income will certainly support that. that with this cut in funding museums will close their Mr Clare: Chairman, I think those remarks hold good doors more often, whereas Phil Redmond is taking the for museums outside London that are not nationals other approach in Liverpool, saying about how we use where the museums are of scale. It’s not true for volunteers more. What is the right balance, in your smaller local authority museums where of course the view? greater preponderance of the funding is not from Dr Dixon: I think the challenge for national museums national Government but from local government, and is not so much keeping the doors open but what we the picture is very patchy across the country. I can can provide by way of public programmes, absorbing elaborate, but it’s not a holistic picture. a 15% real terms cut over the next four years. The Q269 Mr Sanders: It’s a big issue in my part of the 1 Note by witness: and galleries 2 world, the far southwest, where 3% of the country’s Witness correction: This has actually been calculated by Visit Britain and not Arts & Business [http:// population have to pay for 30% of the nation’s coastal media.visitbritain.com/News-Releases/Britain-s-museums- asset in the highest water charges in the country. 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26 October 2010 Mr Roy Clare and Dr Michael Dixon reality is that the expensive services to deliver are In the new Renaissance programme, which Ministers those public-facing services. They are the special have agreed to in principle—although a formal exhibitions, the educational programmes. Opening the announcement is not yet made—we are looking at doors in themselves is not necessarily the most Renaissance money being contingent on there being expensive part of running our operations. In fact, you evidence of ambition and funding locally, from local probably have to close the doors for significant government and from local independent trusts and periods of time to make really significant savings in other sources. That contract is really important, that respect. because it’s an incentive to maintain local funding at an adequate level. Renaissance national funding is Q271 Dr Coffey: But say something like the there, quite literally, to add value, to create Canaletto is £12, or whatever the Royal Academy development opportunities, to improve what museums manages to charge, so there is that element of pricing can do, not necessarily to simply manage core for what people perceive to be quality; how do you business. There is a big risk, I think, when you note balance that in your equations? the figures—the figures I offered in my written Dr Dixon: Those special exhibitions are part of the submission for 2008–09 show that local government income-generating activities that national museums investment in all forms of culture and the arts is three now operate. The proportion of space in individual times that of the national scale, which is quite an museums and galleries that is charged for of course impressive figure. There is a very great importance varies enormously, as do the audiences for national attached to what local government invests and we do museums. For example, in my own museum, the know some of that is going to be at risk. amount of gallery space that’s paid for, in admission charges, is quite small. The economic model varies Q273 Chair: Do you anticipate that will lead to quite widely from institution to institution. Although closures? I am speaking in general terms here on behalf of Mr Clare: It may do. Apart from one or two very national museums, I think you have to accept that notable examples that are largely borne of different although there are a lot of similarities between those reasons—and there was an adjournment debate on the institutions so designated, there are quite a lot of Wedgwood museum, for example, last week—we differences too in terms of the economics and how don’t have evidence of intent to close. It is quite likely they operate. that mergers and acquisitions are going to be a key. Mr Clare: I think there’s a bigger risk though in the We are aware of a number of local authorities quite funding, if I may, Chairman, which is that the spontaneously and properly working with each other partnerships that I referred to in an earlier answer will to discover how they can share overhead and reduce be the first thing that many nationals will find difficult total cost. I suspect museum managers can be shared to do; not through any disinclination but because they and indeed, Cultural Ipswich got there first with their cost money. For example, just outside your groundbreaking idea. I know that Norwich are now constituency in Colchester there was a very good talking to them. I think that’s all very healthy. There relationship with the British Museum and with the are other examples across the country. So I am not Fitzwilliam around an exhibition a couple of years yet sure we’re in closures territory, but reductions of ago, of terracotta mini burial figures, it was an service, certainly, but we’d like to see that offset by outstanding show, and it was absolutely right to do it greater attention to managing overhead. That is there because that museum partners with one in certainly what the new Renaissance programme aims Ipswich and you have a very good strong local to do, to incentivise that process. regional flavour to it, and it was important to recognise the role of the national museum in making Q274 Chair: Can I ask you about the MLA itself? that happen. I am concerned that, in the new era of Did it come as a surprise to you when you received funding austerity, that kind of activity will be at risk. the call to be told that the MLA was being wound up? I do know that there is good intent on every side to Mr Clare: The formal call arrived in July. There were continue it but that’s the area that would certainly inklings a lot earlier than that. MLA, as everybody come under some jeopardy. knows, did not have the benefit of a Royal Charter to support it. It doesn’t need an Act of Parliament to Q272 Chair: The national museums basically have close it, and it has been long thought by many people received the news now, and it may not be as bad as it that bringing together the functions that the MLA could have been, but you now have to adjust to the manages with those of the Arts Council could improve new environment. Presumably for the museums the way local authorities, for example, are served and, outside the nationals you are going to get a second hit therefore, how their populations are served. So there once the local authorities come to decide how much is nothing intrinsically difficult about the concept but they are able to continue to support local museums— the announcement in July, of course, then had to await Mr Clare: I think that is right. further work including the Spending Review, so it Chair: Have you any inkling about what is going to wasn’t so much the phone call as the three-month happen— interval that has caused us the most difficulty. Mr Clare: It’s not a uniform picture. A number of local authorities with whom we work were clearly Q275 Chair: When we had Tim Bevan of the UK ready for reductions. Some of them were ready for Film Council, he firstly told us that he got a call at much greater reductions than have become apparent midnight from the Minister to be told that his but all of them will be trimming what they can invest. organisation was disappearing, and it’s fair to say he cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

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26 October 2010 Mr Roy Clare and Dr Michael Dixon wasn’t very happy about that. You sound as if you Mr Clare: Acceptance in lieu and the Government understand the reasons much better than Tim Bevan indemnity scheme and export licensing operate within appears to understand why the Film Council has a single unit that is led as a unit within the MLA. It demised. could operate as a unit within almost any other body Mr Clare: I cannot comment on Tim Bevan, but I do you care to name so long as there were no explicit know that we have been closely in touch with all conflicts of interest. We certainly would suggest that parties as we were authorised to do ahead of the the entire unit, which we’ve moved to Birmingham at election. We knew where everybody felt the pressure cost to the public purse, could transfer as an entity into points were going to be, and we are also, of course, Arts Council. I think that work is still being discussed. keen for everybody to realise that the MLA had There is no reason, in principle, why it shouldn’t, and reworked itself substantially over two and a half years it would save further costs and impact in the West reducing our overhead cost at just over 2.8%. We Midlands in moving it back out again. thought that was a really impressive achievement. It didn’t stand us in good enough stead unfortunately when the measurement came. But I do think the model Q279 Chair: So you are reasonably confident that if of what we’ve done is fully transferable, including the Arts Council takes on perhaps additional resource reducing the costs of operations of NDPBs operating and expertise, the service that MLA has been in the regions. We did away with office space, for providing until now can continue without any example, and that’s on the record. We’ve done a great reduction in the quality to your clients, as it were? deal to demonstrate that mobile working is a Mr Clare: The MLA board’s objective, clearly headed successful way to support local government at by Sir Andrew Motion, is that that should be the case. minimum cost. So we would like to see the lessons of You asked specifically, am I confident? No, I am not the MLA taken into the Arts Council and other bodies confident today because that work is not yet complete. that are taking the work forward. I think the area for I do have empathy with Arts Council, who have a us of concern is not the closure of the MLA but the very significant cut of their own to manage, including service to the sector and the public, and I know that a substantial cut to their overhead. It is no surprise to is a separate question but it is where our focus has the Arts Council that my position is they could follow been throughout. our lead on some of their cost reduction in the regions—I do think they could—but I have real Q276 Chair: Do you think it is inevitable that the sympathy for the fact that they have just taken this hit functions of MLA will go into the Arts Council? and now they’re being invited to take on new guests. Mr Clare: I think most of the functions logically Inevitably, in a marriage, they want to know what size could, including noticeably the flagship Renaissance the dowry is. So, no, not confident but certainly programme, and quite a lot of the things that we do getting a hearing and working very closely with that are specific to museum support, including the DCMS and the Arts Council to bring about a very successful accreditation programme which now successful conclusion. has more than 1,800 museums in it; the similar I think we are in a high-risk position because there’s programmes we are offering both for archives and for a misunderstanding about the weight of work we’ve libraries; the designation programme, which applies been doing, which has been widely acknowledged as to all three in our sector of museums, libraries and having been successful in its form, and specific to archives—the designated collections are the museums, libraries and archives, which are not like outstanding collections outside the national museums’ theatres. A great museum is also a theatre and a place collections. We think all those things are important of dance and music but it is not the same as saying and coherent. I think there is a question over whether that a museum behaves in all respects like a theatre. the Arts Council, with its new funding regime, has the So there is specific tailored expertise and knowledge capacity to absorb the additional work involved and that we think needs to live through this in a very also whether, in its current form, the Arts Council is recognisable way and that suggests an adapting the sufficiently reformed to adapt to the new ways of Arts Council if that’s where all this is going. working with lower overhead costs. So today, we don’t know whether that’s going to be the place that we go, but a lot of work is happening, both behind Q280 Chair: So to make you confident, you are closed doors and more openly, to generate the idea looking for more assurance that the Arts Council is that the Arts Council is the logical place for MLA’s going to take on people who understand museums functions to go. rather than theatres and dance halls? Mr Clare: Yes, and only this week I have written to Q277 Chair: Do you think some of the MLA staff the Permanent Secretary, copied to Ed Vaizey, I will go into the Arts Council? emailed yesterday, and we had a debate with Jeremy Mr Clare: The logical thing would be for a number Hunt. I am getting a completely good hearing at the of them doing specific jobs with specific expertise to right levels for the very important messages we are go with the functions and that’s certainly our starting transmitting. I think it is a practical issue of timing point. and scale of reduction that the Arts Council has to manage. If the willingness is there in the Arts Council Q278 Chair: There are functions that would be quite to do it, I’ve no doubt we can make a good fist of it, difficult to put into the Arts Council, aren’t there? and certainly at chief executive level, Alan Davey and Things like acquisition in lieu; how would that work? I are sure that we could do it. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

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26 October 2010 Mr Roy Clare and Dr Michael Dixon

Q281 Chair: You don’t see any alternative to the I’ll speak for my own museum; I can’t speak for the Arts Council? boards of trustees or indeed the directors of all Mr Clare: I don’t see a plausible alternative. Lots of museums, but our board of trustees will look very others have suggested variations and there have been carefully at what essential services relate to our some circling to see whether they could cherry-pick collections and what essential expertise we have to some of the functions. I don’t think that is a good retain around those collections to make them really approach because the clear advice we’re giving is that valuable as internationally important research a coherent package is what will work. For example, a collections. To give you a measure of that, the Natural coherent package will work for local government, History Museum has a scientific staff of about 350 but which is a big consumer of what we offer and what we receive visits from over 8,000 scientists from other local government is slightly fed up with is more than institutions that use those collections, so they are an one body coming with slightly different messaging. incredibly important resource. But they are not an So we are very keen to support local government in important resource if there is no intelligent access to getting, as it were, a one-stop shop in terms of advice, the collection, so you need curatorial staff and support, the evidence for outcomes and also, of research expertise around those collections to make course, best practice. them really accessible and valuable. In the case of Natural History collections, of course, they are Q282 Chair: NMDC don’t see any additional role relevant to some of the big questions of the day. What that you might take on? is the impact of climate change? What is the impact of Dr Dixon: The important thing is that the services biodiversity loss and things of that sort? Individually, that national museums rely on at the moment are still museums will have to ask themselves some very available and of the same quality. I would hope that important questions. What compromises can we make we would be consulted in the proposals as they go in the short term in terms of collection storage and forward. The acceptance in lieu scheme, the portable security and what compromises can we make in terms antiquity scheme, the Government indemnity scheme, of the expertise within the organisation that relates to are all things that we rely on to varying extents at those collections? Because of the statutory obligations varying times, and we would wish to see those of our boards, I think that’s the first consideration services continue at their current standard. I suppose before we look at other measures of how we can effect there is a more generic point that some NMDC expenditure reductions. members would exhibit at this point, and that is, is Mr Clare: I think there’s another aspect of this. I there a danger that administration of certain aspects of agree with what Dr Dixon said but there’s another museums through the Arts Council just perpetuates aspect which is under the broad heading “Collection the slight misunderstanding that museums are Development”, which is, what comes in needs to be synonymous with the arts? Museums, of course, cover accompanied by something going out. It’s a very a very broad spectrum of interests, so that would be a unpopular notion among a great many curator concern perhaps to some members at this time; can the specialists because collections are held to be there for Arts Council fully represent the breadth of museums? ever. The reality is that there are quality differences across all collections whether national or regional. Q283 Chair: But generally you share Roy Clare’s There are also overlaps in collections between view that if the Arts Council takes on the people who museums, both at national and regional level. There do have that knowledge and expertise, you’re are also some collections that have grown up over reasonably confident that it can continue? time that perhaps are no longer reflected in museums’ Dr Dixon: Yes, I do. current approach to their thinking and themes. All of these are completely legitimate but they do need a Q284 Alan Keen: To move on to collections now, wholehearted and very focused approach to the Michael has already told us that closing the doors for management of them. a relatively short while is very, very marginal in cost A couple of years ago—and the NMDC was among savings. Obviously collections must be a large part, in those who helped the process—the Museums addition to education. How are the cuts going to be Association, which sets the ethical standard for this managed in the best way to protect collections? You rewrote the ethical code to enable this kind of process can’t just shut them in a room and leave them there to be done effectively; coming to the point that you and expect them to be in the same condition when you can dispose of and certainly disperse collections in come back. different ways. This remains controversial and Dr Dixon: You’re absolutely right. The collections we difficult to do but there are now some examples where have in this country are fantastic national collections. museums and galleries have successfully liberated If they are to have value, then they have to be used; items from collections. There are very strict they have to be accessible for scholarly study as well procedural guidelines for how you do it, and it has to as for exhibiting in public. I think that is the challenge be for the benefit of the collections. It has to be a last we face in the current funding environment. Over the resort. In one sense, it is about money, but, short of period since the reintroduction of free admission, money, I referred earlier to mergers and acquisitions, museum funding has grown only roughly at the rate of and if collections are going to have to be brought inflation as opposed to Government funding overall, together there will have to be a process of looking which is almost twice that rate. So we’ve not enjoyed over each of them as they come together so that the a boom in the last few years and indeed, therefore, a high ground, the really important elements of the 15% real terms cut is quite painful. collection, are maintained. 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26 October 2010 Mr Roy Clare and Dr Michael Dixon simple to do, but otherwise we do have an to be organic within the museum. It can’t be. You do unsustainable challenge over the next 50 years if you need collections specialists and people who take a long view. We have a lot of stuff that is never understand the collection, but you can add scholarly seen by the public, ever. We have a lot of stuff that value through partnership with HE (Higher the public wouldn’t want to see. Some of it is totally Education), and I suspect we need more of that. legitimate as research collections there for people to We also need, in the regional sense, and this is dig deeper. Some of it is of questionable value at any something Renaissance will do, funding for the big level. So I think this is a big area where there has important museums, but also development funding for been, over many years, discussion about a proper the others so that the rest can catch up with the best. strategy. There is going to have to be one, at a point That is certainly the design of Renaissance, which when custodial costs are not going to grow less as a includes, at its heart, building up this scholarship and proportion as the overall fixed costs are growing curatorial expertise. But it’s a major risk otherwise, higher. because it’s tempting for a museum of any scale to go the Disney route. In my old museum, the National Q285 Alan Keen: What would be the least damaging Maritime Museum, we knew we could do a show on approach? We are saying, presumably, that we have pirates any time and you would get a queue of people five or six years before funding can start increasing at the door. It’s not very good for the reputation again, and we have talked about collections being ultimately. So you do need to have the quality of used for education, but what about the education and curatorial capacity, so that you don’t fall into the the future of the curators themselves? Curators get Disney “pile them high, stack them deep” approach, older and move out. In a period of five or six years, which museums need to be beyond. how would you cope with not having the money to Chair: Or dinosaurs in your case, I imagine. bring new people in and train them? Dr Dixon: Indeed. Dr Dixon: Absolutely. That expertise, curatorial expertise, knowledge of the collections is, of course, Q286 Alan Keen: Have you been given any real incredibly important and we don’t want to lose that indication by the Treasury how long the cuts are going expertise, for the reasons I explained earlier; it makes to last before they forecast they can start the work? I the collections less useful. It is a challenge, ask this question very seriously, because I asked the particularly as that expertise takes often decades to Department of Health how much it’s going to cost to build up, and that’s the sensitivity at the moment, that cease all the PCTs, and they didn’t have the foggiest although one would like to believe that the current idea. So I can’t imagine you have been given much funding situation is a five- to six-year problem, and indication. You’re just guessing at it, we have to make we can then start to rebuild some of our expertise. cuts now and we don’t know how long they go on for. During that five- to six-year period, if we lose that Or have you been given some indication? It would curatorial expertise it will take decades to get it back. help, wouldn’t it, if you knew that you have to Arguably that might mean that some public-facing mothball for a certain period of time. I know it’s not services, where the expertise can be built up more a science, economics. quickly, are the sort of things that will be cut in the Mr Clare: You asked specifically, has there been any short term. I think that’s regrettable, because one assurance from the Treasury? The answer is no, there wants to see a good balance between what we do for hasn’t. It’s interesting though, working as we do with the collections for the long term and what we do for so many local authorities across the country, that the public in the short term. I think that may be an various of them have different approaches to this. inevitable consequence, that our public programmes Some of them, through their area, where they see their will be less vibrant over the next few years as a result industries growing, where they see their population of the cuts. income levels perhaps growing under new investment, Mr Clare: National museums have, of course, the are more bullish than others. There are clearly local strength of depth. They have a great many different authorities where that is not the case. So it’s not an experts and they can assemble expertise between each even picture, and it’s not even a north/south picture other. We already have an expertise deficit, though in because there are places of great deprivation in the regional museums and museums outside London. I south too. referred earlier to the partnerships that are essential I think that area of confidence in the future needs a to the sustainability of those museums. This includes political answer, coupled with what is the economic fundamentally the scholarship, the curatorial vitality? I don’t think our sector should walk away expertise, and so forth. We have evidence presented and say, “Well, until the politicians and the economists to us just recently by the Art Fund, who are benefiting have sorted it out we have nothing to do.” I do think a great many collections, of course, with their funding. it’s important that the sector owns part of its own A substantial number of the bids to the Art Fund for solution, and if you look at, for example—we’re money for collections outside London, in other words talking collections—the costs that we’re all putting from non-national museums, are turned away through into collections sheds across the country is inexpert submission, which is pointing squarely at the horrendous, and there isn’t a way, at the moment, of curatorial capacity outside national museums. So we gripping that because each of the many organisations are going to need to consider a new model for that own and run museums are sovereign. They either maintaining expertise. Some nationals are already have trustee boards that have their own independent working closely with higher education, which I think view, or they are perhaps owned by local government, is a very powerful model, where not all expertise has or now, increasingly, they are in a trust status, which cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

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26 October 2010 Mr Roy Clare and Dr Michael Dixon is a good approach if it’s done for the right reasons, Q287 Damian Collins: I would like to go back to but it does give them an autonomy of decision something that Dr Dixon mentioned earlier, and making. So there isn’t at the moment a strategic develop some of the points that we have just approach to this, and we’ve long advocated that there discussed, and that’s with regards to the research should be. I suspect Government may well be capabilities at the Natural History Museum. Given listening to this now because it has to be done. that everyone is in an environment where budgets are Dr Dixon: National museums are long-term constrained, do you think that the Natural History organisations by their very nature, so we do think very Museum requires its own research capability? You hard about long-term sustainability. I think we have over 300 scientists who are researching issues recognise that, yes, we are in for a difficult period. I around biodiversity and climate change; is that work think we have to have confidence in what we can do you need to do yourself or could you not access outside of our public funding. I said earlier that the research done by other people? growth rate in our own self-generated income has Dr Dixon: We see our collections and the expertise been at a much faster rate than government funding. we have around those collections as part of the One would hope that we can continue that and close nation’s science infrastructure, and scientific something of the funding gap. We also operate of collections can be used—not just our own scientific course within the philanthropic sector. There is much collections—to address a whole range of current talk about whether philanthropy can make a issues. So I do think it’s important that we retain contribution in that area, an increasing contribution in research expertise. I think also our national museums, that area. Indeed, that is something that we are of certainly the Natural History Museum, are pre- course all progressing very actively. But, the reality eminent on an international stage. It would be, in my is, yes, we are probably in for four difficult years at view, a great shame if we lost that pre-eminence least. I think some of us believe we shouldn’t be because we did not protect the things that make it a confident at the end of the four-year period that great institution. The research that we do does make suddenly money is going to be falling out of the trees. it a great institution relative to the other great natural I believe that won’t be the case. Indeed, our funding history museums around the world. So I think it is allocation letter makes it very clear that the out years important that we retain that expertise. It’s not locked of the plan are subject to the economic circumstances up just within our own institution. I said earlier, we at that time. So operating a national museum, we’re get a great deal of research use of our collections from in three different areas. We’re in, the commercial other institutions and, indeed, we do a lot of research sector and the charitable sector, as well as the public within the museum in partnership with other sector. We have to do as well as we can in all three organisations, particularly in the higher education areas over the next four years and beyond. sector. Mr Clare: Chairman, this is an interesting area. Looking forward now at other forms of investment, Q288 Damian Collins: Do you restrict access to your after the Olympics we know the Heritage Lottery collections, to researchers, and people from the Fund (HLF) will have access to greater funds. That is outside who want to access what you have? a very powerful tool. Our advice right now to regional Dr Dixon: No. If they have a bona fide research museums is start planning for that because it’s a very short time off. HLF has been magnificent for interest and the collections can answer those museums, 60% of their funding goes into museums, questions, then they’re entitled to access. and it’s good that they’ve also recently invested both in conservation and in the training and development Q289 Damian Collins: I see the role that the of staff. Most recently it was with some innovative museum plays in supporting research that people are new grants. We are very pleased to see that. Ministers doing, and if people have access to everything that have agreed in principle that Renaissance will operate you have, or your own researchers don’t have unique more closely with HLF in the future, and I think that access to elements of the collection, then why can the is to be welcomed as a step forward, because there is museum not play a role as a guide to what it has and going to be resource there, coupled with the thought let people from outside, from Imperial College down that if the recovery from recession proceeds as is the road or wherever, come in and access your currently being predicted, a number of companies that collections and do that research for you? are already cash rich will be back on the list of people Dr Dixon: The answer to that is that they do, and who might give, and so we also need a much more without that expertise about the collections, the fluent approach to fund-raising. That again is a collections would not be so accessible for those capacity that’s good in national museums, less good external users. We have been proactive in thinking the further away you go from the nationals and into about the cuts that were coming and have announced the regions, so it seems to me a priority. I notice that a series of reductions in our research expertise already, in the Arts Council’s report today on their reaction to to widespread dismay among the scientific their funding settlement, they are saying that Arts & community, who regard it as absolutely important that Business will cease to receive any state funding from we retain that scientific expertise to make those 2012, and will have its funding halved between now collections accessible. As a case in point, we and then. I think that’s probably right to incentivise, announced a consultation on a reduction of our but we need to get behind what follows it and support expertise in micropalaeontology, and this is an area the Arts Council in what that is, because we need that is of great interest to the extractive industries, and some joined up approaches to philanthropy. received over 1,300 contributions from the research cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

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26 October 2010 Mr Roy Clare and Dr Michael Dixon community about how vital it was that we retained resources are very limited, should our national that expertise to make those collections accessible. museums—they obviously require experts who can help understand and manage the collections—be Q290 Damian Collins: But in terms of the remit of facilitating research or should they be paying for it this inquiry, looking at funding of arts and heritage, and originating it themselves? one might be tempted to say, “Well, that’s all very Dr Dixon: If you look at the funding of UK science, well but why don’t they pay for that work if they think certainly through Research Councils UK (RCUK), it’s so important?” Why should it be coming out of there is an assumption that certain sorts of expertise budgets that are therefore— are retained within our national capacity and not paid Dr Dixon: Because it is part of the nation’s science for by RCUK, so taxonomy and systematics is what infrastructure. The fact that our funding comes via the the Natural History Museum is based on, and the Department of Culture, Media and Sport in its entirety collections of course are the tool that makes taxonomy is something of an historical accident. If you go back and systematics accessible. Taxonomy and decades, then our funding would have come from a systematics are absolutely crucial for understanding number of different sources, including funding the animal and plant world, and indeed all sorts of specifically to support the scientific expertise in the legal responsibilities fall upon a myriad of institutions organisation. It’s a matter of convenience now that the within the UK about correctly identifying animal and grant just happens to come in a single block via plant products. At the moment, the way that the DCMS. funding of science works, there is an assumption that Mr Clare: I think there’s a broad point behind this the expertise is based in the Natural History Museum, which connects with my—I didn’t mean to sound anti- and it doesn’t need to be paid for elsewhere, so I think Disney, I’m anti-Disney in museums—behind that you have to look at the big picture in this instance, point, in that the scholarship lends the authority. So and not perhaps the local perspective of arts and the academic base, which is founded on research, is heritage funding. of critical importance, and certainly from my background, as the Director of the National Maritime Q292 Damian Collins: But, in the big picture, is Museum, we accented research to the extent that we your view, if you weren’t doing this work, it wouldn’t created the new archive, which will open next year, be done? the Sammy Ofer Wing. That was based on the Dr Dixon: I completely agree. In fact the House of appreciation of the collections as scholarly resources. Lords Select Committee on Science and Technology It is fundamentally important to a decent museum that has looked at this issue a number of times in the last we know much more about the items we have. It’s decade, and determined that we have insufficient quite interesting that, as an example, in 2005, when taxonomy and systematics expertise at present, so to we undertook research into Nelson’s letters, one might cut it still further would be a significant issue. have been forgiven for thinking that after 200 years Mr Clare: Chairman, I think it is also a matter of there is nothing new to discover. But that research that regret that DCMS will not be funding a chief scientific was led by the now late Dr Colin White, turned up adviser post in future. The post that was created was 1,000 letters that had either not been published, or a result of some work that Dr Dixon led, which not been published without amendment, in Victorian demonstrated a need of scientific advice in the times, that were new and fresh. That was just one Culture, Media and Sport Ministry. Not only that, but example of countless ones I could offer. So, research that it should be connected with the social research is important, fundamentally important, and into the positive outcomes that are feasible through particularly ways to connect research into regional the investment that is made in culture and sport. I museum collections where they don’t have the luxury think it’s regrettable that we’re going to lose traction of the scientific scholarship, and other forms of in both of those areas unless we can find another way scholarship, at their fingertips, which is why the to carry it out, and it’s not clear what that might be partnership is so important. yet. If I may, Chair, just mention university museums in this context because they are at potentially very great Q293 Damian Collins: I think we understand where risk. Some of the best known not so, but there are you are on that issue, so I’ll move on to something more than 20 of them, and those less well known in else I wanted to raise, which is picking up on the the smaller institutions will be at risk because of the remarks that were made from Alan Keen’s questioning pressure of funding in higher education. Of course, on the role of philanthropy and business support for there is no direct responsibility from DCMS for the arts and culture. In the documents and the written university museums, but they now represent a really evidence that your organisation supplied it says, “The important part of the total firmament of museums, American model of reliance on private funding brings including in this scholarship and partnership. So I a degree of compromise”. I just wondered if you could think university museums merit particular attention expand on that. Are you concerned that the more because we’re not at all comfortable that their future private giving there is, the more Disneyfication there is assured. Clearly in the bigger universities they will is of our museums, aside from obviously the cherish and look after them, but it’s the smaller ones wonderful animatronic T Rex at your museum. that concern me. Dr Dixon: I am going to remind myself what exactly we said in this respect. Q291 Damian Collins: I hear what you’re saying, Dr Coffey: Section 8. but I think it’s a legitimate subject for debate: when Damian Collins: Section 8, bullet point 3. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

Ev 60 Culture, Media and Sport Committee: Evidence

26 October 2010 Mr Roy Clare and Dr Michael Dixon

Dr Dixon: I think the point here, which I tried to Up in Norfolk, in Sheringham, there is a very small make earlier, is that we operate within three different museum on the coast called the Mo, which has a funding environments. Clearly public sector funding business partnership with the wind farm creators just of national museums is incredibly important. In fact, offshore. That’s an extremely good way of achieving if you look at the role of great national institutions like sustainability at the price of a small space to explain that they don’t work without public subsidy. That’s a to the public why the wind farm is there and what it given and we all understand that. There is a great deal does. That’s the kind of innovative approach, which of talk at the moment about the role that philanthropy in small settlements can do wonders. But the major might play. In fact, I think as a sector, we’ve done local authority owned important museums outside extraordinarily well in the last decade or more in London are not there yet. It’s very hard to get either terms of leveraging Government funding in finding philanthropy or commercial sponsorship into them. private money to develop big projects for the national But York Library Service showed that it can be done museums. Again, I can quote the figures from my own with the right kind of people because, on the whole, institution a bit more readily than for some others. people give to people. They managed to get Aviva to Our Darwin Centre, which opened in September last part with some money to support their adult learning year, was a £78.5 million project, but we were able to programme in York libraries, which remains the only deliver that with only £10.7 million of direct example of commercial funding into a local authority Government funding. owned service. So I think we’d be pretty good at leveraging philanthropic giving. It is clear that to expect there to Q295 Damian Collins: Going back to the word that be a major step change in the way that philanthropy was used in written evidence, which was supports great national institutions is not going to be “compromise”. With your remarks, Mr Clare, about something that happens overnight. It’s going to Disneyfication, do you both believe there is a danger require a great deal of development. I think it will that with more private giving you end up with more require something by way of tax incentives over and exhibitions being put on, because that’s what people above what we have at the moment. I think we have want to go and see, rather than the ones that have the to recognise that perhaps if we look to the American greatest intellectual merit? model as an ideal, that is a very different cultural Dr Dixon: I am not sure I answered your question environment. The culture of charitable giving in North completely enough on compromise. I think looking to America is not what it is here at the moment, and I the American model, where many of the great don’t think we will get to that position quickly. institutions in North America are funded by large endowments, I think that’s the sense in which we were saying “compromise”—to be reliant on large Q294 Damian Collins: I understand that and I think endowments with a variable return on those it’s a perfectly legitimate debate, if you see the investments due to economic circumstances is, I think, American model as an ideal model, about how quickly the point that we were trying to make by using the or realistically we can reach that point—a number of word “compromise”. If you’re incredibly reliant for people have come before us and have raised those your operating costs on income from endowments, concerns—but within your written evidence there is a and the investment environment changes dramatically, suggestion that it might not be desirable even if we then you can see a great deal of your operating income could get there, and that there’s a limit on the amount wiped out. So I think the balanced model between of private involvement you would want ideally in the philanthropic giving and support from the charitable running of a major institution. community or from public funding or commercial Dr Dixon: I think typically, where organisations have development, is a good model for national museums developed strong philanthropic giving, it tends to be that gives us some resilience to a number of different in peaks and troughs and to support one-off items, situations that are outside of our control. either capital developments or particular Mr Clare: I would agree with that. It’s a mixed programmatic developments. So to regard it as a economy approach. I wouldn’t describe it as a constant consistently rising contribution to our compromise. I think it’s an important multiple funding income, I think would be problematic. I think clearly stream approach. If you like at Tyne and Wear other areas of self-generated income, our own museums, for example, up in the northeast, they have commercial developments and work with the a number of funding streams for all their partner corporate sector, are other areas that we can look at, museums, which does support their sustainability. but I wouldn’t regard philanthropy as the magic bullet, Clearly, they suffer the same pressures as everybody as it were. else but at least they have a fighting chance of Mr Clare: I think that’s right. The mixed economy balancing books. approach is important and the further again away from London the more important that gets. As an example Q296 Damian Collins: Two very short questions, if of some innovative funding streams, Luton Cultural I may. Do you think there is scope for having more Trust, which embodies both the library service and the touring elements from the national collections or the museum service, has an income stream through Luton national museums to regional museums, whether it be Airport. As an independent trust it can also attract an entire exhibition that has been on display in sponsorship in a way that a local authority museum London that could be moved in part or whole, or just can’t, because people don’t give to local authorities elements from national collections that are stored in on the whole. London, to go on display in the regions? cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG03 Source: /MILES/PKU/INPUT/005777/005777_o003_kathy_HC 464-iii corrected.xml

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26 October 2010 Mr Roy Clare and Dr Michael Dixon

Mr Clare: We certainly would welcome all forms of very welcome it has created some museums and new partnership with national collections, and there are museum exhibition spaces which are difficult for the lots of examples of great shows, some of which local economy to sustain and support, and which may started outside London and then came to London. The have been over-ambitious in their initial inception, no George Romney show that opened in the Walker in matter how well meant that was? Liverpool, for example, went after that to the National Mr Clare: I think optimism bias is a key issue and in Gallery—a good example of how something can be some of the investment, particularly the early triggered. It got rave reviews at the Walker too. The investment, there was greater optimism than is National Portrait Gallery is a wonderful gallery but it perhaps justified. But I don’t resent any investment in has quite a small special exhibition space, so in the museums in any part of the country. It is important Walker the Romneys really could breathe. It’s a good that the business case is robust and well founded and, example of that partnership, and I referred earlier to unfortunately, not all of them have been. But there the one that took place in Colchester. There are many have also been some fantastic examples where that of these, but they are not cheap to do. Because of the investment has repaid many times over the reach into fixed core costs of national museums, when they are audiences that either can’t travel to London, or for under funding pressure it’s one of those areas of whom London is a very long way, who have access discretion that trustees inevitably look at quizzically. to not only a great space, which is owned by them But they can be sponsored, and it’s important that we locally, but also a space that can then show under have an accent on collaboration, which enables great incumbent indemnity rules at national standard. works to be seen outside London as, for example, We do need more spaces like that in the right places, some Stubbs were loaned from the National Gallery and I think it’s a business case judgment, case-by- to Leeds 18 months ago—fantastic show, which case. But I know that the closer relationship that we attracted a local Stubbs owner to loan his work for the are advocating between Renaissance and HLF is same show. That does build capacity, but cost is one designed to achieve a greater co-ordination of of the issues. perception, so that where one kind of investment, Dr Dixon: I completely agree. It happens a lot now, perhaps by HLF, is complemented by another, namely it happens through exhibitions derived from the Renaissance. Of course the important third element is nationals going on tour. It works in a myriad of what is the local funding like, and evidence of that. I partnerships between national museums and local think that new approach that this Coalition museums and, of course, there is a huge loan Government has endorsed in principle is a powerful programme between national museums and local one if we can take it forward. museums. I agree with Roy completely. It does require Dr Dixon: I agree, there is a lot of evidence out there. a certain amount of funding and, as I said earlier, The Millennium Commission funded a number of programmatic activities are likely to be among the large developments across the UK. We now have first casualties in a real terms cut. But I think we see enough evidence of how those performed against their how important it is among national museums to business plan to feed into future thinking. I’m a great support local museums, and I think this is an area that believer in lessons learned. I think we do need to look we will be looking at very actively. at the lessons learned. The HLF itself is working quite actively on how it takes learning from big and small Q297 Damian Collins: Finally, Mr Clare, you projects that it’s invested in, and how to spread that mentioned the Heritage Lottery Fund’s support for knowledge to potential recipients of future grants. museums around the country. This is a question Chair: I think that’s all we have. I thank you both regarding building infrastructure costs of museums, very much. particularly regional museums. Do you think there is Dr Dixon: Thank you. a danger that while a lot of this investment has been Mr Clare: Thank you. cobber Pack: U PL: COE1 [SE] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

Ev 62 Culture, Media and Sport Committee: Evidence

Tuesday 2 November 2010

Members present: Mr John Whittingdale (Chair)

Ms Louise Bagshawe Philip Davies David Cairns Paul Farrelly Dr Thérèse Coffey Mr Adrian Sanders Damian Collins Mr Tom Watson ______

Examination of Witnesses

Witnesses: Mr Edward Harley, President, Historic Houses Association, Ms Carole Souter, Chief Executive, Heritage Lottery Fund, and Mr Loyd Grossman OBE, Chair, The Heritage Alliance, gave evidence.

Q299 Chair: Good morning and welcome to the delivery of front-line services, I’m particularly fourth session of the Committee’s inquiry into funding worried about the many smaller organisations and of the arts and heritage. We are starting this morning institutions that are going to be affected, as there is a by focusing on heritage. I would like to welcome tendency to concentrate on the big trophy properties Edward Harley, the President of the Historic Houses and the big national organisations. However, the Association; Loyd Grossman, the Chairman of The heritage sector is extremely complex and involves Heritage Alliance; and Carole Souter, the Chief hundreds, if not thousands, of local and regional Executive of the Heritage Lottery Fund. organisations, all of whom depend for their fundamental well-being on the general health of the Q300 Mr Watson: Good morning. Can I just give sector. These smaller organisations will be damaged you a general opener: what do you think the impact disproportionately by the cuts because, of course, they of the Comprehensive Spending Review (CSR) do not have the fundraising ability of the larger settlements will have on front-line heritage services? organisations. The loss of local authority capacity is Ms Souter: Shall I start? going to be pretty devastating, not only in terms of Mr Watson: Why not, yes. heritage but also in terms of general cultural Ms Souter: I think it’s clear that the financial impact programmes; the loss of local museums, for example. is significant from the work that we had done, in Heritage reaches into every single community in the advance of the CSR, looking at what various country, and heritage has the ability to bring a great percentage reductions might mean. I think we’re deal of pleasure and a tremendous amount of expecting that maybe £650 million to £675 million inspiration to everyone in the country, largely through overall will come out of the sector using our definition a multiplicity of small voluntarily supported of heritage, which includes natural environment, organisations. These organisations will be very museums, historic environment, and so on. severely damaged by the reduction in heritage funding The details of where that will come from, I think, are on a national level. not yet clear. The countries, for example, have not yet decided how they are going to deal with the impact of Q302 Mr Watson: I know this is very hard, but can the CSR and for us, as a UK-wide body, that is I ask you to look five years on and try and picture— obviously very relevant. But I think we can expect given the decisions that have been taken—what that local authorities, who provide a lot of the front- heritage services will look like? line services, will have to look very hard at the Ms Souter: May I start? services that they provide. It is too early to be very Mr Watson: Please do, yes. specific about it, but I think we are clear that all those Ms Souter: I think that we’re likely to see a sector public bodies that do provide heritage services will that—building on the points that Loyd made—is much have to be looking very closely at what they provide, more firmly rooted in local and voluntary management and we can expect a shrinkage in public funding of a and ownership of heritage assets. We mustn’t forget very considerable order. that a good two-thirds of heritage assets are in private ownership already, but of those that are perhaps in Q301 Mr Watson: Whatever the reason for these local authority or other public ownership at the cuts, whether it is necessary fiscal tightening or moment, I think there will be a very strong incentive ideology, there is no doubt that over the next few to look at whether smaller, more local, groups can be years the role of the state in funding heritage and the involved in the management and running of those. I arts is going to reduce. Do you think that’s a good or think there is enormous potential in that, but I think it a bad thing in the long run? has to be managed very carefully, and it would be a Mr Grossman: In the long run it’s probably a good great risk to move too quickly to that. thing; in the short run it’s a bad thing because we’ve Some of the organisations that might, in a few years, started off with a very unequal baseline. Heritage very well have the capacity to take on management funding has been declining very significantly since and running of heritage assets would need some time 1997. Heritage is way behind other sectors which the to develop the skills and the structures to do that. So DCMS has been funding, so this was a particularly I think it is important that we do think about a five- savage cut for us to take. In terms of the effect on year time scale, that things don’t happen so fast that cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

Culture, Media and Sport Committee: Evidence Ev 63

2 November 2010 Mr Edward Harley, Ms Carole Souter and Mr Loyd Grossman OBE people are set up to fail in taking on those new going to be hugely important, in areas such as responsibilities. But I think, potentially, we could see licensing, sometimes fire regulations, sometimes, for something that further embeds local community example, temporary structures or signage. They sound involvement in heritage and recognises the importance small things on their own but added together they can of that. Obviously some of the funding streams then be a huge restriction, and if in five years one could are not necessarily grant-in-aid type funding streams see a lighter environment in some areas of regulation but lottery funding, for example, which is very much that would be a huge help. a focus for small voluntary organisations. Mr Watson: Perhaps you could follow up with some Mr Harley: Chairman, I would like to pick up that written details on the specifics on that. I think that point about the privately owned heritage, representing might help us. the Historic Houses Association: Carole’s point about Mr Harley: I would be very happy to do that. two-thirds of the heritage being owned by private people. Our organisation is entirely private Q304 Mr Watson: Carole, perhaps I could direct this ownerships. We represent 1,500 houses, of which 500 at you. I’m afraid this is the obligatory “politician in are open to the public—14 million visitors—so we’re a recession” question: is there anything that your a very important part of the privately owned heritage. organisation can do to reduce its administration costs? In terms of the Comprehensive Spending Review, Ms Souter: Every organisation can always do which was your opening question, of course we’re not something to reduce its administration costs and we impacted directly, but I would like to mention, and have done so year-on-year. We’ve taken about 30% I’m sure we’ll talk about this in a minute, the corollary out of our admin in recent years. This year admin impact for us: English Heritage. The specialist advice spend is likely to be about £1.5 million less than last from English Heritage will significantly affect our year’s, partly as a result of some of the Government’s owners, and of course—I’m sure we’ll come to this requirements on us. I would anticipate that we would later—tourism promotion is hugely important for us continue to take annual reductions of a smaller as well. percentage than we’ve managed this year. I think it’s very important that we do that. We are very well Q303 Mr Watson: Okay, you seem to be painting a aware that all our funding comes from the lottery picture where in five years’ time there might be funding stream, so we don’t have grant-in -aid to fund benefits because you will have generated local our admin. Anything we spend on admin doesn’t get expertise and local management, but there’s a danger spent on grants, so over the years we’ve pushed down with immediate cuts of losing some national expertise very hard on our admin costs. to passport people into that. Is that generally the point you’re making or have I misinterpreted? Q305 Mr Watson: Can I just ask one slightly Ms Souter: I would agree with that. But I think, specific question before I end, Chair? This might be a without being naive about the impact of this level of novice question, but does the Heritage Lottery Fund reduction, there are bound to be negatives associated fund privately owned homes—in Mr Harley’s with it. But I think there is the potential for some statement—that do not open to the public? positive change in the sector as well. Ms Souter: No, and we fund private owners very Mr Grossman: Yes, in many ways, the heritage rarely. We will fund properties in private ownership sector—because it’s a very mixed economy—has been through two particular grant schemes we have, the doing the “Big Society” for years. It has an extremely Townscape Heritage Initiative and the Landscape good and productive mix, thus far, of national funding, Partnership Scheme, where a range of buildings are voluntary and charitable activity, private sector being supported, as part of an overall scheme, and philanthropy, and so on. A very good example is some of them are in private ownership. For private Heritage Open Days. At the moment Heritage Open houses, we generally would fund work that is, for Days receives, I think, about £500,000 in funding example, related to an education programme, or an from English Heritage, which I suppose is a relatively access programme, and we have a specific policy small amount of money in terms of public finance. direction that means that we must be very careful For that £500,000 worth of funding, it facilitates 4,000 about any funding that might give rise to greater events all over the country, not just focused in London private than public benefit. But it’s something we have or the big metropolitan centres. It attracts over 1 to keep under review because, obviously, a million visitors and the organisers and volunteers tremendous amount of outstanding heritage is in involved contribute nearly £4 million worth of their private ownership, so it’s always an issue for us. time. So that’s just a small example of how a Mr Harley: Chairman, could I just comment on that? relatively small investment of public funds generates The working relationship is excellent and the grants a huge impact, in terms of public involvement, that have been received for education have been volunteering, and all the other good things that hugely valuable, but it has been a very small handful; heritage generates; like a greater sense of place, more a very small handful indeed. We have discussed it and community involvement, higher levels of citizen I think there is room for further collaboration here. participation, and so on. The HLF policy directions are quite clear, but there Mr Harley: I think one of the keys, if you don’t mind seems to be some scope, within those policy me saying, looking ahead five years—and it’s very directives, for doing more through lottery grants. relevant for this group—is regulation. Sometimes one There must clearly be an overriding public benefit but, can reduce unnecessary regulation at no cost, and I as long as there is that overriding public benefit, I’d think for some aspects of the heritage to work that’s like to think there’s scope to do more with the cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

Ev 64 Culture, Media and Sport Committee: Evidence

2 November 2010 Mr Edward Harley, Ms Carole Souter and Mr Loyd Grossman OBE

Heritage Lottery Fund and we’d like to take that terms of funding—and this partly goes to Carole, but further forward. We could probably come up with I would be interested in other comments—that we some examples for you. need to ensure that where there is public support or Mr Watson: That would be helpful, thank you. lottery support for heritage that there is evidence of a localised demand and interest in it? Q306 Chair: On that point, I recall visiting one of Ms Souter: Yes. your members’ houses during our last inquiry, to be shown a very professionally produced Braille guide to Q309 Damian Collins: Other witnesses have hinted the house, which had been funded through the HLF, at this, in some of our other hearings, that there is a but at the same time there was a huge crack down the danger sometimes that the heritage is delivered top wall that was threatening the fabric of the building, down, in the form of a capital investment in a major for which you weren’t able to get any assistance. It project where there isn’t enough local support and so did strike us at the time as being absurd. If you do they are in some cases saying, “More and smaller”. have something like that is the HLF going to become So, directing it to a lot of these more localised groups a little more flexible? that Mr Grossman talked about would be quite an Ms Souter: We are certainly planning, as part of our effective use of funding. consultation in our next planning round, to ask the Ms Souter: I think the perception is interesting question of our consultees again about how they feel because, in terms of what we know will get media about working with private owners and, as Edward coverage, television time, front page of the nationals, said, we have very positive relations with the HHA. It it will always be a big capital project from a well is only fair to say that when we have asked this known organisation, and that does colour the question generally in the past, the response has usually perception of what it is that lottery funds go to. In been from our consultees, “We don’t think that private fact 80% of our grants, by number, go to voluntary owners should be a major focus for the Heritage organisations and about half by amount of money. The Lottery Fund”. But I think it’s one of the areas that balance between museums, historical environment, we do need to keep asking and testing, and making natural environment, intangible heritage, and so on, sure that we’re not being inflexible about it. The issue has been pretty constant across the years. One of the is where the benefit lies: if you make a major things that we’re criticised for sometimes is being structural repair to a building, which is in private quite demanding as a funder, and part of that ownership, obviously it’s something that has to be “demandingness” is asking people to demonstrate that thought about quite carefully. there is a requirement, a wish, a need to support those projects, whether they are big capital projects, a Q307 Damian Collins: Do you think there are too smaller local history project, a history project or many heritage organisations doing similar things and whatever. that there is room for them to work together more I think, particularly in the current climate, it is closely, and that in the new funding era that is absolutely essential that any organisation, big or something that will probably have to happen? small, that is thinking of taking on a project of any Mr Grossman: I think there are opportunities for them kind has thought through the sustainability of that to work together more closely, but the fact that there project: what is the legacy, who wants it? If nobody appear to be too many heritage organisations merely wants it how are we going to keep it going? How are reflects the extraordinary range of diversity of the heritage sector: historic vehicle enthusiasts, church we going to fund it in five years’ time or 10 years’ bell freaks, historic house owners, and so on. This is time? So one of the things that we make no apology a strength, and it’s worth stressing—and this is one of for, in our application process, is the emphasis on the reasons why the public sector funding that trickles demonstrating that there is an enthusiasm for this down to these organisations is so important—that project and that it’s going to deliver real benefits. many of these organisations are run by enthusiasts, they’ve been run on a knife edge, they’re incredibly Q310 Damian Collins: There was an article in the lean and efficient. If you have a small group that’s press at the weekend, which drew on criticism the interested in restoring church organs, or historic National Trust has received for what was called the fountains, you don’t have lavish headquarters in Disneyfication of heritage: people in period costumes Strasbourg. These organisations are very efficiently and events, which the National Trust would argue run, and very keenly run, because people are involved don’t detract from the quality of the heritage and help with them out of love. Anything that would reduce the enrich the visitor experience; I wonder what your amount of passion that brings such public benefit, I views are on that? think, would be harmful. So let’s look at efficiencies Mr Harley: Perhaps I could start off, as not exactly that we can get by working together, but let’s not try the rival but the other side in the opening of historic to get rid of the distinctiveness that brings so much to houses. I think it’s terrific what they’re doing. It’s the heritage sector. exciting what they’re doing. In some ways it’s what the private owners have been doing for a very long Q308 Damian Collins: I think it’s an interesting time, because they are living in the houses, and they point, and I declare my own interest, as I’m chairman don’t have to create these stories because the stories of a heritage group in my constituency, which is exist in the houses through the owners. So I welcome focused on the First World War; it is certainly lean, in it. But I think the private sector—not being terms of not much overhead. But do you think, in complacent—is doing that already, to a large extent. cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr Edward Harley, Ms Carole Souter and Mr Loyd Grossman OBE

Ms Souter: I don’t think it matters how you present Mr Grossman: I don’t think the heritage sector offers things, provided you do it right. If you’re telling many naming opportunities unfortunately, but we have stories that aren’t true, or you’re making things up, been very lucky in this country, in that we do have a that’s not any benefit to anybody. But ways of number of extremely rich individuals who have been engaging people so that they go away enthusiastic and very generous in terms of benefactions. The cultural maybe want to find out a bit more themselves, maybe sector would be very, very much weaker if it weren’t want to take it to the next step and do some research, for the generosity of the Westons, the Wolfsons, Harry or whatever, can only be welcomed. We’ve seen some Djanogly, Vivien Duffield, and so on. However, what extraordinary projects that have started very much on concerns me is that we’re not doing enough to what you might call “the lighter end of encourage philanthropy at a much more modest level. understanding”, but have spread out and enabled I think there always will be, thankfully, people to give people to find out more about the heritage and led to £5 million and £10 million to big projects. But what a deeper understanding. I think it’s very alarming, in are we doing to encourage people on average earnings a way, to be worried that people enjoying themselves to become active philanthropists, at a regular but is somehow not proper. I think it’s perfectly modest level? Let’s think about how we can make the reasonable for people to enjoy themselves when philanthropy process more transparent, and how we they’re looking at heritage. can enable more people to experience the satisfaction Mr Grossman: I share Edward and Carole’s views of supporting things. I feel we don’t concentrate here. I’m all in favour of popular presentation, but I enough on modest philanthropy and I would like to think the real cause for concern is: we need to make see something done there. sure that the cuts do not result in any reduction in the scholarship and the technical skill that has to underlie Q312 Dr Coffey: Loyd, can I take you back to the any popular presentation. It’s no good being populist point you just made about your concern about lack of and reaching out to people, unless you have a really investment in ongoing scholarship and research? What sound basis from which to do that. I think there is a makes you say that, and isn’t it in the hand of the significant danger that scholarship and technical organisations that you’re involved in to make sure that expertise in the heritage sector, and in the museums doesn’t happen? and galleries sector too, is going to suffer considerably Mr Grossman: It’s very much in the hands of every as a result of cuts. organisation. But of course public bodies, especially, very much live or die by their visitor figures. Visitor Q311 Damian Collins: One final question, which is figures have been very much driven by the excellence linked to that, and part of the debate about the of outreach and education programmes over the last Disneyfication of heritage is about bringing in money; 13 years in particular. When budgets are being bringing in visitor attractions, bringing in private constrained my fear, and this is a fear rather than support. There is a lot of talk about the role of something based on solid fact, but I think it is a fear philanthropy and investment from private individuals. with some basis, is that the less glamorous, less public I just wonder what your view was—as it’s topical— facing activities—that is scholarship, curation and on the criticism that was received from Lloyd technical skill—are potentially very vulnerable at the Dorfman’s very generous donation to the National moment, simply because they’re not so public facing. Theatre, in terms of whether that is an appropriate level of recognition. Certainly, I don’t think anyone Q313 Dr Coffey: Do you see that in your thinks that Carnegie Hall is devalued or the organisations? Well, not the HLF but— Guggenheim is devalued because they were given by Mr Harley: No. private donors, and I wondered what your views were on that bequest and whether you would welcome Q314 Mr Sanders: When he gave evidence, Dr something similar in the heritage field. Simon Thurley was asked questions about the English Ms Souter: I think private philanthropy is essential Heritage budget and, unfortunately, he didn’t seem to and always has been through the years. If we look at come up to explain what activities were essential, the public parks programme, for example, that the which ones they could drop, or the consequences for HLF has supported—in some cases with the Big the heritage sector, as a whole, of the cuts that the Lottery Fund—very often what we’re doing is putting sector is facing. Which activities do you think English heart back into the big Victorian parks that were Heritage should be prioritising? created by philanthropists to provide a breathing space Mr Harley: Shall I start from the private owner, for their workers. So I think it’s absolutely essential perhaps. We receive a very small level of grant, we’re that we recognise and support philanthropy, and I very grateful for it but it’s averaged at less than £1 personally have no particular concerns about naming million over the last five years from English Heritage. rights, if you like. I think that the important thing is So, as recipients of grants, that is not an issue for the that we’re clear that all contributions are properly private owner. But I think the expert advice is hugely respected and recognised. Not everyone is in the important and that is on two levels: one is to local position to give a donation of that size but someone authorities through conservation officers, where I who is a regular supporter of a museum, for example, think it’s absolutely critical that the right advice is needs to be recognised and part of that museum given. But I think there’s also the area of the direct family. So I think there is a whole range of ways of advice to owners of listed buildings, which is also recognising philanthropy, and it’s important to do it valuable. All our owners own listed buildings, almost and not to take it for granted. all Grade One to Grade Two Star. So it is that cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr Edward Harley, Ms Carole Souter and Mr Loyd Grossman OBE provision of expert advice. Now there have been some are. Would you like to have a go at just picking one statements from English Heritage that that will be non-essential service? prioritised, which I think is tremendous, but there Ms Souter: The honest answer to that is no. Partly have also been some recent redundancies in that area, because I think any organisation in the current so I think that is one of the most critical areas. climate, facing that level of reduction, has to look at Mr Grossman: Because English Heritage does so its own areas and functions. many different things, it is very hard to pin down what their core functions may be. Certainly, the pastoral Q316 Mr Sanders: It is an unfair question to ask, role they play, in regard to the rest of the sector, is isn’t it, and I accept that. So, can I just ask: are you incredibly important. English Heritage does provide confident that English Heritage will make the significant funding to the National Amenity Societies necessary decisions now to protect front-line heritage and other voluntary bodies, for example to the services and sites? Historic Chapels Trust. There is a whole body of Ms Souter: I am, because I’ve spent a lot of time organisations, and a whole range of activities, that are talking with them about what their approach to this is partially funded by English Heritage, to the immense and how they’re going to prioritise exactly the sorts benefit of the public. Yet are those pastoral activities of things we’ve been talking about. It will involve real core functions? I don’t know. Certainly, I would change and will be extremely hard, not just for the imagine that expert advice, planning, designation, staff of the organisation but those who interact with looking after the huge range of properties they have, it. Whilst every organisation can make cuts in are core functions. But I hope that, as they consider administration, anyone that suggests you can take out how to deal with these cuts, EH is aware of the fact 32%, without real change and looking hard at that they must be a sector leader and that they must everything, will be foolish, I think. But, yes, I am exercise pastoral responsibility for other smaller confident that their approach is very much focused on organisations throughout the country. what they need to deliver and what they alone can Ms Souter: I would agree entirely with that, and with deliver for the future. the areas that Loyd and Edward have identified. I Mr Harley: I think there probably is some scope, think English Heritage’s core role is to be the expert although there would be, dare I say, competition with and to be the adviser in those areas, both outwards to us in some ways were their commercial activities to the public and the owners of heritage and, if you like, be extended, and I’m sure that will be an area they’ll upwards and into the Department and giving advice be looking at closely. there. The one pastoral area I would add, I think, is to the professional groups. They have done a lot of work Q317 Chair: You have all identified expertise as one in recent years in supporting the historic environment of the absolutely critical things to maintain. This staff in local authorities, and that has encouraged a Committee, in a previous inquiry, expressed some consistency and a shared understanding of how to go concern about the decline in the number of experts, about the role. That I think is incredibly important. at local authority level particularly, and we expressed Again it’s very confusing, particularly for private scepticism then at the assurances that this was not a owners, if the staff of one authority take one approach problem. Local authorities are now looking at even to what needs to be done and a different authority greater cutbacks and this is an area that is not ring down the road is saying something quite different. So fenced, so is likely to be an easy target. Is there a I think that consistency and that expert advice, the danger we are going to suffer a loss that is designation, of course, and the leadership role, as irreplaceable? being the body that has the authority of expertise, are Mr Grossman: Yes, I think there is a danger that a all core functions for English Heritage. skills base and a knowledge base, which has been You will know that the Secretary of State has asked built up very carefully over many decades, is going us to work, over the next few weeks, with English to be eroded very quickly. Rebuilding that skills and Heritage to make sure that we are clear to people knowledge base will be extraordinarily difficult. I about what the respective roles of the two think I’m right in saying that I recently saw that organisations are, in areas where there might be Nottinghamshire County Council are proposing a 75% perceived to be an overlap. That is something that cut to their conservation budget. The long-term effects we’re working with them on now, and I think it is the of cuts to conservation budgets, at local authority responsibility of both our organisations to be clear that level, will be very severe indeed. Because, of course, if people want help, advice, support, funding, in the all of us who work in heritage, and are interested in area of heritage, they know exactly which of us does it, are aware of the fact that it’s easier to lose heritage what and know who to go to first. That is something than to maintain heritage. Heritage is incredibly where I think we can tidy up and clarify some of those fragile and damage can be done, which will be areas. But I think the core functions for English unaffordable to repair if we lose the very considerable Heritage are as everyone has set out. amount of conservation expertise that we, in this country, have built up. We have some of the best Q315 Mr Sanders: From your answers there are an conservation expertise in the world and that’s in enormous number of core functions that they are danger of going. tasked with, and faced with a 32% budget and a Mr Harley: I would agree with Loyd, wholeheartedly. further 50% on administration, they are going to have I think the other thing is that buildings do need to to focus on essential services. It is difficult to get adapt to survive sometimes. Many of our owners have anybody to work out what the non-essential services ranges of stables and ancillary buildings that they cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr Edward Harley, Ms Carole Souter and Mr Loyd Grossman OBE need to adapt or evolve and commercial uses have to the team in support. I think, for us, it’s about be found for them. If the planning decisions are consciously putting some of our resource into making slower; if they’re ill-informed; if they’re inconsistent; sure that we don’t miss those people and that they do if the knee-jerk reaction is “No”, rather than thinking know how to get to us. It is also about having teams a bit more widely about what might happen to those around the UK so that you don’t have to ring London buildings that is all going to be very negative, both and ask them about your small project in Inverclyde, for my sector and I think for heritage as a whole. that you can talk to people who are more local and Chair: Yes, absolutely. David Cairns. who know what the issues are. I think all those things together can help us make sure that we don’t miss Q318 David Cairns: I would like to pick up on some people. of the issues that you raised in answer to Tom Of course, we also tier our grant programmes so that Watson’s questions. You all spoke about the there’s a budget available for small projects, larger importance of the voluntary sector here. The voluntary projects and very big projects, which again helps sector itself is an enormous spectrum of organisations, make sure that you don’t have to compete for your from great big organisations, with staff and capacity, £5,000 project against the £5 million project from a right through to pure volunteerism—the church bell bigger organisation. So I think all those things can freaks that you mentioned, or the Inverclyde Tourist help. Group, which is a fantastic little organisation of Mr Grossman: Volunteering is hugely important to volunteers who meet people who come off the cruise the heritage sector and I think we estimate there are ships and show them the beautiful scenery and about 500,000 regular volunteers. But there are a industrial heritage of Inverclyde. How do you ensure, couple of issues around volunteering. One of the chief in an era of shrinking budgets, that the organisations, ones is the fact that volunteering is a complement to which have the heft and the capacity for form filling— professional staff; it is not a substitute for professional who speak the language, who know the way around staff. I think it’s important to bear that in mind. this—don’t end up getting more advantage than the Bearing that in mind, and also building on what well-meaning but inevitably näive volunteers, for Carole said, if we expect volunteers to do more—and whom this is not their livelihood but something that I think they should because I think our heritage they do for a passion. How do we ensure that they are volunteers find the experience tremendously not only protected but given advantage over the bigger enriching—we have to provide them with the right end of the voluntary sector, who know their way level of mentoring; we have to provide them with the around this stuff? right level of access; we have to provide a supportive Ms Souter: Let me start this because it’s something I culture for them, not just look at them as cannon feel completely passionate about. If I take the example fodder that can be thrown into the breach because we of applying for lottery funding: it’s a process; it has have to cut down on the number of professional staff. to be auditable; it has to be accountable in public So it’s a slow build, it’s built very well though. I think money terms, so that inevitably means some form the heritage sector has excelled at the public filling. We know that that is off-putting, particularly engagement of volunteers, but we need to keep to groups where everyone is a volunteer: they don’t building volunteer management capacity and quite have time; they’re doing it in the evenings, Saturday often that requires a certain amount of central support mornings, under pressure to do other things. A from organisations, like English Heritage, for number of years ago we introduced a small team of example, which is why it’s so important that they do development staff, so each of our regional and country continue their pastoral responsibility to smaller teams will have two or three staff whose role it is, organisations within the sector. specifically, to go out and engage with the sorts of organisations, the sorts of people who have not Q319 David Cairns: This is to Carole: if you are traditionally been funded by the Heritage Lottery cutting your admin costs, as you said you were, and Fund. They will do that both across themes, or sectors, taking out people, is the temptation to say, and in specific geographic areas where we haven’t had “Administratively, it doesn’t take an awful lot more the level of applications we would have expected. time to process an application for a very large grant, That sort of proactive engagement with people—first in fact it takes more time to process lots of small of all, to remind people what we do, what we fund and grants”, and there could be an almost imperceptible what they can apply for—is, I think, a very important shift towards large grants because you can do them, element of making sure that we do get the range of whereas if you’re doing lots and lots of small grants applications from across the sector. it could take more time. But I suspect, in most of our Another way of trying to make it easier is working constituencies, unless you represent somewhere that very hard on the simplification of processes, and has Stonehenge or something in it, we are going to be thinking very carefully about the proportionality of talking about small groups of people looking for small what we ask for. So if you want £3,500 to do a small sums of money. What safeguards are you putting in project locally we shouldn’t be asking you to provide place to make sure, again, in the new environment, us with the same level of detail and form filling, as if when you’ve got smaller overheads yourself, that you want £5 million to do a national project of huge we’re not losing sight of the fact that it might take international significance. So we’ve worked a lot in more time to process more small grants but that is past years to make it easier, to have an online two- what you should be doing? page expression of interest, if you like, that people Ms Souter: I agree entirely: that is what we should be can do very quickly and then get a response back from doing, and we’re not expecting to make any cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr Edward Harley, Ms Carole Souter and Mr Loyd Grossman OBE reductions in our development function. We’re not it is worth doing. If we put effort into development taking out any of those staff at all. As I said, we work and it takes three, four, five, six, seven years allocate budgets to the various sizes of grants and we but, at the end of it, you get a community that then will make sure that we carry on putting significant suddenly wants to look for funding, wants to do the amounts of money into the small grants. They are very projects, we need to measure that and we need to successful and very important locally, and at a time follow it through. when you might have expected applications to go The areas that are most difficult for us, and where we down, because people were worried or stressed, or not do have to judge how much effort we can put in, are confident about things, we have good strong levels of where there is nobody else out there who is interested applications for the small grants. in or supporting the work. So it’s incredibly important They are also a great way of getting young people that we recognise that if we have two or three people involved. For example, we have a small grants per region or country, they are not going to completely programme called Young Roots, to engage 13 to 25- transform the local environment. So we will push and year-olds in heritage. Those sorts of projects are push and push, and pick up anyone who shows an absolutely essential for us. If you don’t start at the interest and that we can support, but we can’t do it all grass roots you won’t have the champions of the on our own because, in a sense, that would be self- future. So what we’re looking at is: all the classic sorts defeating. It has to come up from the local of things; better procurement. This year, for example, communities. But that’s absolutely our role: to find we’ve done less paper promotional material and things out who’s there, who’s interested, and how we can like that. We’re not paying to advertise for recruitment support them, and we will keep doing that. where we have vacancies to fill. It’s those sorts of things we’re focusing on. The staff who are there to provide the support to applicants are what we’re Q321 Paul Farrelly: Just on a slightly different about. For us, that’s front-line; that’s what we have to topic. I just wanted to get the panel’s opinion on make sure that we protect. There’s no point us having where we stand at the moment on the availability of a huge amount of money that nobody knows is there conservation expertise across the country, in local and no one can get access to. authorities, before local authorities are asked to make We’ve recently been thinking about how we plan for their own cuts. What’s the current state of play? our future strategic focus, and our board is completely Mr Harley: Well, I think there is very considerable committed to the small level grant giving. It’s conservation expertise in the local authorities but, as absolutely essential for us. As I said, 80% of our you heard a fortnight ago, the numbers of projects go to the voluntary and community sector, conservation officers have fallen by 14% in the past 99% of our projects last year had volunteers as part few years. I think that is the big threat we are partly of the project. It is absolutely fundamental to who we identifying today, that if more go it would be very are and what we do. Heritage and people, the two damaging. things together, that’s what we’re about. Ms Souter: It’s variable. It would be foolish to deny that. There are some places where it’s very good and Q320 David Cairns: Finally, you mentioned the very strong and there are others where it’s less good outreach you do to cold spots, where you’re not and less strong. I think there must be a risk that these getting the level of application or the level of funding are not posts that all authorities will feel able to that you would expect. If you thought I’d been protect in the current climate. parochial up to now then I’m going to be even more parochial. Inverclyde is—and has been for years—one Q322 Paul Farrelly: Just one specific question. I’m of the cold spots for HLF and, despite the excellent the founding patron of a CABE-sponsored work of Colin McLean, your Scottish director, who architectural design centre that from time to time is has been very proactive, we’re still not getting asked to provide different forms of advice, it bolsters through. I suppose I’m looking for an assurance, not local authorities where there are gaps in their expertise so much for Inverclyde but for all the other cold spots, and it is set up as a charitable body. If a body like that this outreach work—which inevitably is time consuming, inevitably is labour intense, inevitably is that, which is itself under threat because CABE is now about building relationships, which may not come to being abolished, came forward with a project to offer anything, and then it’s difficult to measure against conservation advice, which would effectively be whatever targets you have, what the outcome of that replacing or filling gaps in local authority expertise, is was, if in the end you never give them anything—in that a project that Heritage Lottery Fund would look the new climate that you find yourself in, is not going at? to go, that you are going to stick with this business of Ms Souter: I think that would be a very difficult thing outreach to the cold spots and work with them, even for us to take on because we are a project funder. though you could probably tick more boxes by Whilst we’ll provide some revenue funding as part of drawing more people into head office and processing a project, for maybe up to five years or for an activity through more grants more quickly. project that lasts that long, we are not—under our Ms Souter: Yes, we’re going to stick with it; yes, directions—allowed to become an ongoing revenue we’re going to keep doing it and we’ve got an funder. I think the sort of example you’re giving evaluation programme in place, so that we can would be replacement— measure the impacts of the development work, Paul Farrelly: So you very firmly don’t see yourself because that’s one of the ways that I can explain why filling any gap? cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr Edward Harley, Ms Carole Souter and Mr Loyd Grossman OBE

Ms Souter: No, I think that would definitely be a supported in order to keep people working in that area bridge too far for us, in terms of simply replacing and to bring tourists in. I think another area that will funding. be very important to helping support this is skills development: whether that be in tourism skills Q323 Ms Bagshawe: The Prime Minister gave a generally—the welcome, the level of service in the recent speech and said that heritage based tourism support areas, like cafes and hotels and so on—or contributes just over £20 billion to the UK economy actually in the areas that are necessary to maintain the and, if you include full-time jobs and part-time jobs, buildings, to interpret the buildings, to guide people just under 500,000 UK jobs, what do you think needs around them. The sorts of investment in skills that to happen to make quite sure that tourism, led by we’ve made through our Skills for the Future heritage, contributes to our ongoing recovery as much programme, for example, and training bursaries in the as is feasible? past that encourage those skills to stay in the Mr Grossman: Well, we’d obviously like more community, and to be distributed across the investment in the heritage because you have to have community, are absolutely essential; again, to make a product to sell people. We don’t want people coming sure that the quality of the heritage is maintained and to this country—as they do in their millions, largely hence the tourism offer is maintained. to see and enjoy our heritage—to find that that heritage isn’t presented in the shape that they would Q324 Ms Bagshawe: Yes, certainly in my legitimately expect. So any cuts, which have a constituency of Corby, and in east Northamptonshire, detrimental effect on conservation, scholarship, I sometimes think we have more stately homes per presentation, are ultimately going to be damaging to square inch than any other part of the country and it our tourism offer. I also think it’s worth pointing out is a vital part of our rural economy and, indeed, the that it’s not only through tourism that heritage makes industrial heritage of the urban towns in my seat. But a very major contribution to the economy and, following on, to touch on something you mentioned certainly for rural constituencies, it’s worth there briefly, how one decides between, let’s say, remembering that most conservation work, for front-end things that visitors perceive, such as cafes example, is done by small and medium-sized and things that draw people in, or spending the money enterprises. Conservation work makes a very on the maintenance and upkeep of buildings and the significant contribution to our rural economies, so we structural underpinnings, which Mr Grossman talked mustn’t forget that. But certainly, we have to be aware about earlier. Would you say that more investment in of the fact that anything that damages the heritage is heritage attractions positively generates tourism going to damage the level of tourism income from income rather than having it be lost and, if so, how heritage generally. does one measure that? If you are looking to spend Mr Harley: Perhaps I could put the historic houses bit money on generating tourism income, especially in in the context of the speech you were talking about. this particular climate, we’re looking for some Our contribution, historic houses, to tourism is £1.6 measurable outcome. How do you think you can billion and in the VisitBritain graph, which you see quantify the investment in heritage tourism and see frequently, the reason people from overseas come to how it brings money into the economy? this country, the top reason—it’s not the weather, you’ll be surprised to hear—is to see historic houses Ms Souter: A general thing and then a specific: and castles. When they come it also gives them the generally, when we are asked for a grant towards a greatest visitor satisfaction. So I think the historic capital project that has a particular aim of generating houses and castles are a major draw. But there is a economic benefit, increasing visitor numbers, or massive backlog of repairs, and in our survey last year whatever, we ask for a business plan. We ask that the that backlog had gone up from £260 million in 2003 applicant demonstrates why they think those numbers up to £390 million. So that is a major problem and are likely to stack up, where they’re going to come that will lead to some houses being sold, they from and then that has to be monitored and reported frequently don’t open to the public again; it will lead on afterwards. So, on a project by project basis, we to chattels being sold, which diminish the entity. One can tell you very specifically what the outcomes have in eight of our owners have sold significant chattels been. Over the years, we have a rolling series of in the last 10 years. I think a very major problem, as research where we look at samples of projects and far as heritage tourism is concerned, is the backlog of can show you the economic benefit, which tends to be maintenance for these buildings. greater in the larger projects, which is exactly what Ms Bagshawe: Ms Souter? you’d expect. Ms Souter: I think that there are some positive things, But then we recently conducted a piece of work, with and the maintenance of free entry to museums will Oxford Economics, to which a whole range of help support enthusiasm and visitor numbers for those heritage partners contributed, which generated this museums that are subject to that regime. I agree figure of the £20 billion gross of project impact. I entirely, particularly about the importance of heritage think that sort of research that uses an economic tourism outside London and the major conurbations framework that can be applied in a whole host of and I think that’s the area where I’m perhaps most areas, and which therefore stands up and people can nervous about how things will go forward, in the light say, “Yes, okay, we’ve picked it apart. We’ve looked of the current funding situation. at it. These figures are right”, is really important For a small market town with a house or a small because we all know we think it’s incredibly castle, it can be absolutely essential that that is important, we know why we care about it, but there cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr Edward Harley, Ms Carole Souter and Mr Loyd Grossman OBE are times when you have to be able to put the figures for there to be a wonderful optimism bias that applies down on the table and say, “This is it”. in all people who are about to do a project. So it’s Mr Harley: It might be too anecdotal but publicity is amazing how often people, in their early stages of what tourism is about, and the publicity from films is discussion before they put in the formal application, quite interesting, and what that does to visitor will say, “We’re going to do this project and we’re numbers. In the case of the National Trust, Alice in going to have five times as many visitors as a result”, Wonderland was filmed at Antony House, and the because they’re passionate about it and they care visitor numbers are up by four times as a result of that about it, and they believe that is what’s going to publicity. So tourism promotion is a hugely important happen. Part of our role is to say, “Okay, well why thing to bring people to this country. Often, in the case don’t you step back and think about what other of the house and castles, to places in the far reaches attractions there are in the area, what’s the catchment of the country. There are lot near Corby but there are area, how far are people going to travel from? Is five many others dotted all over the country. times really very likely?” Because it’s better for everybody to aim for a realistic two-and-a-half times Q325 Philip Davies: Not wishing to be outdone in visitor numbers, and know how they’re going to get the parochial competition that is going in the there, than to sail on with this glorious optimism that Committee, I have a World Heritage Site in my they’ll produce this wonderful attraction and then constituency at Saltaire, and the Heritage Lottery people will magically come. Fund have given some money to projects in Saltaire, You are absolutely right, there is no point doing for which we’re all very grateful. But I just something perfect and beautiful if there are no roads, wondered—following on from Louise’s questions— there isn’t a hotel for people to stay in when they get how proactive people in the heritage sector were in there, there are no signs and nobody is particularly engaging with the tourism boards, like Welcome to interested in it in the first place, which is why we do Yorkshire, to make sure that, when you give some want people to explain how they will bring people in. grants to a World Heritage Site in Saltaire, that is then I don’t know whether Edward or Loyd want to— followed up, to say, “Well, we’ve given this money. Mr Grossman: Well, I think that one of the beneficial We’ve improved the local park” or whatever it might things that the Regional Cultural Consortiums did, be, “will you now get behind this and try and promote before they were abolished, was that at least they what we’ve done?” provided a forum where heritage organisations, Ms Souter: Shall I start? We, as the HLF, would not cultural organisations and the tourism sector could get do that directly. That’s something that we would together. I definitely feel the lack of such forums at encourage and expect our applicants to be doing. It’s the moment. I think a lot more coordination would be a point—sorry, I can’t remember which question extraordinarily helpful, but at the moment there isn’t referred to that earlier—about the risk of being top a place where the heritage, the tourism industry and down. We’re giving grants to other people who are other cultural attractions get together. I think that running their own projects. Now, what we can do is would be pretty desirable. help to provide advice, support and guidance to say, “Look, we have experience of where things worked in Q327 Philip Davies: We had the ludicrous situation, the past and you might like to think about these a few years ago, when Welcome to Yorkshire things”. We do a lot of that. But because of the way produced some maps of Yorkshire as to where to go that we ask people to think about business planning, and visit and there were all sorts of bizarre places on and so on, I think it encourages that sort of there, like Pontefract and Castleford. Why on earth connection. So people will always be looking for: how anybody would want to visit Pontefract or Castleford, can they get the promotion going, how can they get Lord only knows. Yet we have a World Heritage Site the interest, whether it’s the media, whether it’s a in Saltaire— tourist board, whether it’s just word of mouth, how do Mr Harley: Which wasn’t there. they go about spreading the word? So I think it’s not Philip Davies: —which didn’t even feature on their something that we would do directly as an map. I just wonder if there’s a big opportunity with organisation but it’s the sort of thing we would expect these tourism boards to get the heritage sector on their to see in people’s business planning for the future, radar, because that would indicate they maybe are. and if it’s not there then you ask a question and you Mr Harley: I think it’s a very good point. But I think nudge people. a lot would depend on what happens to such money as was in the RDAs, what the Local Enterprise Q326 Philip Davies: When you were assessing Partnerships (LEPs) look like and what these somebody’s bid, would that be part of the assessment destination management organisations look like and that you did as to what they were going to do to it’s very early days. One would like to think that that encourage tourism, or whatever? Because it comes money just doesn’t disappear because I think there’ll back, I think, to the point that Loyd made at the very be partnerships between those DMOs, in a perfect start, which was: there’s not much point in doing all world, who will be promoting these sites. these things if nobody is able to enjoy them. Ms Souter: Yes, if what you’re looking at is a project Q328 Philip Davies: Carole, finally, from what that relates to an attraction that’s open to the public you’ve said about not wishing to be top down—I and their business plan is about generating visitors and suspect I know what the answer is, but just to income, and so on, then we’ll want to look at how clarify—do you simply sit back and wait for they think they’re going to do that. It’s not unusual applications to come in, in order then to assess what cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr Edward Harley, Ms Carole Souter and Mr Loyd Grossman OBE they are, or do you think to yourself, from a heritage So the withdrawal of RDA funding, I think, is being perspective, strategically, “These are the sort of things very keenly felt everywhere. that we think are important in the country”, and go out and encourage applications? What is your approach? Q330 Paul Farrelly: We have one of these Local Ms Souter: It’s a bit of both, in that we don’t go out Enterprise Partnerships in my area. The main problem and solicit specific applications for projects. We don’t with these LEPs, judging by all the comments that are go to Pontefract and say, “We’d like a particular made, is that the Government hasn’t decided what it project from you, please”. So, for most of our open wants them to do. Is that a concern? grants programmes, we rely on people coming to us Mr Harley: I would echo Loyd’s point about the and the thing we need to do there is to make sure they seriousness of the disappearance and I think the know that we’re there and the sorts of things we fund. tourism promotion side is a very important part of But we also have a range of targeted programmes for that as well. The North West Development Agency areas, where we’ve identified that this is an area of (NWDA), was a particularly important one in that heritage that needs to have a certain amount of money field, and I think it is unclear who is going to pick up spent on it. The obvious example is Parks for People. some of the pieces. We’ve been running our parks programme for years now and it has made a huge impact on historic parks Q331 Chair: Can I just finish off? We have found in across the country. Also, we run a Landscape the past that, when we are looking at support for Partnership Scheme, which is larger-scale landscape heritage, one of the problems has been the lack of projects, the Townscape Heritage Initiatives, because information; even the number of listed buildings there we identified that very often the heart—particularly of are out there, what state they’re in and what their markets towns—rests with their historical requirements are, and so on. Do you see that as a infrastructure. If you can bring the heart of a town problem and what should be done to address it? back, you can regenerate the whole town and the area. Ms Souter: I think this is an area where we’re straight So there are schemes of that kind. back into the territory we were talking about earlier, We have a joint scheme with English Heritage for of expertise. I think the work that English Heritage places of worship. We have occasional targeted has done over the past years, in particular on schemes, such as Skills for the Future, where we identifying heritage at risk in different areas of the identified that, given the economic climate and given heritage, has given us a hugely improved baseline to the lack of skills, we could do something by offering work from. Obviously the statutory designation lists a series of training opportunities. We’ve run a one- are, I think, generally speaking, pretty good but I think off programme in the past to encourage museums and that the work that English Heritage has been doing in galleries to collect, because we were concerned about England has been very important. For us, obviously, the lack of expertise in collecting in some areas. So we work with the comparable bodies in the other major programmes are open access and people come countries and, of course, also the natural environment to us, but if we identify a theme or an area, where we bodies. There are a range of designations and think there needs to be more activity, we will run a identifications of natural environment at risk as well. particular targeted programme in that area. So at the moment, that wouldn’t be one of my top priority areas of concern. Q329 Paul Farrelly: When Philip said he was not Mr Grossman: I think that the work that HLF has going to be outdone I almost imagined, for a moment, done, in monitoring the success of their projects, has he was going to offer, on behalf of Saltaire, all the been hugely helpful to everyone in this sector, and the money back, but no such luck. publication of Heritage Counts by English Heritage. I This is just a very quick question. The Regional think we’re now approaching the 10th anniversary of Development Agencies have just been mentioned in it; so that now gives us a very good run of data. It’s passing and, of course, they’re being culled as well. very important to me that EH find the funding to carry Will their demise spark any concerns or will nobody on Heritage Counts because, of course, its value is bat an eyelid? much greater by the fact of its being, as it were, an Mr Grossman: I think their demise will spark official document. So I don’t feel that a lack of data considerable concerns because they were among the is necessarily something that is harming the sector; major investors in heritage-led regeneration projects. although, of course, anything more to do with For example, if I look at a project that I’ve been demonstrating economic impact would be extremely involved with, which is the regeneration of the helpful. neighbourhood around All Souls Church in Bolton, in Mr Harley: I think the danger is that it stops. I mean which a very fine late Victorian church, by Austin and the HLF work on tourism, which produced that figure Paley, is being adapted for use as a community centre of £20 billion that was so important; if there were by the largely Muslim South Asian community who cutbacks to some of that research I think that would now live around it. A £600,000 grant from the RDA be very damaging. I think we’re in a good position at was cancelled, which means that that project is going the moment but we don’t want to lose it. to be delayed by at least a year and, of course, there Chair: I think we will draw the line there. Can I thank will be knock-on social and developmental effects in the three of you very much. that particular neighbourhood and that part of Bolton. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr David Lee, Dr Tiffany Jenkins and Mr Norman Lebrecht

Examination of Witnesses

Witnesses: Mr David Lee, Editor, The Jackdaw, Dr Tiffany Jenkins, Arts and Society Director, Institute of Ideas and Mr Norman Lebrecht, writer and commentator, gave evidence.

Q332 Chair: Good morning. Can I welcome the stimulating, sustaining and encouraging the arts in three of you to the second part of this morning’s this country. session and, in particular, welcome David Lee, the What is wrong with the Arts Council? That’s the chief editor of The Jackdaw, Dr Tiffany Jenkins, of the thing that’s wrong with it. What one can do about it, Institute of Ideas, and Norman Lebrecht. there are two options: either abolition and Tom Watson, we will start with you. reconstruction or reformation of the Arts Council, as it stands now. I think reform is long overdue. I’ve Q333 Mr Watson: Good afternoon. Thanks for been urging it for well over a decade. This is an hanging around for us. What is so bad about the Arts organisation that, instead of being itself an incubus for Council? the arts and an incubus for arts administration—some Dr Jenkins: If I start, I don’t think the Arts Council of the best administrators in this country began their should be scapegoated for a number of problems professional lives within the Arts Council. Talk to within the arts sector. That would be my first point. I Nicholas Serota at the Tate; he learned everything he think what you’ve seen, over the last 15 to 20 years, knows from a period at the Arts Council. There are is a diminishing of what the arts are for, across two managers of London orchestras who began at the society, that has been reflected in arts organisations. Arts Council. Initially they were—I think under the Tories—asked Today, we don’t find that any more. What we find are to perform some sort of economic output and—under policy wonks, BBC cast-offs; a range of people in Labour—social outputs. I think that has impacted mid-life, and in mid-career, who have found upon the Arts Council but they’re not responsible for themselves a little niche within the Arts Council and that, and I think there has been a recognition of that are protected by a whole range of political correctness. within arts organisations. So I think that shift has been With respect for the organisation and with respect to recognised and pulled back from. everything that it has achieved, that, I think, is what Mr Watson: Norman? needs the serious reform. Mr Lebrecht: I’m probably not going to agree entirely with what Tiffany has just said. I’ve spent a part of Q334 Mr Watson: David, reform or abolition? my professional life looking at the origins and the Mr Lee: I’m only going to speak about the visual arts, application of arts funding in this country, which, of because that’s all I know about, and I would say they course, begins with that incredibly romantic moment have made no case for continued funding of the visual at the end of the war where Maynard Keynes goes to arts. In fact they’ve done precisely the opposite. I Cabinet and says, “We’re facing an economic think if we were starting a system of funding the Dunkirk. We have no resources. We have no shipping. visual arts with public money, we’d look at the way We have no industry. We have no foreign reserves. we do it now as an example of how not to do it. I We’re probably going to have to impose bread think they have, over the last 20 or 30 years, focused rationing, which we managed to get through the war on one very small area of art that they have promoted without doing, and, by the way, I want £500,000 for to the exclusion of all the others. If you consider that the arts”. In fact, he received £235,000, which is £9.4 contemporary art is a very broad spectrum of activity, million in today’s terms. on one side you might have the still lifes of William So the original Keynesian idea, the creation of the Packer, Eric Rimmington, James Gillick—artists you Arts Council, was there to do two things: firstly, to won’t have heard of—and on the other side you have stimulate the nation’s creativity at the moment of its the kinds of work that get nominated for the Turner lowest economic ebb; to flourish ideas and to create a Prize: piles of ash, piles of clothes, piles of sweets, new industry; and, at the other times, to add to the joy piles of virtually anything. of nations. Keynes kept talking about Merrie England, In between there is a whole range of other work, “We want to bring Merrie England back. People are abstract painting, and so on and so forth. Now, the really down after the war. Let’s cheer them up a bit”. Arts Council has exclusively funded and promoted So there is an element both of economic benefit in the through its galleries one area of this work and that’s arts and of adding to the gaiety of the nation. the reason, when the Arts Council funds are cut by Now, what has become of the Arts Council in the 30%, it will affect 1% of artists in this country period since then—the 65 years since then—is a body because the other 99% are effectively disfranchised by that is almost unrecognisable from first principles. them. They know that they are the wrong kinds of First principles were: distribute small sums of money; artists, because the Arts Council only supports and encourage the arts wherever you think there is a promotes what it has designated as the “right kinds prospect of success. That was Keynes’ channel. Today of artists” who produce what they call “challenging we have a body that spends more than a quarter of its contemporary art”. It’s an absolute scandal that they funding on non-arts projects; on its own have got away with it for so long. administration, on things like social equality and justice and education, and a whole range of things that Q335 Mr Watson: In your recent editorial, where have nothing to do with the arts. The Arts Council has you talk about the £625 million of our money and the become quite removed from the process of Arts Council blathering on about cuts and forecasting cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr David Lee, Dr Tiffany Jenkins and Mr Norman Lebrecht a return to the Stone Age, are you saying there is no the same work which the Tate Gallery already owns role for the state to distribute that £625 million? and don’t have on show.2 Mr Lee: Yes, I’m sure there is in capital investment— heavy arts, like music, theatre and other things—but I Q337 Mr Watson: Is there any reason why the Arts think if you’re going to have a system where you Council or the Government should be building its support contemporary visual artists, it must recognise own collection? excellence wherever it is across this spectrum and not Mr Lee: I can’t think of any. I think there is a good case for combining them all together, so that just in one corner. The Arts Council could quite easily everybody can use the 72,000 works in the Tate save vast amounts of cash by closing the Institute of Gallery stores that are not on show. If they all had a Contemporary Arts (ICA), which has done a terrible collection of works from which they could borrow, job in the last 20 years and whose position and that would make sense. But there is no point in the function has been usurped by plenty of other galleries; British Council having 8,500 works that have been they could privatise the Serpentine Gallery, which accumulated over 60 years—the same amount of time only serves about half a dozen galleries in the West as the Arts Council collection—if they don’t show End of London, and they could close down probably them and nobody knows where they are. half of the other seven galleries in London, which they support and which they encourage to show only the Q338 Mr Watson: So we need a big clear-out is kind of work by young artists working in a what you’re saying? conceptual manner. Mr Lee: We need an amazing clear-out and now is the moment. I’d like to give you one other example of my local art gallery, since you’re all talking about Q336 Mr Watson: So none of you are calling for the your constituencies, my local art gallery in Bury in Arts Council to be abolished; you just think it’s Lancashire, which a couple of years ago sold a work useless at doing its job? by LS Lowry. I was dead against it. I don’t think Dr Jenkins: I think there’s a role for the Arts Council museums should sell assets simply in order to cover and that is to administer state funding. I think public the incompetence of local councillors, which was the subsidy is very important for the arts, both because it case in this instance. Now, when I went behind that is practically the best way to do things and also it’s a sale—it fetched, incidentally, £1.4 million; filled the social good. But I think, in recent times, the priorities hole in the local council’s budget and also allowed of the arts sector in general—not just the Arts them to build a library in Ramsbottom. I went behind Council, although they do epitomise it—has been that and, within 10 miles of Bury Art Gallery, there were over 400 works by LS Lowry in public extrinsic to the arts, i.e. instrumental purposes. So in collections, over 3503 of which were not on show at that context I think they have become disorientated any one time. The Whitworth Art Gallery had 254; and you have had the emergence of all sorts of Manchester City Art Gallery had 205. None of these projects that are about participation, not about art. You works was on show. Now, if there was some system mentioned the public when you were talking, David. for some kind of consensus that you have a general I think that’s one example of many because I think we national collection that you can then select from, we have a disorientated sector and the purpose of what wouldn’t have all these problems. We could save a they do is unclear, and that is when waste happens. fortune by selling off vast quantities of work that are Mr Lee: The purpose of what they do is very unclear in stock and are duplicates of what we already have. also in their collecting propensities, with the Arts Council Collection. As Norman has indicated, it Q339 Mr Watson: Norman, perhaps you could add started as one thing and has transmogrified into as well: you recently called for the chair and the chief something completely different so that now the Arts executive of the Arts Council to resign. Who should Council Collection is duplicating the purchases of the they be replaced by? Mr Lebrecht: I said that it would have been the Government Art Collection, the British Council and honourable thing for them to resign. It would also be the Tate Gallery. While I was researching yesterday, I the traditional thing and the British thing. When you came across the fact that the Arts Council has recently lose a very public argument and you’re shown to have bought a work by Jeremy Deller. The Tate Gallery has failed your sector, generally the good thing to do is to five major works by Jeremy Deller, four of which are step down. not on display. Mr Watson: You’ve made a contentious comment The Arts Council have also very recently bought nine there. I’m going to push you a little bit. You can’t works by Wolfgang Tillmans, a German artist who is write a column and say they’ve got to clear off a trustee of the Tate Gallery. The Tate Gallery already without having some idea of what should— owns 651 works by Wolfgang Tillmans, none of Mr Lebrecht: There has to be a public process in which is currently on display. Now, you can go across which their successor would be chosen. Can I just say, all manner of public bodies and identify these areas 2 Note by witness: the work by Jeremy Deller was in fact in of grotesque wastage. I’d like to give you one other all four collections not just the Government Art Collection and the Tate, the other two being the Arts Council and the example: the Government Art Collection has also British Council, recently bought a work by Jeremy Deller. It is exactly 3 Witness correction: 305 4 Witness correction: 13 1 Witness correction: 63 5 Witness correction: 19 cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr David Lee, Dr Tiffany Jenkins and Mr Norman Lebrecht though, before one even gets to that process of something like the Arts Council is needed but if it is choosing a successor or choosing successors, we do to be the Arts Council of England then it probably need to reconstitute the Arts Council because a large needs a redrafting of its Royal Charter. part of it is fiction. Keynes designated it as an arms- Dr Jenkins: I would agree with that but I would make length body. Much of what it does is no longer arms- the point again that the Arts Council doesn’t exist in length. It’s not fingernail-length. It’s not even cuticle- a vacuum. It’s not that you have these people on length. It is directly manipulated by the Department Foxworth Street, or wherever they are now, in of Culture. Decisions dealing with the major clients— Millbank, going against the grain. You have had for the Southbank, for the Royal Opera House, for priorities pushed down from DCMS instructing the the National Theatre, English National Opera and the arts, across the board, to become centres of social Royal Shakespeare Company—are all made within inclusion. You’ve had immense emphasis on the Department and rubber-stamped by the Arts participation. I was here this morning listening to the Council. heritage crowd and I heard “Big Society”, The actual question of the allocation of cuts was “wellbeing”; all these buzz words. It’s entirely dictated by Government and reluctantly accepted by understandable, but the point is that they are distorting the Arts Council. So there are two issues here. One is: the arts and they have distorted, to some extent, the do we then take the major companies and put them Arts Council. So the Arts Council do not exist in a within the Department and reconstitute the Arts vacuum here. So we have to be very careful that, when Council as a God of small beginnings? Or do we we’re assessing what the problem is and how to make recreate the Arts Council as a genuinely independent it better, we don’t just have a go at the Arts Council body—as an advocate for the arts, as a lobbyist for the and throw some names around. arts—operating with smaller and much more targeted funds? These, I think, are the big questions. Q342 Mr Watson: In 2009 you talked about shrill Who should lead that organisation? Clearly, as a chair, voices attacking the Arts Council and it’s time we it has to be someone with the confidence of valued what ACE could do rather than removing it Government. Again, that has always been the tradition altogether. What can ACE do that it isn’t doing now? and practice within this country and the present chair Dr Jenkins: It can focus on artistic merit but it does belongs to the last Government. mean judgements and maybe David would disagree with the judgements they make, and maybe I would— Q340 Mr Watson: Come on, take a punt; give us a and Norman. But that’s inevitable and that’s not a few names. negative thing. We should always row about what we Mr Lebrecht: Off the top of my head, and one who think is good and why. I don’t think these arguments would be completely non-contentious and with great are being had enough. I think instead we’re talking experience in administration and in the arts, John about participation and monies being spent on Tusa. audience research and visitor research and diversity Mr Watson: Not Nicholas Serota? policies, and all these extrinsic and, I think, Mr Lebrecht: He has a job to do at the Tate. distorting principles. Mr Watson: There’s a great position for him to have, isn’t it; chairing the Arts Council? Q343 Mr Watson: I like you three. I like what you Mr Lebrecht: Well, you couldn’t do both. I think it write. But what I’m getting from you is, basically, that would be tricky to do both. you don’t agree with the decisions they’ve made but you’re not providing an alternative model of getting Q341 Mr Watson: Let me just draw you—I’m a these young artists for the future. teasing you a little bit and I shouldn’t; I’m on the Mr Lebrecht: I’m sorry to interrupt. It isn’t a matter Committee and I apologise to the Chairman—on of individual decisions. It is a matter of public probity public subsidy for grass-roots artists. Do you think and of the people who are making these decisions. there is a role for public subsidy to stimulate grass- When you have—and this is without precedent in the roots artists? You have very big problems with the history of arts funding—an official from the way the Arts Council is currently organised; the way Department of Culture, who is parachuted into the it provides funds, and I’m trying to get to your Arts Council as its new chief executive, then the philosophy behind that. How can we give public distance between Government and the Arts Council subsidy to make that joyous thing happen that Keynes simply disappears and the decisions that are made had a vision for in 1946? become political decisions rather than arts-based Mr Lebrecht: Firstly, we support large institutions that decisions. We need to get back to the point where are open to all sorts of ideas. That’s the first thing, we’re making arts-based decisions and I think we’re and that’s non-contentious and that will continue to probably all agreed on that. happen. Secondly, and I think we take Keynes’ Mr Lee: I don’t think young artists need the Arts phrase—Keynes’ original phrase, “Those interesting Council to exist in order to produce good work. It’s a things with a prospect of success”—obviously, you complete fallacy. Picasso didn’t apply for an Arts have to have assessors who judge whether somebody Council grant when he was thinking of inventing who is doing something new, whether it’s in the visual cubism. You can almost imagine his application form, arts or in the performing arts, has a prospect of “I’m thinking of challenging the notions of depicting success, has a viable idea. For that you need a body space from a transgender perspective”. It’s just that contains proper assessors, let’s call it “the Arts nonsense. The work will be created irrespective of the Council” for want of something else. I do believe that existence of the Arts Council. My point is that if we cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr David Lee, Dr Tiffany Jenkins and Mr Norman Lebrecht have public funding of the arts, it shouldn’t be UK Film Council is abolished, don’t give us back to prejudiced in one direction rather than the others. All the Arts Council”. So their standing in the film sector, these galleries that are subsidised by the Arts Council from previous experience, is not high. We’ve heard all show the same work by the same general age group that their standing in the visual arts sector is not high. of people. They do not show any more like they did Are there other corners or centre stages of the arts when the Arts Council was first formed in its first 30 sector, where the Arts Council is not considered very years—it was almost an exemplary institution for highly at all? Which other areas would you point to? public funding. It funded young artists with work; Dr Jenkins: I think the Arts Council has become a buying their work for the Arts Council Collection, scapegoat for dissatisfaction across the board and that which is a good use of an Arts Council Collection. It is why, although I’m a critic of the Arts Council, I funded people to make historical surveys. It put on would be a little bit concerned that we don’t intensify retrospectives of elderly artists who needed that with a deleterious impact. retrospectives and can’t get them anywhere now. Mr Lebrecht: I think there are pockets of satisfaction, But instead what they’ve done is they’ve talked there are pockets of approval and there are pockets of themselves into this corner, where they’re only enthusiasm, which are very often a consequence of interested in certain things and we have to clear out one particular official, in one particular area, who is the existing organisation and replace it with people doing outstandingly good unsung work. But the who are a little more open-minded, a little more organisation as a whole sits very heavily on its prepared to make visual artistic judgements about the officials, much more so than it ever did before. There merit of the work on display and show to the public, have been so many management restructures and so through these galleries, a vast range of work, some of much paperwork that needs to be done. It is very which they may even like, instead of work that they difficult for an official to operate independently in the very probably can’t be arsed to go and see. manner intended, in the manner designed in the Royal Charter. In fact I know bodies around the country, Q344 Mr Watson: Before I hand back to the Chair, theatres around the country, that have made a just one last thing. You’ve all been going on about the conscious decision not to apply for Arts Council visual arts. Are you making the case that they should funding; to stick their neck out and to manage within broaden their remit to support on minor areas like jazz the marketplace, however tough that might be; and things like that, or do you want to stick with the because the amount of compliance work that they visual arts? have to do, for a very small Arts Council grant, hugely Dr Jenkins: I think there has been already too much outweighs the benefit of that grant. expansion, in terms of what is considered the arts, and you can see that in the heritage discussion earlier on. Chair: Louise? So I would rather contain it. Mr Watson: So you don’t think jazz is art? Q346 Ms Bagshawe: I have a supplementary. I’m Dr Jenkins: No, jazz can look after itself. It’s fine. very interested in the evidence Mr Lee has given, Mr Watson: Do you think jazz is art? because he has come up with some fascinating Dr Jenkins: Yes, but it can look after itself. There’s specifics about redundancy of investment by the Arts plenty— Council into artists that are already represented, over- Mr Lee: Of course it can be. Anything can be. You represented, and in storage. I was just wondering if, can have some conceptual art that’s really good and Mr Lee, you might consider writing up a few you can have abstract painting that’s really good. examples, whatever you have, and submitting them to There’s excellence in everything and that is what the this Committee in writing because I would be Arts Council should be promoting and encouraging. interested in follow-up on that. Perhaps, contrary to Mr Lebrecht: Is literature art? Of course it is. But what Dr Jenkins has been saying, that she doesn’t should it be looked after by the Arts Council? No, of want the Arts Council to be made a scapegoat of, I course not; it exists within a marketplace. have to say that, having sat through evidence from the Mr Watson: Thank you. Arts Council when they were I think “filleted”—is the Chair: Paul has been waiting. word that was used by my colleague Tom Watson— we did hear example after example of quite Q345 Paul Farrelly: Good questioning is an art as extraordinary waste and redundancy. The evidence Mr well, isn’t it? I haven’t mentioned my constituency Lee has given us today, if true and if it can be backed yet, but I’m going to now. In Newcastle-under-Lyme up, is further evidence of waste and redundancy. I we have a wonderful theatre. It’s the New Victoria wouldn’t see that so much as scapegoating as perhaps Theatre. It’s a theatre-in-the-round. It doesn’t live for pinpointing obvious, concrete, discrete and hand-outs but the Arts Council money is very handy; measureable failings in the way that the Arts Council it helps it to do things it might not otherwise be able is being run. Firstly, would you care to comment on to do, such as outreach, giving kids confidence, and that and, Mr Lee, would you be prepared to submit so on and so forth. It’s being cut. The Arts Council’s some papers on that? I’d like to see some further reputation there is high but I suspect that is because evidence. I think that’s— the Arts Council, once it gives the money over, hasn’t Mr Lee: Sure. I’ll send you the last eight volumes of got its fingerprints all over the New Victoria Theatre. The Jackdaw if you like. You can have chapter and At the opposite extreme, when we were questioning verse on it. the people in the film industry they said, pretty much Ms Bagshawe: Maybe you can give us a one-sheet so to a man and a woman, “Whatever happens after the we can— cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr David Lee, Dr Tiffany Jenkins and Mr Norman Lebrecht

Mr Lee: They’ve been incompetent for years, the Arts predict and always want—but it is not something to Council. I remember, when I first started as editor of be considered in funding applications. It is not Art Review in 1991, it struck me as incredible that the something to be considered when you say, “This is the people who were the major recipients of visual arts priority of the arts”. It is not how you measure them. funds were the people who were on the Visual Arts As we’ve said, a lot of waste that you may be talking Committee voting themselves that money. It was only about, will have been spent on trying to estimate those after a concerted campaign by that astonishing outputs, measure those outputs, study the visitors, ask luminary in these matters, Brian Sewell of the Evening them how their well-being has been increased. That Standard, and myself, that the newspapers got hold of has been wasteful, I think, and I think you’ll probably it and had it changed. There are still things like that find quite a few specific examples of that. going on at the Arts Council that ought to be rectified. Ms Bagshawe: Thank you. Ms Bagshawe: I’m sure you will recognise that Mr Lebrecht: Can I chip in on specificity? One of the generalities—saying, “the Arts Council is rubbish”, areas where the Arts Council has abdicated for a start—don’t cut much ice, whereas specifics like, responsibility and imposed is in the area of decision- “The Arts Council is buying this artist, of which the making where equality and fairness became the Tate already has 65 works in storage that are not priority, rather than viability and what is good for the available on public view”, that I think is a concrete arts. Let me give you two examples. Up until eight obvious waste of public money. If you could get me years ago the Arts Council never funded chamber some examples I would appreciate it. orchestras. There was no need to fund a chamber Mr Lee: Yes. orchestra. If you have an orchestra of 45 players, you can usually recoup what you’re paying them at the Q347 Ms Bagshawe: Dr Jenkins, what is your box office and a little bit more. However, since it was response then to my counter-argument, if you like, funding symphony orchestras, it was decided that it that we are pinpointing specific things, the role of—if was unfair not to be funding chamber orchestras. So maybe not the idea of an Arts Council—a funding they brought them into the fold and now they’ve taken body, but the way it is being run at the moment? them out of the fold and that made no difference at Dr Jenkins: I think, if we want to learn from this all; with funding or without funding, chamber experience, we have to look at the underlying orchestras will continue. influences for those specific examples that you so It was always a part of the Arts Council’s duty to seek rightly want. I would say that we have a general excellence. Over the past decade three of the London distorted understanding of what the arts are for that orchestras have had exactly the same funding from the has influenced decisions made at the arts sector. Now, Arts Council, regardless of the fact that one of them that’s not to underestimate the influence of the Arts operates on very little rehearsal and with very poor Council but it’s to say that they are not the sole programming, very traditional and uninteresting purveyors of this outlook. When you talk about things programming; but, no, everyone shall have prizes. like theatres giving confidence to local communities, Now, the Arts Council exists to say, “This is what we that’s the sort of thing that I’m saying is probably a want to support. This is what we think is good. We problem in the arts sector; those glib, rhetorical, social may be wrong, and we can always turn it around in a inclusion principles. So it’s not just the Arts Council year or two if we are wrong but we need to be making that’s doing this. It has led to great mistakes being those decisions”. Instead it has applied this principle made but if we’re going to learn from it we have to of, “Fairness for all, equality for all, everyone shall look at the underlying influences. have prizes”. That’s what needs to go. Ms Bagshawe: Thank you. Q348 Ms Bagshawe: Dr Jenkins, you know de gustibus non est disputandum: one can’t really Q350 Chair: The Secretary of State in his instruction account for taste and some people would argue that to the Arts Council—and you referred to cuticle- the arts do have a wider social role to promote length distance between DCMS and the Council— inclusion and community cohesion, and that is a made it pretty clear that he wanted to try and protect function, if you like, of the joy of nations and one the regularly funded organisations, with the result that proper evaluation of considering arts projects, art- the discretionary spend is going to be hit based projects and investment in the arts. You reject disproportionately. It almost begs the question about that? why you need an Arts Council if the same Dr Jenkins: I do reject that. I think they will have organisations are going to get the overwhelming social consequences. The arts always have done. But majority of the money every year. once you start prioritising that as the policy imperative Mr Lee: I agree, and it certainly happens in the visual then it starts to distort them. It starts to distort what arts. I think 75% of the money allocated for the visual the— arts is spoken for as soon as it arrives because it goes to the same people year in, year out, on the nod as it Q349 Ms Bagshawe: Would you be happier if it were were. That’s something that could be revised, no not necessarily a driver of art investment but would question about that. They don’t seem to have any kind you accept it might be properly considered as a of justification for their continued funding. It’s just a corollary? matter of routine, it seems to me. If you look at the Dr Jenkins: It depends what you mean by “properly Arts Council reports, in the visual arts, 20 years ago considered”. I think it will have an accidental you will find exactly the same list of recipients as outcome—all sorts of social outputs that you cannot receive them now. cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr David Lee, Dr Tiffany Jenkins and Mr Norman Lebrecht

Q351 Chair: But the political difficulty is that a lot Q353 Chair: But is there not a parallel here in the of small grants, to relatively unknown people, being way that the national museums are directly funded, removed is not going to cause any great stir. leaving the MLA to concentrate on the museums, to Removing the grant from a well-known institution is the smaller ones in the regions, and so forth? Could going to cause a much greater political storm. So that you not apply exactly the same principle to the Arts clearly is why the Government is seeking to try and Council? ensure that doesn’t happen. But is that the right Dr Jenkins: I think what we need to do is rethink the policy? role of the Arts Council and making sure it has artistic Dr Jenkins: What would the alternative be; that you’d equality at the heart of it. I do not want to neuter it or have to change who you fund? break it up further. I don’t think that would help in Chair: The Government say to the Arts Council that any way and I don’t want a situation where regularly they should not necessarily assume that the RFOs are funded organisations are moved closer to the DCMS. the priority to maintain. So keep it as it is, rethink the basis on which we value Dr Jenkins: So long as they can justify it on artistic the arts as a society, and that will strengthen and merit—and maybe there is a way of doing that—then probably improve the Arts Council. It’s not specific I don’t mind if it’s the same organisations. The but, as a general kind of outlook, I think that’s what question is, “Are they the right organisations?” not, you need to look at. “Are they the same organisations?” I think. Mr Lee: In the visual arts what happens is that the Mr Lebrecht: There is a very strong case for Arts Council does not fund the equivalent of the transferring the funding of national institutions into national companies. The bodies it funds in visual arts the Department for Culture, Media and Sport. If you have been invented by the Arts Council to show the were to ask Neil MacGregor at the British Museum kind of work that it wants, and I would have said that would he prefer to be funded directly out of the they shouldn’t pass to the DCMS the nine galleries in Department, or through the Arts Council, there would London that they fund but we should ask the reason be an unequivocal answer and the same from the why they’re funding quite so many. Are they heads of any of the museums and galleries. If you put essential? Does the Arts Council need to show the that question privately, possibly even publicly for the same work in nine galleries in London? Nobody else record, to the heads of Covent Garden, the English has a say in how those galleries are run and how National Opera, the National Theatre and the Royal they’re funded. They’re funded partly by the local Shakespeare Company, I think they would find authority. But there wouldn’t be any point in having themselves a good deal more comfortable in central them run by the DCMS because they’re run by ex- funding. employees of the Arts Council and are thoroughly Given that the Arts Council does not add value in imbued with the Arts Council ethos of challenging anything that it does here, it would simply remove a contemporary art and absolutely nothing else. layer of bureaucracy. I think if one put those four into Chair: Paul? the Department, one could also consider the case of the Southbank Centre, which is the largest recipient Q354 Paul Farrelly: Norman, the former steel- of Arts Council revenue. Then I think one would have making areas of Stoke-on-Trent and Corby would be a slimmer Arts Council and an Arts Council that is united, I think—let alone the Liverpools and much more capable to make the necessary decisions, Manchesters—in accusing you of being London- with institutions that receive £2 million and under. It centric with your selection of crown jewels. How would be much fitter for it. It would have much less would you respond to that? political hassle with the Department because the sums Mr Lebrecht: Well, the crown jewels are in London, over which it is making the decisions are so much aren’t they? They haven’t been moved from the smaller. Then I think one could, out of that perhaps, Tower, or wherever their present repository is, out to help to re-stimulate the Keynesian vision. Stoke or Corby or Manchester or Liverpool. I think Dr Jenkins: I would disagree. I think there is a good these are purely practical considerations. I am deeply reason for a little bit of arms-length principle. I accept concerned about the impact on the provinces, on the what Norman said. I think that has been eroded regions of this country, of the present round of cuts significantly over the last 10 years, but I think that’s and that’s my greatest concern. If the cuts are 10% to unfortunate. 15% over four years, most reasonably well-run organisations are going to be able to accommodate Q352 Chair: But you don’t think that those that within general efficiencies. But if they are added institutions that are funded direct from DCMS—like to with local authority cuts—as will be the case the British Museum, the Science Museum and all the around the country—that is going to result in a very others—suffer as a result of being directly funded? severe depletion of arts provision in certain parts of Dr Jenkins: I don’t think it would be improved by the country. getting them formally closer to Government and the If I may give just one example, one specific: the best DCMS. The DCMS, I’m not convinced, have any kind concert hall in the country, second to none, is of different orientation to the Arts Council and I think Birmingham. It also has the best orchestra outside you just neuter the Arts Council. You hurt it when it’s London, and not just outside London. It is an already suffering some sort of crisis of confidence. I international orchestra of very, very high standing. It don’t think that will improve the Arts Council and you receives an Arts Council grant, which is about to be haven’t challenged the problems underneath it and cut. It is also equally dependent on a city council grant making it closer, formally, to Government would be— that is going to be cut even further. The impact on cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr David Lee, Dr Tiffany Jenkins and Mr Norman Lebrecht those organisations, on organisations like the City of recently received their own cuts. I was wondering if Birmingham Symphony Orchestra (CBSO)—and we you could express your opinion on that organisation’s have a fantastic orchestral revival going on in the effectiveness and how that can perhaps fulfil some of provinces, I mean Liverpool, which one would have the things that concern you that the Arts Council are left for dead five years ago, is now one of the best not doing? orchestras in Europe with the hottest conductor. Dr Jenkins: In my mind I think it’s unfortunate that Bournemouth is stirring again. Manchester, they’re Arts & Business has been cut, although I hope that it doing fantastic work there. I’m afraid in Scotland—it works hard to sustain itself; primarily because—I’m hasn’t quite reached Scotland yet, for all sorts of sure there were problems with it—it worked well as reasons. But there is an orchestral revival and it’s an advocacy organisation, a centralised advocacy being threatened, not by the one wave of cuts but by organisation for philanthropy. My concern would be the two waves of cuts. So in my outlook I wouldn’t that if it goes, then each organisation across the say that I’m London-centric. My deepest concern at country has to do that itself and train itself. That might the moment is for performing arts institutions outside mean duplication. So I’d be slightly concerned about of London. I think they are in grave danger at this that. point. Mr Lee: There is already duplication. Most galleries Mr Lee: I think Norman is absolutely right about a throughout the country already have their fundraisers 15% cut being absorbed. In art galleries around the and PR departments. In fact PR departments in most country, national galleries too, I don’t think the public municipal galleries earn more than the curators, so would notice any difference in what they saw when important is it considered to be. they went in a gallery if you cut them by 10%, 20%, Mr Watson: It’s the same in Government. Norman? 30%. Because essentially what a gallery does, whether Mr Lebrecht: Arts & Business has always been a it’s Manchester City Art Gallery or the Tate, is very thorn in the side of the Arts Council. It does its job simple: they have a collection of very many more very well and it needles the Arts Council and I’m works than they can fit on the wall and they choose afraid the cut has been vindictive. I very much hope some of those works and they put them on the wall. that it can reconstitute itself independently, on a lower A 15% cut to the Tate Gallery is not going to have subsidy level, because it is very much needed. But the any effect or impact on that. issue of whether private funding can replace the loss In fact I’d go as far as to say: you could have a five- of state funding, or the diminution of state funding, is year moratorium on leaving all works in position in not something that’s clear cut and it’s not something to these galleries, so that you could weed out the curators which anyone can give a categorical answer because it whose only jobs in these galleries is to decide where varies from one place to another. they’re going to put them next, in what context, next Again, the regions of the country are going to be worst to which work they’re going to put them next. Most hit because the money, private and corporate, will people go to galleries to look at their favourite works. always gravitate to London. It’s unfortunate, but One of the outcomes of continued increased funding London is where we do business with the rest of the in national and municipal galleries is that works have world. So our foreign clients come here and we want been changed round every five minutes, so that regular visitors to galleries can no longer find their favourite to entertain them in places of great esteem, so we are works. If you go to Tate Millbank, there’s no way you more likely to support Covent Garden and to support can find what you saw six months ago because it’s the Barbican and the London orchestras, and so forth, probably been shifted somewhere else and they’ve than we are to support the orchestra in Birmingham moved things around. It won’t harm these galleries to or in Liverpool or in Manchester. leave things in position for a certain number of years If I take the City of Birmingham Symphony and save the cost of moving them about. Nobody will Orchestra, which is an outstandingly well-run and notice any difference. frugal organisation; it gets only 12% in corporate Chair: Tom and then David. funding. It has the highest uptake of any orchestra in the country in what it gets at the box office. It has Q355 Mr Watson: David, I’m not going to be incredibly good commercial figures, but it’s not tempted to say: you’re making the case for sacking getting the private giving because the private giving curators and building more walls and hanging art for isn’t going to Birmingham. So, as far as London is ever. concerned, it is reasonable to say that private giving Mr Lee: Well, they’ve got 1,000 at the Tate Gallery might make up some of the shortfall. That’s not going and 16 directors. I mean how many directors does it to happen around the country. take to take works from the store and put them on Chair: I think we’ll move on. Damian? the wall? Mr Watson: Okay, I have the point. Can I ask about Q356 Damian Collins: I suppose the previous public policy? We’re obviously looking at the effects question has led nicely up to what I wanted to ask. of the cuts and to see whether, as a Committee, we There has been a lot of discussion in our hearings can recommend to Government practical ways in about the role of philanthropy, private giving, and which they can allow people to enjoy art in Britain what that means for the arts. Some people have more. We’re obviously looking at philanthropic giving suggested that too much private giving makes the arts and what can be done, in a practical sense, to try and too conservative; there’s less risk-taking because it’s fill the void of cuts. One of the institutions we have linked to private money. I just wondered, looking at had give evidence to us is Arts & Business and they’re contemporary visual art in London, who do you think cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

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2 November 2010 Mr David Lee, Dr Tiffany Jenkins and Mr Norman Lebrecht has been the greatest risk-taker: Nicholas Serota or and he said there is a danger with the theatre that there Charles Saatchi? is an obsession with growing the market for people to Mr Lebrecht: Well, it has to be Charles Saatchi go and see plays. So, if anything, the public subsidy because it’s his own money. encourages putting on plays that people don’t want to Mr Lee: The answer is: Charles Saatchi. come and see. They aren’t there for the current theatre Mr Lebrecht: Mr Serota has nothing to lose but his audience. They’re there for the people that don’t go job. Charles Saatchi has his reputation and his to the theatre. Do you think there’s a danger of that in personal wealth on the line. the broader arts environment as well? Mr Lee: I think it’s worth pointing out here, that both Dr Jenkins: Absolutely, no question about it. I think have had a malign influence on what kind of art is the regular core audience has been ignored for the taught in art schools and what kind of art is exhibited sake of chasing a kind of mythical audience; the in the Arts Council galleries. If you go to the young, trendy, hip, non-visitor, traditional— exhibition of Saatchi’s gallery, which opened last Mr Lee: There’s a tyranny of youth now, no question, week, I think you’ll probably find some work there and in the visual arts it’s particularly bad, I’m afraid. that is of no merit whatsoever. Yet we have a very craven press in this country now, which is enslaved to Q359 Damian Collins: My question is about Serota the people who make all the important decisions in and Saatchi—probably, almost answering the the visual arts, and there isn’t anybody there who can question, we’re talking about Charles Saatchi more stand up and say, “This work is, very largely, infantile than Nicholas Serota—but the question was about the and doesn’t deserve the prominence that is being Tate, I think. If people have voiced a concern that given by this person’s influence in the art world”. over-reliance on private giving leads to the Tates or private individuals being more prevalent, that doesn’t Q357 Damian Collins: You mentioned Brian Sewell necessarily mean that you have safe and boring art as earlier. When the new Saatchi Gallery opened in a result of that. Do you think the same is on the other King’s Road, Brian Sewell said that he regarded side; if you have an over-reliance on public subsidy Charles Saatchi as an important prop to the hapless people still answer the call of the paymaster? They’ll inactivity, narrowness and complacency of Tate deliver what whoever is providing the private subsidy Modern. Would you agree with those sentiments and wants; so you’ll get more art that the Arts Council say, regardless of your views on the art in Saatchi’s wants if the Arts Council is paying for it. private collection that he displays publicly, that he’s Mr Lebrecht: Well, we who are not elected have a given a stimulus to the visual arts that the Tate hasn’t? right to take a critical position. We can fight on either Mr Lee: Absolutely. He’s the most influential person side of that barrier. I don’t think you should. I think in the visual arts in the last 25 years. Nobody comes one should look at Nicholas Serota’s career in general anywhere near him. and his achievements in general. I think he’s done Dr Jenkins: But you wouldn’t want to just rely on brilliantly in expanding the Tate from a place on the business. Mixed funding is always ideal because it riverbank where you never went to, because there was gives any organisation greater independence. I do a big roundabout and how do you get there from the think there is a slight anti-business feeling in the arts station and so forth, into a national franchise that world. I think you saw it expressed over the BP everybody knows about and that’s a magnet, and so sponsorship; a bad time to do that and slightly forth. What he does with the art inside is, with respect, unfortunate to do that. So I would counter against that. not the business of funders. It’s the business of critics. Mr Lee: Of course it gives huge influence to the untutored taste of one individual who has, more or Q360 Damian Collins: Well, you’re critics. That’s less, redirected what is produced in art colleges in why you’re here. order to supply the kind of thing that he likes. Art Mr Lee: In answer to your previous question, if you students now try and appeal to him so that they will go around the country, the Arts Council-funded enhance their career, which is a very, very malign galleries in each of the major cities, the one thing that influence. unifies them is the fact that they’re empty and that is Mr Lebrecht: Which leads to a very interesting because they show the kind of work that the Arts schism that is opening within the museum and Council wants to shove relentlessly down our throats galleries world, which is about whether contemporary and not, as Tiffany suggested, something that might arts should be funded at the same level as traditional be a little more, dare I say, popular. I was talking arts. Given that contemporary arts are, on the whole, about a good example to somebody from a radio market driven, and very much market driven by station this morning: Jack Vettriano, a very popular Charles Saatchi, where should we put the diminishing artist. He’s not an artist whose work I admire in any part? Should we put it more into conservation? Should way but he is a very popular artist with a huge we put it more into traditional arts and into purchases audience; indeed the most expensive artist ever sold of things that enhance the collections from the past, at auction in Scotland. There is only one public or into contemporary? I don’t know which directors collection with a work by Jack Vettriano. It’s of museums and galleries you are having before you Kirkcaldy Art Gallery, his home art gallery. but some of them are coming out on either side of Now, why haven’t the Arts Council put on an exhibit that argument. of popular artists’ work and circulated it around the country? Why haven’t they put on an exhibition of Q358 Damian Collins: We had a session last week Jack Vettriano’s work or Beryl Cook, another popular where the director from the theatre hall in Bath spoke, artist I happen not to have any interest in? But these cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG04 Source: /MILES/PKU/INPUT/005777/005777_o004_kathy_HC 464-iv corrected.xml

Ev 80 Culture, Media and Sport Committee: Evidence

2 November 2010 Mr David Lee, Dr Tiffany Jenkins and Mr Norman Lebrecht are the ways in which you can increase the audiences think Andrew Carnegie donating the Carnegie Hall for contemporary art because all those people are has led to poor performances there. involved in contemporary art. If the Arts Council Dr Jenkins: My only concern with giving is when allocated maybe one of its four exhibit slots per year, there is a demand for a certain type of work. I have in all these country galleries, to showing work that no problem with names, plaques, bells, parties to people might be interested in going to see, then they thank and promote those individuals. might do a good job and that’s what they should be Mr Lee: Galleries have to whore in the market and if doing because public funding should recognise it means naming a gallery after somebody, in order to everything, not just what half a dozen people think is get money to do it up or put on a certain series of good. That’s the situation we have at the moment, exhibits, then they have to do it. There’s no answer where the Tate Gallery and the Arts Council dictate to that. virtually everything. Mr Lebrecht: The only question is: how much? Dr Jenkins: Yes. Q361 Damian Collins: Just one final question, which Mr Lebrecht: Fifteen years ago the Southbank was is a question you may have heard I asked in the going to rename itself the Paul Hamlyn Southbank. previous session but I’d be interested in your views When I saw the amount involved I laughed it out of too. What did you think of the criticism from some of existence. It was only a small sum and Paul Hamlyn the arts media about Lloyd Dorfman’s donation to the himself hadn’t even wanted it. They just thought they National Theatre, in response to him having the ought to. So if Lloyd Dorfman is giving the sum that Cottesloe Theatre named after him? Some people it is reported that he’s giving, yes, and nobody question whether it’s legitimate for that type of private remembers Cottesloe any more, yes, why not? giving to give you that sort of prominence in the arts Damian Collins: Thank you. world but, as I said in the previous session, I don’t Chair: I thank the three of you very much. cobber Pack: U PL: COE1 [SO] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

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Wednesday 1 December 2010

Members present Mr John Whittingdale (Chair)

David Cairns Alan Keen Dr Thérèse Coffey Mr Adrian Sanders Damian Collins Jim Sheridan Philip Davies Mr Tom Watson Paul Farrelly ______

Examination of Witness

Witness: Ed Vaizey MP, Minister for Culture, Communications and Creative Industries, gave evidence.

Chair: This is the fifth session of the Committee’s considering the levels of cuts that you were factoring inquiry into funding of the arts and heritage and I in for arts organisations, did you also consider the cuts would like to welcome, in his first appearance before that were going to be made to local government grants the Committee, the Minister for Culture, and therefore the cuts that local government were Communications and Creative Industries, Ed Vaizey. going to have to make in the arts as well? We have Ed Vaizey: Thank you very much, Chairman. heard a lot in this inquiry from representatives of local government about the importance to them of funding Q362 David Cairns: Good morning, Minister. It is a for the arts, culture and heritage and how big the cuts pleasure to have you this morning. are that they’re going to have to make. You have, Do you think that up until now, in recent years, quite rightly, spoken about your pride in protecting Government funding for the arts has been too much, what you think is the front line but local government too little or just about right? is also on the front line and they’re having to make Ed Vaizey: Well, I am a passionate supporter of the cuts as well. Was that a factor in your considerations? arts so some people might think that maybe I’m not Ed Vaizey: Yes, it was a factor in our considerations the right person to be Minister for Culture because if and, without wishing to repeat myself, that is why we I had my way I would write a blank cheque for the focused on the front line. Of the 800 or almost 900 arts. I think they’re very efficient, I think they deliver regularly funded organisations that are funded by the a great deal of value, but when we were looking at Arts Council, about two thirds are also co-funded with having to save money because of the need to reduce local authorities and that is why we wanted to the deficit, there were obvious things that we felt we preserve as far as possible the funding that comes to could stop doing without doing damage to the arts them from the Arts Council to encourage local as a whole, and that is what we attempted to do in authorities to continue and maintain that support. That our settlement. is why we wanted to protect Renaissance in the Regions, which is the Museums, Libraries and Q363 David Cairns: Are they making you very Archives programme to fund regional museums; again angry, the cuts that you’re having to make? we managed to restrict the cut there to just 15%. Also Ed Vaizey: They’re not making me angry. I think if the national museums obviously have presence in the you talk to any Minister in what is known as a regions and, although they’re not funded by local spending department they might perhaps not want to authorities, have a big impact. So that is why again it reduce spending but we obviously have to look at the was imperative for us to protect the front line. much bigger picture. I think that we found things we There may be other questions about the role of local could stop doing or areas we could cut back without authorities in terms of culture. We can’t dictate to damaging the front line. Our key priority was to local authorities what spending decisions they make preserve what we call the front line, which is perhaps within the envelope of spending they are given but I an inelegant word to describe the arts, culture and hope that the signal from us that we want to support heritage. But in terms of reducing the funding to arts organisations across the country in terms of their museums by just 15% and reducing the funding to funding will be taken on board. There will be certain regularly funded organisations by just 15%, coupled local authorities that support their culture and others with the substantial increase in lottery funding that is that perhaps don’t support it as strongly as others. going to kick in in 2011–12, I think we achieved a David Cairns: Thank you. I’m happy to pass you on very good settlement for what we call the front line. to my colleague who, I think, also shares your belief Therefore, in terms of some of the things we are going that funding for the arts should have a blank cheque. to have to stop doing, although they might be painful, I don’t think they will have a huge impact in terms of Q365 Philip Davies: Could you tell us what your delivering art to audiences. views are generally about the Arts Council? Ed Vaizey: I work very well with the Chairman of the Q364 David Cairns: I think during the course of this Arts Council, Liz Forgan, and the Chief Executive, session my colleagues have lots of questions going Alan Davey, in terms of the difficult decisions we’ve into detail on all this, but sticking with high level had to make in reducing funding within the budget of calculations at the moment, when you were the Department for Culture, Media and Sport. They cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Ev 82 Culture, Media and Sport Committee: Evidence

1 December 2010 Ed Vaizey MP have worked very closely with us about how that can that Mr Davey has written to the Select Committee to be achieved and I find them to be very effective try and address some of the points that he was unable partners in what we are trying to deliver. to address at the hearing.

Q366 Philip Davies: Do you think they spend money Q369 Philip Davies: Is this part of the new way of wisely at the Arts Council? showing that you are a keen member of the Coalition Ed Vaizey: Certainly under the leadership of Alan with the Lib Dems, to sit on the fence as much as Davey and Liz Forgan I think they have taken on possible? Is this a new strategy of the Government? board quite a lot of the criticisms that were levelled Ed Vaizey: To be perhaps more serious than I was in at the Arts Council about the way money was spent. I my last answer, as I said in my opening remarks I think they are now trying to get as much money as regard the Arts Council as an effective partner of the possible to the front line. I think they are trying to Department. We have an arm’s length principle. The reduce their administration and bureaucracy. Again, as Arts Council will continue to exist. It’s now taking on part of the settlement, we agreed with the Arts more responsibilities in terms of regional museums Council they should reduce their administration costs and libraries as well. I have to say in all candour that by a further 50%. They’re reducing their managed in my time as a Minister, working with Alan Davey funds budget, which to a certain extent funds and the Arts Council has been, from my perspective, programmes, and they’re going to concentrate most of an effective process. They’ve come to the table. their resources in funding regularly funded They’ve understood our priorities in terms of wanting organisations. In that sense I think we’ll make to reduce spending, our priorities in wanting to ensure significant progress. that as much money as possible that is routed through the Arts Council goes to arts organisations. Obviously Q367 Philip Davies: Did you see any of the Mr Watson wanted to emphasise what I myself coverage, any of the footage, of the Arts Council’s described as the greatest arts scandal of the decade, appearance before the Select Committee a few weeks which was the debacle over funding of The Public. ago when our colleague Tom Watson did what can Mr Davey was not there at the time. I don’t think Liz only be politely described as wiping the floor with the Forgan was the Chairman at the time. Perhaps with Chief Executive of the Arts Council? Did you see any hindsight Mr Davey might have offered a more robust of that and, if so, what were your views about the acknowledgment of Mr Watson’s criticisms of The horrific wastes of money that Tom Watson highlighted Public but he was addressing, to a certain extent, some to them? errors that weren’t technically his responsibility. Ed Vaizey: I have read the transcript of the exchange So, if you’re asking me do I think that I can continue between Mr Watson and Mr Davey. It has obviously to have a good relationship with the Arts Council; yes, become a legendary exchange of views. I don’t think I do. Do I think it is very important for the Minister Parliament yet allows its proceedings on YouTube but for Culture to have a good relationship with the Arts I imagine if they did appear on YouTube it would be Council? Yes, I do. Do I think the Arts Council needs a YouTube sensation, I think is the technical term. to change? Yes, I do, in a number of different ways, I think that to a certain extent if Alan Davey was here, but I’m not going to use this as a pulpit to bash the and he’s not, to have a second round with Mr Watson, Arts Council. he would probably re-emphasise the point that I think he was trying to get across that a lot of the criticisms Q370 Philip Davies: Does it not seem a bit bizarre of the Arts Council pertained to activities that were and a strange choice to give a wider remit to an three or four years ago and I think that the Arts organisation that has clearly wasted so much of its Council has taken on board some of those criticisms existing budget? You would think that you would and is bending over backwards to change and become want them to get their own house in order first before more efficient. you wanted to give them a wider remit. Ed Vaizey: I think they are getting their own house in Q368 Philip Davies: But just in general terms, order. I think Alan Davey has done a lot in the last having read the transcript, were your sympathies more two or three years to try to reduce costs, to try to with Tom Watson or Alan Davey in terms of the case rationalise the structure of the Arts Council. As I say, that each of them was making? Certainly from my we have given them a tough settlement and the reason perspective, and I think of most independent we have given them a tough settlement is because we observers, it would be very difficult not to have more have priorities and our priorities are that lottery sympathy with what Tom Watson was saying. I was payers’ money and taxpayers’ money goes to the arts just interested in where you stood; whether you were organisations that should be supported and that less of as outraged as we were—or I was certainly—at the that money is spent on what one might describe as the colossal waste of money that was being brought back office. That is why we’ve told them they have to before us. reduce their administration by a further 50%. But in Ed Vaizey: Without wishing to undermine either terms of my ability to work with Alan Davey and to gentleman—I admire both Mr Watson and Mr communicate the Government’s priorities, I find that Davey—I don’t want to stray into dangerous territory. an effective relationship. I would almost regard both of them as friends, so asking me to choose between the two is a difficult Q371 Philip Davies: So, given that the Government question for me to answer, but clearly Mr Watson fired has its priorities, does that mean that you have given some very powerful bullets at Mr Davey and I gather some direction to the Arts Council about the things cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Culture, Media and Sport Committee: Evidence Ev 83

1 December 2010 Ed Vaizey MP that they should be funding and perhaps the things and transparent debate since the Department for that they shouldn’t be funding? Culture, Media and Sport was created, originally as Ed Vaizey: Yes. We reached a clear agreement with the Department for National Heritage, about the them that they were only going to reduce the budget relationship between what is now a Department of for arts organisations, the RFOs, by 15% and we State and the Arts Council. reached an agreement with them that they were going to reduce their administration budget by 50%. So, yes. Q373 Philip Davies: So, for example, are you encouraging the Arts Council to fund projects that Q372 Philip Davies: But that is a generality. I’m promote the Big Society or not? Is that a policy thing talking about specific funding priorities. Have you or is that an arm’s length thing? said to the Arts Council, “These are specific things Ed Vaizey: I’m not aware that I’m asking them to fund that we expect you to continue funding and these are projects that promote the Big Society. I obviously specific things that we expect you to stop funding”? would take the view that many arts organisations do Or have you said, “This is your budget. You decide promote the Big Society in terms of the number of within that budget which things you want to fund”? volunteers that work in arts organisations, the Ed Vaizey: As I said, we have told them, and reached education work they do and numerous other things an agreement with them, that they can reduce their that they do that are outside, as it were, the core of budget for arts organisations by only 15%. At this what an arts organisation does, which is to put on point you get into this debate about what is the arm’s performances for audiences. length principle. As far as I’m concerned within that budget, which is approximately £320 million—I can Q374 Chair: You say that the arm’s length principle give you the exact figures over the four-year spending is very important. The Arts Council has said that period in a letter—in practice, the Arts Council is free perhaps up to 100 of their regularly funded to award those grants to organisations that it wants to organisations will cease to receive funding once they fund. The important principle there is that it will fund have carried out their new assessment. If the Arts some organisations that people round this Select Council decided that, for instance, the English Committee table will think are a good thing and some National Opera should no longer receive any money organisations that people round this table will think or that one of the major London orchestras should no are a bad thing. There may be a range of views, for longer receive money, you will accept that is a example, starting at the top, about the level of grant decision entirely for the Arts Council and there will given to the Royal Opera House. But the key point is be no attempt on the part of the Government to alter that the arm’s length principle means that Ministers that decision? shouldn’t decide that level of grant or indeed whether Ed Vaizey: I don’t want to get into hypotheticals, Mr the grant goes there—to specific orchestras, theatres Chairman, but I think that the principle is that the and other arts organisations—because it has been an Arts Council should be free to take those decisions. important principle since the Arts Council was Obviously decisions to stop funding particular arts established that Ministers and politicians do not organisations will be subject to a certain degree of involve themselves in artistic decisions. scrutiny and consultation from members of the public One of the criticisms that was levelled at myself and and the arts world in general. When the Arts Council Jeremy Hunt in the run-up to the general election by last made a decision to stop funding a number of arts the previous Secretary of State was if the Tories come organisations and to fund new arts organisations there in they won’t fund a play like Enron, which started at was an enormous row and there was a huge debate the Royal Court and is seen by people as a criticism and some arts organisations managed to secure of capitalism and therefore something that perhaps funding that was meant to be taken away from them. politicians who support the capitalist system wouldn’t At the time the then Secretary of State James Purnell support. I think therefore it’s an important principle resolutely refused to get involved in that debate that there is no suggestion of political interference in because he wanted to emphasise that the arm’s length terms of how arts organisations are funded. That is the principle existed and that those decisions were for the core of the arm’s length principle. Arts Council. I do think there has to be a proper debate, and I think we should have it next year, about the relationship Q375 Chair: But ultimately you are the Minister for between the Department and the Arts Council, Culture; you are accountable; you are the elected because there are grey areas about what is an arm’s representative. Is it not right that major decisions of length principle and what is policy. Another example that kind should come ultimately to you and not be from the last Government is the free theatre ticket made by an unelected and unaccountable body? initiative. That started in the Department. It was Ed Vaizey: The Arts Council is accountable through something that the then Secretary of State, Andy me and it is also accountable to Parliament. Burnham, was very keen on; it was managed by the Chair: It is not accountable through you if you’re Arts Council but it was clearly a political initiative. going to say you’re not going to interfere in anything So, for me there is a distinction between the arm’s they do. length principle, which is about funding arts Ed Vaizey: In a sense that is accountability because organisations, and policy, which is to a certain extent you are free to scrutinise and criticise if a Minister to do with programmes or policies that support the says the arm’s length principle is sacrosanct and I’m arts. I think that has to be explored in public and in a not going to interfere in these decisions, and it would transparent way, because there has never been a public be a matter for debate that the Minister was not cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Ev 84 Culture, Media and Sport Committee: Evidence

1 December 2010 Ed Vaizey MP perhaps deciding to step in to save one particular arts Ed Vaizey: What you have is a very effective organisation that might have received a cut or a stop Secretary of State who is highly regarded and in funding from the Arts Council. therefore able to speak for culture and heritage around the Cabinet table. You have a Secretary of State who Q376 Paul Farrelly: Just following that line, clearly went right to the wire with the Treasury and didn’t the Arts Council has come in for some criticism over agree his settlement until the day before the spending particular projects but I would hate that to mean that review announcement. He fought very hard for arts all the Arts Council’s activities are tainted across the and heritage; secured, as I say, cuts to the front line of board. If there is a direction to preserve funding for just 15% and also secured very early on a significant the big London institutions, there are concerns with increase in lottery funding. So, if you take the overall this review that very good institutions in the regions, budget with the Arts Council, it will reduce by just such as the Victoria Theatre in my constituency that 11% in the four years because of the increase in serves North Staffordshire and beyond and has had lottery funding. Similarly the heritage budget will its funding cut already, will be more under threat as reduce by just 2% because of the increase in lottery a result. funding. So what you have in the Secretary of State, Ed Vaizey: All the regularly funded organisations Jeremy Hunt, who is not here, partly because I don’t received the same level of cut for this financial year think he was asked to be here but also because he is and for next financial year. The Arts Council is putting flying the flag in Geneva to bring the World Cup back to England, is somebody who fights very hard for his in place a new programme. It is going to have core sector. organisations that it funds and then other institutions Chair: Well, we hope Jeremy will bring some good that it funds on a programme basis. The other thing news. that it has made clear is that in terms of the big David Cairns: I hope he’s not in Geneva because I national institutions that are its clients, it expects them think it’s Zürich. to do more in terms of supporting the regions and also Ed Vaizey: I’ll just check my Twitter feed. I’m sure it supporting organisations that are similar to them. For said Geneva in his tweet but if he’s in the wrong city example, to take the National Theatre, I think it has it doesn’t take away from the fact that he is still already been made clear, and the National Theatre is enormously keen. Also, Boris said he’s just getting on very happy to do this, that the Arts Council sees the a plane. God knows where he’s going. National Theatre playing more of a role in supporting Paul Farrelly: You’ve just done a great impression of theatre throughout the country. As I say, I think there Boris there. will always be a debate, there will always be a row, Ed Vaizey: A lot of people do compare me to Boris when the Arts Council decides to stop funding an Johnson. I’m not sure what that says. organisation that it has funded historically in the past. There is no suggestion that that will happen to the Q378 Paul Farrelly: The reality is that you work Victoria Theatre. I think the question we have to ask under the direction of the Secretary of State. ourselves, drawing back from the specifics towards Ed Vaizey: I work with the Secretary of State, yes. the general principle, is whether arts funding should Paul Farrelly: Despite the right-to-the-wire be preserved in aspic; whether, once you start being negotiations, the Department under the Secretary of funded by the Arts Council, you should therefore be State has been willing to countenance bigger cuts than funded by the Arts Council for ever and a day. I other Departments. Isn’t it the case that had the personally don’t support that approach. I think it’s Coalition a version, say, of Chris Smith that you important that the Arts Council refreshes its client wouldn’t have been so eager to run up the steps of the base, if you like, and does stop funding some Aztec pyramid and start flinging the heads of organisations and funds others. I do think the Arts sacrificial victims down to the crowd with such relish? Council has to be robust in terms of the decisions it Ed Vaizey: I don’t know who would have been the makes in terms of which is a good organisation or Labour Government’s Secretary of State had they won are they simply subsidising failing organisations and the election. It might well have been Ben Bradshaw. perhaps protecting them inappropriately. What could we discern about how Labour was going to approach arts funding after the election? There was Q377 Paul Farrelly: Yes. The New Victoria Theatre no commitment to increase lottery funding, which was in Newcastle-under-Lyme, along with other the Secretary of State’s first announcement, and institutions across the country, is certainly feeling the something that has now gone through Parliament. pain now. But looking at the overall picture and not There was a commitment to reduce spending across just the Arts Council in terms of the funding of arts the board by something like 20%. So, perhaps one and heritage, isn’t it the case that there is no science would have seen 20% cuts from Ben Bradshaw as about this? It’s serendipity really, because the Culture, opposed to the 11% cut to the Arts Council that Media and Sport Department happens to have a Jeremy Hunt secured and 20% cuts to heritage as young, very ambitious Secretary of State who offered opposed to the 2% cut that Jeremy Hunt secured. up not just 25% cuts, not 33%, but as the eagerest of all beavers has gone for 50% and the arts and heritage Q379 Paul Farrelly: Finally on the overall picture: are having to cope with that as a result? as well as there being no science rather than Ed Vaizey: I wasn’t aware that we had imposed 50% serendipity about this, isn’t it the case that there is no cuts. I’m not sure where that figure comes from. management, really? The approach has been to chop Paul Farrelly: From your own Department. first and ask questions later and see how the pieces cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Culture, Media and Sport Committee: Evidence Ev 85

1 December 2010 Ed Vaizey MP pick themselves up, from the UK Film Council to the because I think it is incredibly important. So, thank Commission for Architecture and the Built you for giving me the opportunity to say in public that Environment to the way that the Arts Council has I hope in the new year we will be able to set up a been allowed to chop the budget of Arts and Business, system where we give you an answer in Hansard when which, as we have heard, is an enabler of anything you ask questions about the Arts Council, or indeed that you might call the Big Society because of the any other arm’s length executive agency, quango, amount of money it brings in for every pound spent. however you want to describe it. I do think it is wrong Ed Vaizey: No, I think we took a very strategic view. that honourable Members of this House are not able As I repeat for the umpteenth time, we wanted to to see those answers in Hansard. protect arts organisations and museums, which is why Mr Watson: That’s very kind. Thank you. we limited the cuts to 15%. We had to find other savings. I think the abolition of the UK Film Council Q381 Chair: I seem to remember a great principle and the transfer of its responsibilities to the British that officials advise and Ministers decide. What Film Institute, which again mirrors to a certain extent happened to it? what the last Government wanted to do, which was to Ed Vaizey: Thanks to Mr Watson, I’ve made a merge the two bodies because presumably it decision in public. I now cannot go back on it. That’s recognised the substantial amount of overhead that the trick, isn’t it? Once you say it in public, you can’t was being eaten up by the UK Film Council, will be go back on it, can you? a good thing for British film in general. I think there Chair: Excellent. We’re happy to help. is potentially a Big Society solution for the Commission for Architecture and the Built Q382 Mr Sanders: What, at the end of the day, is Environment to ensure that the good work that it has the purpose of taxpayer funding for the arts? done in the past continues in the future. But I don’t Ed Vaizey: I think the purpose of taxpayer funding for think that there was a lack of strategy. There was a the arts is investment and venture capital for the arts. clear strategy to ensure that as much money as I think that it is an important point to make that in possible went to those who are delivering arts, culture, terms of arts organisations that are funded by the Arts heritage and film as opposed to people in back offices Council or museums that are funded directly by the who were administrators. Department, that that is not their entire level of income; that broadly speaking most arts organisations Q380 Mr Watson: Good morning, Minister. that are funded by the Arts Council get about a third Ed Vaizey: Good morning, Mr Watson. of their income and they make rest of their income Mr Watson: I have a small supplementary on the from commercial income and from philanthropy. I arm’s length principle with the Arts Council and think if you talk to most philanthropists they would scrutiny. I’m going to be talking to you later about say that they are keener to support arts organisations museums and libraries. where the Government is also a partner, where the Your predecessor, the Labour Minister, the MP for Arts Council or the Government funding museums Barking, dogmatically adhered to the principle that, directly is a partner, because it’s a mark of approval, because the Arts Council was an executive agency, if you like, and if we were to withdraw that funding, when honourable Members asked parliamentary funnily enough it might become harder for some arts questions the reply to those questions was not organisations to raise money from philanthropy. published in Hansard. Given that the Arts Council is I also think that between the subsidised arts and what central to the future of arts funding in the UK and one might call the commercial arts, there is a very there is a big discussion about it, it is very hard for strong relationship. To a certain extent arts subsidy is parliamentarians and experts in the field publicly to known to risk capital. I referred earlier to Enron, for scrutinise the Arts Council when the answers to example. I think that the subsidised theatre is a great parliamentary questions are sent privately to an feeder for the West End theatre. A lot of plays that are honourable Member and not published. You have it in put on that are perhaps riskier in terms of their your power to change that. Will you do so? content, when they become hits they provide great Ed Vaizey: First, if I could just update the Committee support for West End theatre. I think that many people that Jeremy Hunt is indeed in Zürich. It shows why who work in the subsidised arts also go on to work in I’m not responsible for sport. the commercial arts and go back and forth, so there is I completely agree with you, Mr Watson, and in fact a great opportunity for people to learn their craft and if I can exclusively reveal—you have been a Minister train within organisations that are subsidised by and you will treasure, and no doubt we will treasure, Government. when you publish your memoirs some of your best Yes Minister moments—one of my best Yes Minister Q383 Mr Sanders: You haven’t really answered the moments was when I refused to answer one of your question of the actual purpose. Do you not expect an PQs. You had asked me a question about the Arts outcome from the money that you are investing on Council and the answer came back that I would place behalf of the taxpayer in the way that, say, other a copy of the answer in the library and I refused Government Departments require at least some resolutely to answer this. I kept saying to my officials, projection of jobs retained, jobs created, trade “No. This is wrong. We need to put the answer in increased, foreign currency, tourists; name any Hansard so that everyone can see it”. After two weeks number of different indices? Do you not have a of holding out and not making any progress, I caved purpose for that taxpayer investment? Do you not in and gave you an answer but I continue to press judge it against something? cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Ev 86 Culture, Media and Sport Committee: Evidence

1 December 2010 Ed Vaizey MP

Ed Vaizey: I think the key purpose of taxpayer because presumably the only Government Department investment is to keep a core arts infrastructure in that could judge happiness is Culture, Media and place, which I think would be very strongly threatened Sport? if the Government wasn’t investing in that. In terms Ed Vaizey: I don’t know very much about this of economic return, I think that the subsidised arts happiness index but I would assume that the arts more than pay for themselves. There is a statistic that would play a key role in the happiness index. I think knocks around that in terms of the subsidy that goes I am the Minister for Happiness because I’m into theatre we more than get back in terms of the responsible for culture, film, video games, the kind of VAT on theatre tickets that people who go to the things that make Mr Watson happy. I’m responsible theatre pay. But then you can extrapolate from the for your mobile phone working, the internet, of investment that we make in the arts an enormous course, which makes us all happy. So I should amount of economic return, not just from jobs, not probably be given responsibility for the happiness just from the way it feeds into the commercial arts, index but surprisingly Downing Street has not offered both in terms of not just plays, say, going from the that to me. theatre to the West End but also being turned into film, Paul Farrelly: That’s the Minister for the Fun. but also an enormous amount of tourism, particularly Ed Vaizey: Well, it is now the Minister for Happiness. of course in terms of our museums. It’s got a better ring to it, don’t you think? And then I suppose I could fall back on something that wouldn’t necessarily withstand close scrutiny by Q386 Damian Collins: How happy were you when this Committee but I think it is also the right thing to you heard that the Arts Council was going to cut the do. I think that our national museums hold within funding for Arts & Business? them collections that are in trust for the nation and Ed Vaizey: I wouldn’t say that I had an emotional therefore I think it’s important that the Government is reaction to that decision. committed to supporting them with taxpayers’ money. I also think it is the right thing to do in the 20th and Q387 Damian Collins: What sort of message do you 21st century, in the absence of absolute monarchs, that think it sends out, given all the work that you and the Government acts as a patron for the arts and supports Secretary of State have done to promote the role of core arts infrastructure in terms of orchestras, theatres philanthropy and the role of corporate organisations and arts organisations. in supporting the arts? Ed Vaizey: I think the message it sends out is the Arts Q384 Mr Sanders: You have suggested that a lot of Council is going to fund arts organisations that are the investment pays for itself. If that is so, surely the delivering the arts to people and that they’ve taken a argument is that you would invest more. There has to look at the formidable leadership of Colin Tweedy and be some calculation somewhere that says beyond this taken a view that if anyone is going to turn that point, we get into diminishing returns; below this organisation around without public subsidy it will be point we undermine the whole argument. Do you not Colin Tweedy. have something that guides you as to where the level of taxpayer funding of the arts maximises its impact? Q388 Damian Collins: Would you expect that the Ed Vaizey: No. I think that we do very well in this Arts Council will take more seriously the need to use country in terms of the amount of money we spend the public money they have at their disposal to work on the arts. I think we get an enormous return. I think with the private sector and encourage more most of our arts organisations are extraordinarily philanthropic giving and corporate giving to support efficient. We rely on a hidden subsidy in the sense that the arts? people who work in the arts tend to be not hugely Ed Vaizey: Yes, I do. We will be announcing our plans well paid. There is also an enormous amount of for philanthropy, I think next week, and the Arts volunteering. I think we should, in terms of what we Council will be central to those plans. I think it’s very, invest in the arts, be immensely proud of what arts very important, taking the answer slightly wider organisations are able to achieve on the back of it, perhaps than your question, that the Arts Council is both in terms of working hard, in terms of securing seen as a resource not just for the subsidised arts but philanthropic funding as well as commercial funding. for all the commercial arts and also that the Arts Take something like the National Theatre. It used to Council is seen as embracing the private sector and get 60% of its money from the Government, now it what the private sector contributes to the arts. gets 30% of its money. I think they have played a blinder. So, almost any budget you look at in any Q389 Damian Collins: It would certainly be your sector is potentially limitless and you have to work expectation that initiatives like the Big Arts Give within the resources you have. In terms of what we would continue despite this cut in funding for Arts have in terms of resources, I think we get a fantastic and Business? return. Ed Vaizey: Yes, I do expect that to continue.

Q385 Mr Sanders: Compared with other Q390 Damian Collins: We’ve talked quite a long Departments of State it’s quite a wishy-washy way of time on the Arts Council; I wanted to move on to looking at it without having some key determinants as film, if I may. You announced earlier in the week the what the value of that investment is going to be. For decision to give the role to BFI and Film London for example, what about this happiness index that we’re promoting British film around the world, in the case about to have? Will you judge investment against that, of Film London, and for the BFI in taking on the cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Culture, Media and Sport Committee: Evidence Ev 87

1 December 2010 Ed Vaizey MP responsibility for allocating funds. I would like to ask Was it considered whether that could all come under two questions about that. Firstly, if you could say just the single umbrella of the BFI? Why was the decision a little bit about your decision to work with those two made to split that role? organisations, Film London and the BFI. Also you Ed Vaizey: That was considered but I think we felt mentioned earlier that the previous Government was that because 75% of inward investment of film does already considering bringing together the UK Film come to London and the southeast, Film London is Council and the BFI and I wondered how developed very experienced in that sense and therefore it was an those plans were when you came into office. easy reach for them to take on a UK-wide remit for Ed Vaizey: I think the last Government—and this is inward investment. Plus a lot of the other inward not a criticism of the last Government—had struggled investment that comes from outside London is to bring this merger together, potentially because of facilitated by the regional screen agencies, which some of the personalities involved. It might reassure again I think have a strong relationship with Film members of this Select Committee who, as Members London, which is technically a screen agency as well. of Parliament, are used to being criticised for tribal So that felt a natural fit. politics and artificial rows, that the film industry makes Westminster look like a village tea party in Q394 Damian Collins: There is one tiny thing that I terms of some of the rivalries that go on in it. So I want to mention on the end of that. It’s just about think it’s a great opportunity to unite the film industry saving of overheads from bringing these bodies in a common cause to support British film. I think that together. When the Secretary of State gave evidence the decision to abolish the UK Film Council and to he estimated that about 24% of the UK Film Council’s make that announcement opened the door to this— budget was spent on administration; Tim Bevan said effectively a merger—and I think that we did explore he thought it was nearer 10%. What’s your view on other options. I think it’s no secret that we wanted to the saving in terms of administrative costs by bringing consider whether the broadcasters could be these bodies together? responsible for lottery funding; it’s no secret that we Ed Vaizey: I think we’ll save several million pounds looked also at other organisations like the Arts a year. The Film Council, you have to remember, had Council. We did consult widely with almost everyone a budget of about £26 million from the lottery and who has ever made a film in this country. The clear about £26 million grant-in-aid, but quite a lot of the consensus that emerged was that people wanted those core functions of the UK Film Council to go to the grant-in-aid went straight out of the door, quite a lot British Film Institute, for there to be one body for went to the BFI, some of the lottery money when British film with a remit across culture, heritage and straight to Skillset, and it still managed to employ 78 production, and that also this is a great opportunity to people on £100,000 a year plus. So I think if you reshape the British Film Institute and make it an even simply added up the salaries you’d get to quite a more dynamic organisation than it already is. So I’m high figure. fairly optimistic about the future. Obviously the execution of this will be absolutely crucial but I’m Q395 Jim Sheridan: Just to follow up from David’s convinced it’s the right decision. question, can you clarify whether it was it 10% or 24%? Q391 Damian Collins: Did you inherit a dialogue Ed Vaizey: Well, it depends what you’re taking in but from the previous Government with the UK Film if you take into account lottery administration we Council and the BFI about taking these sorts of steps would say it’s about 24%. or was it something you had to initiate from day one? Ed Vaizey: There had been a dialogue and that Q396 Jim Sheridan: So you disagree with Tim dialogue was still continuing when we came into Bevan, then? office, yes. Ed Vaizey: There are lies, damned lies and statistics. I think you can cut it anyway you want but we Q392 Damian Collins: The reason I ask is when Tim maintain it’s around 24%. Bevan gave evidence to the Committee, he painted a picture of a midnight call from you to tell him that Q397 Jim Sheridan: Can I take you back to this the UK Film Council was going to be abolished and famous midnight broadside, as Tim Bevan has this was a complete bolt from the blue. But from what referred to the way he was approached. Given the fact you suggest that would not necessarily be a true that midnight on a Friday night there’s every reflection on the level of dialogue that had taken place possibility that people may not be operating with a up to the point of that decision being made. clear mind, can you maybe talk us through just exactly Ed Vaizey: I think it’s fair for Tim Bevan to say that how this broadside happened? he wasn’t expecting us to announce that we were Ed Vaizey: I didn’t call him at midnight, but he was abolishing the UK Film Council. I think that there had in Los Angeles so I don’t know what time it was. I been a level of dialogue; it was obviously a very live think he was certainly awake. The Secretary of State issue, the relationship between the two bodies. But I wanted to announce it to Parliament on the Monday think for Tim it did come as a bolt from the blue that and, as you know, this Government takes very we were going to abolish the UK Film Council. seriously the need to tell Parliament first of its decisions. So, we wanted to ensure that nothing Q393 Damian Collins: Film London has a separate leaked, as it were, so that you and our colleagues were role in taking over some of the international functions. the first to know about this decision and that’s why cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Ev 88 Culture, Media and Sport Committee: Evidence

1 December 2010 Ed Vaizey MP we called Tim Bevan on the Friday, but he was in Los it into its own structures. Also, it may not have the Angeles at the time. right level of funding to achieve that transition. What sort of measures are you putting in place to ensure Q398 Jim Sheridan: Again, he’s very critical of the that it is a successful merger? lack of consultation, or indeed evaluation, in the Ed Vaizey: First, in terms of the abolition of the whole process. Do you have any regrets about you Museums, Libraries and Archives Council, I just want handled this situation? to very quickly say—and I know you’re not Speaker Ed Vaizey: Well, we’re not applying for a PR Week Bercow so I’m sure you won’t tell me to hurry up and award in terms of how the decision was made. get to the point—that I think Andrew Motion and Roy Jim Sheridan: You probably wouldn’t get it. Clare have been fantastic leaders of the MLA. On a Ed Vaizey: On a personal level, yes, I do regret it personal level, Roy Clare has been a joy to deal with, because I have an enormous amount of admiration for not because he’s a patsy but because he understands Tim Bevan. He took on this job, he’s unpaid chairman, Ministers’ priorities and he gets on with the job. He he gave an enormous amount of time to it. As one did not compare the abolition of the MLA, for discovers when one gets into Government you’ve got example, with the abolition of the NHS, a comparison to make tough decisions and sometimes you would somebody once tried to make on the abolition of the like to have communicated them in a better way. So, UK Film Council. on a personal level, of course I regret it because I’m It’s obviously difficult trying to bring two a great fan of Tim Bevan and I know that he was not organisations together. I’m very confident that the happy with the way the decision was communicated Arts Council will have the relevant expertise. I think to him. that there’s a close relationship between regional museums and what they do and regional arts Q399 Mr Watson: If you don’t mind my saying so, organisations. I’m confident that there’ll be enough I think you’re doing a good job in front of this funding to achieve that transition. The Arts Council, Committee. You’ve made a new announcement, as you know more than anyone, Mr Watson, is a large you’ve admitted some regrets. Before I get on to the organisation that should have people of the right script, could I ask whether you’d like to share some ability to handle that transition. So I’m very confident of your achievements in the first six months of the about that. Again, as I did when I was answering Mr role so we can balance it out? Davies’ questions earlier about the Arts Council, I Ed Vaizey: Thank you very much, Mr Watson. I’m would like to pay tribute to Alan Davey, because not sure what my new announcement was. Oh yes, you’re quite right, in terms of a tough settlement and I’m going to answer all of your questions properly what the Arts Council is having to grapple with, it’s from January, so I may not answer them properly in going through an interesting period. The fact that Alan the next half hour. Davey has been able to work with us in terms of What are our achievements? I think that our absorbing the responsibilities of the Museums, settlement was a good achievement. I think we’ve Libraries and Archives Council, I think is a good thing kept the reduction in funding relatively low and I and an impressive achievement. think that will be manageable. I have gone on record, perhaps recklessly, saying I don’t think that the Q401 Mr Watson: I know that you’re a very hands- experience of audiences will be affected significantly on Minister; we saw your recent visits to the British over the next four years. I’m confident that arts Museum. organisations and museums will continue to deliver a Ed Vaizey: I was wondering how you were going to brilliant service. We’ve seen in the newspapers today get that in, Mr Watson. I should have brought it along Tate announcing a revamp of Tate Britain. I think the this morning. merger of the Film Council with the BFI is an Mr Watson: That would have made my day. I achievement and a renewed policy for British film. I promise you it would have been on YouTube. The think that the merger of the Museums, Libraries and British Museum is facing 15% funding cuts. How are Archives Council with the Arts Council is also an you, as a Minister, ensuring that those cuts are being achievement. I think that, although I obviously can’t applied in the right direction and that their research give details, our announcement next week on budget is not going to be affected, for example? philanthropy will raise the profile of philanthropy and Ed Vaizey: My impression was that the national put forward a number of imaginative initiatives to museums were—happy is obviously not a word one promote philanthropy in this country. So I think those can use, but they felt that that cut was manageable. It are some significant achievements, as well as was certainly the kind of ballpark figure they were obviously the increase in lottery funding, which goes happy to discuss with us in the run-up to the spending back to the fact that I think we have kept the reduction settlement about what they could absorb. Again, going in funding for the arts to the bare minimum. back to my general paean of praise for arts organisations, I think you’re not going to find anyone Q400 Mr Watson: Good. Can I just take you to a really in the world that’s a better museum leader than couple of detailed questions on the Museums, people like Neil McGregor or Nick Serota. So, I’m Libraries and Archives Council. To be frank, I think very confident in the leadership of the British Museum that some people have grave reservations about and their ability to manage within that budget. whether the Arts Council, being in a state of flux with its own funding, is capable of having the right kind of Q402 Mr Watson: The Department itself has expertise to manage that kind of institution, to absorb recently announced cuts to the directly funded cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Culture, Media and Sport Committee: Evidence Ev 89

1 December 2010 Ed Vaizey MP museums, including the National Mining Museum and Organisation) rules, but one of the parliamentary the People’s History Museum in Manchester. Before I questions that I asked when I was in opposition ask you a couple of specifics on that, can I ask how elicited a response from the then Trade and Industry you came to the decision to make cuts to those Minister that there was no mileage in that allegation particular directly funded organisations? Was there a and certainly the Government didn’t pursue it then. particular formula you applied when making that I think your question is well made. Basically, we are decision? going to have to take account of what Canada is doing Ed Vaizey: Well, they got the same cut as the national and I want to see, as far as possible, active support museums. The DCMS-sponsored museums all had a for the games industry. Obviously the elephant in the 15% cut. room is the tax break and we didn’t secure a tax break for the video games industry, but I think there are Q403 Mr Watson: Yes, they’re one of them. I don’t other ways that we can support it. For example, we know whether you’re aware but the Labour archive, still have a Regional Growth Fund and we have, as it the archive of the Labour movement, including the were, direct support from the Department of Business entire archives of the British Labour Party for the last Innovation and Skills for industry. What I feel very century, are housed in the People’s History Museum strongly about is that traditionally if you say, “Let’s and therefore this is really just to alert you it’s support industry in this country” it means give a grant probably the dearest curated collection to most to a car factory, give a grant to an aerospace company Members of Parliament in the House of Commons. or something. If the Government is going to continue Could I ask you to take a specific look? I don’t know that policy of support, I think creative industry should whether there is an equivalent Conservative Party have a seat at that table and one of those seats should archive but I’m sure— certainly be filled by the video games industry. Chair: The Bodleian archive. Mr Watson: There you go, that’s probably got Q406 Mr Watson: Is it your view the tax credit is significantly better funding than the People’s History completely off the agenda now or is it just parked Museum. until we see better economic times? Ed Vaizey: I think if you were in the debate yesterday Ed Vaizey: I would never say never, but I would say to on tuition fees you might not think differently. the video games industry, through you, Mr Watson—I Mr Watson: Even the Chairman and Mr Davies am not sure if you are the Chairman of the all-party would be keen to preserve the Conservative Party group— archive at the Bodleian. Can I ask you to take a non- Mr Watson: Joint Chairman. partisan but particular interest in the future of the Ed Vaizey: Joint Chairman with the Chairman. I ask Labour archive? you to encourage TIGA in particular to look at other Ed Vaizey: I will be happy to do so. Absolutely. creative options that they can work with us to get support for the video games industry, because if all Q404 Mr Watson: That’s very good. Now, the their energy is pushed into campaigning for a tax Chairman has allowed me to just go off script slightly. break that could mean effectively a hiatus of three or I think that video games are the dominant art form four years before it realistically comes back on the of this century and how we support the industry is table. important. The trade body TIGA (the developer association representing UK videogames development Q407 Mr Watson: Just a final question. There is a in the UK) has recently shown that the headcount in new Member of Parliament, a Claire Perry MP, who, the UK games sector has fallen 9% when the I see in Hansard has a great interest in internet headcount in the Canadian sector has increased by pornography. 33% in a comparable period. Can you hazard a guess Chair: I’m not sure if I would phrase it quite that way. as to the reasons for that sort of discrepancy in Mr Watson: Sorry, in the control of internet figures? pornography. You agreed to a private meeting to Ed Vaizey: Yes, I can. For the last 15 years the discuss that with her. Has that meeting yielded any regional government in Canada has decided that it changes to Government policy and your commitment wants to invest in the games industry and it has to the open internet? chucked an enormous amount of money at the games Ed Vaizey: I haven’t had the meeting yet. You very industry. Hundreds and hundreds of millions of kindly, Mr Watson, described me as an active Minister Canadian dollars have gone in to support the games and what I’ve found since being a Minister is that industry and, broadly speaking, if you want to set up getting people around a table to discuss an issue is a studio in Canada you will basically get half your a better way to make progress than simply issuing costs paid by regional government. consultation documents or whatever. So, for example, on the issue of ISPs (Internet Service Providers) and Q405 Mr Watson: Are you satisfied that competition rights holders and piracy, I think we had a very rules haven’t been crossed by the Canadians? Is it the constructive meeting with stakeholders on that. What sort of thing on which you think in the long term the I would like to do is for Claire Perry to bring to the UK Government should be working in partnership table organisations that care about this issue, with industry? charitable organisations I suspect, along with the ISPs Ed Vaizey: I think the last Government had a view or to see whether we can make progress on self- communicated a view that the Canadian Government regulation. As you know, I have a very strong might be in breach of WTO (World Trade commitment to an open internet. You only have to see cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Ev 90 Culture, Media and Sport Committee: Evidence

1 December 2010 Ed Vaizey MP what happened with Level 3 and Comcast yesterday those volunteers have gone, they’ve gone and they or the day before in America in terms of the furore may never come back again. Has that been part of that has been created there. I think we’ve had a the strategy? successful internet by having a lightly regulated Ed Vaizey: Absolutely, and I think that a lot of internet, and the best way forward on what are festivals are technically, as it were, treated as arts controversial and important issues like access to organisations by the Arts Council. It supports a internet pornography and the concerns of parents significant amount from the Manchester International across the country is to get a self-regulated solution, Festival upwards or downwards and I’m certain that because the heavy hand of Government, either at UK the Arts Council will continue to support key arts level or commission level, can have very unintended festivals across the country. consequences. Alan Keen: I was encouraged when you used the Chair: I think we need to return to the main topic. words “core infrastructure”. It’s important to preserve those. Thank you. Q408 Alan Keen: Can I move on briefly to heritage. Before the national lottery the quality and the health Q411 Paul Farrelly: It’s just on conservation, which of our heritage was declining but the national lottery includes sympathetic developments to make the best has made a vast difference, but now we’re finding in of our heritage. It’s not only local authorities, or a recent survey the number of conservation officers indeed English Heritage, that are responsible. We’ve has reduced by 14% and Loyd Grossman thinks it is heard evidence that the regional development agencies even more than that. 14% overall probably means have played a big part in many projects but they are some local authorities have no specialist conservation being abolished, so that is 100% cut from their officer left. I wonder if you’ve had conversations with contribution. Has any consideration been given to the Secretary of State for Local Government to whether these new LEPs, the local enterprise discuss the problem that is going to bring over the partnerships, as they take off will be encouraged to next years? submit applications that will be viewed Ed Vaizey: No, I haven’t but I think we probably sympathetically for heritage projects, which of course should. I think that it’s important that local authorities contribute to regeneration and tourism as well? see whether they can work together to fund posts like Ed Vaizey: Yes. First of all, obviously local economic conservation officers. I think that it’s probably partnerships, in my view, and I am obviously partisan unrealistic to expect every council, both district and on this, will be a huge, important and productive county, to have their own conservation officers but I change in terms of regional government because they certainly think it’s possible for councils to work will be coterminous with real areas that people can together to provide a service to help with identify with as opposed to artificial administration conservation. areas. I think that certain LEPs will make aspects of culture, as it were, their priority, be it on the basis Q409 Alan Keen: Would you agree that if a local that they see tourism as a major part of their inward authority takes any sort of survey, and many of them investment or simply because they have important are doing this, and they ask the public whether they cultural organisations within them. are worried more about their health or the health of I’ve encouraged cultural organisations and LEPs and some old building or some paintings, whatever it is, others to apply to the Regional Growth Fund, which they’re going to vote for health? Do you agree with is effectively where the RDA money now resides. I’ve me that that resolve needs strengthening and you’re had a conversation with Hugh Bayley about whether, the best one to do that with through the Department for example, York Railway Museum could potentially and local government? apply to the Regional Growth Fund for a grant. I Ed Vaizey: Yes. I’m not the Heritage Minister and haven’t received any information from the people who John Penrose is the Heritage Minister and doing a administer that to say that cultural organisations are fantastic job. I know it will be one of his priorities outside the Regional Growth Fund. I can’t see any to ensure that local government continues to support reason why they should be because they provide heritage conservation. He understands the importance employment just as much as any other industrial of local government pursuing that, because obviously organisation, and if they can show within the criteria heritage is very much a local issue in terms of the of the Regional Growth Fund that they’re going to local landscape and so on, and I know that is one of provide jobs and that they’re going to provide, as it his priorities, which he will take forward. were, private sector employment, I think that’s a good thing. Q410 Alan Keen: On the general cuts to arts bodies, have you encouraged those carrying out the cuts to Q412 Paul Farrelly: I’m going to RIBA tonight. My concentrate, if possible, on the—I won’t use the word wife’s won an architecture research award. We’ve “conservation” to get confused with heritage— been following through the pages of the house journal, preservation of the organisations themselves. There Building Design, the to and fro with the Commission are many annual arts festivals that cost a lot of money. for Architecture and the Built Environment, which I If they were postponed for two or three years they’re referred to earlier. No doubt I’ll be asked tonight to not going to come back again when funding improves. tell people what’s really happening with CABE. Can Have you looked at the principle of making sure the you shed some light? bodies responsible for implementing the cuts don’t let Ed Vaizey: I think the Secretary of State has gone on organisations wither and disappear altogether? Once record to say that the decision to cut the grant to cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

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1 December 2010 Ed Vaizey MP

CABE was one of the most difficult we had to make question was what consideration is being given to the in the Department. We didn’t start this process with a future of that network of centres outwith what CABE view to doing that. I have always been a fan of the or RIBA does centrally? work of the Commission for Architecture and the Ed Vaizey: I think, as I say, they’re an important part Built Environment, which of course was a revamped of the mix but I’m not across the detail in terms of Royal Fine Art Commission, which also has done an what, if any, intervention is needed to maintain those enormous amount of valuable work over very many architecture centres. I’m very happy to talk to you years, including, I discovered, the distribution of the about it or to write to you after this hearing to set out chimneys at Didcot Power Station, which has left a in detail the Department’s views on architecture lasting mark on my constituency. centres. Paul Farrelly: A good one, I hope. Ed Vaizey: I described it recently as an iconic eyesore, Q415 Paul Farrelly: I’d welcome that, because the so I sat on the fence on that as well. But it’s not clear concern is that they may just get lost in the mix as yet what grant may or may not be forthcoming from big organisations based in London fight for their own the Department for Communities and Local survival. Chair, if I could just for a moment give the Government, which of course co-funded CABE. It’s Minister a reflection of what these centres do. certainly true as well that Paul Finch, the Chairman, Ed Vaizey: I’ve been to one in Bristol. is keen obviously to continue the work of CABE, and Paul Farrelly: Their core function is design review. he has proposed a phoenix solution, which I think Urban Vision North Staffordshire has set up a panel needs to be taken very seriously because I think it that is chaired by a RIBA gold medal winning would be regrettable if the learning and expertise that architect, Ted Cullinan. It brings professionals CABE has built up over an extended period were to together. They do it pretty much pro bono, so they be lost. enable what you might call elements of the Big Society to function. If they disappear, there will be no Q413 Paul Farrelly: CABE’s core activity—there enabler. As a result of cuts coming in from English has been a debate about what it should retrench to— Heritage, CABE, the RDAs and local councils, my is design review, which is a peer process so that we local centre, which has been there for six years and get good standards of architecture and urban design, built up an awful lot of goodwill and expertise, now which includes sympathetic development to our has projected probably £15,000, apart from one bid heritage. But that design review is not only carried out for the Regional Growth Fund, that it can bank on centrally. CABE has been the seed funder and for the next financial year. So, very responsibly as an progenitor of a network of 20 or more regional or employer, it is now looking at potentially winding local design and architecture centres that carry out itself up and the danger is that in three months’ time design review locally. I happen to be the founding all that will be lost. patron of one, which means I eyeball people for So if I could encourage the Minister to consider the money when they need it, and that’s Urban Vision North Staffordshire. Have you considered so far the future of these centres and take some representations future of those centres across the country in looking from me, I’d be very grateful. If he wanted to visit at how CABE might survive? one—I say this shamelessly—in North Staffordshire, Ed Vaizey: I think that regional design review, local your visit could take in the New Victoria Theatre, the design review, is a very important part of CABE’s Staffordshire Hoard at the Potteries Museum, the work. I’ve witnessed CABE’s design review work in potential of what is happening at Staffordshire the regions. I’ve been round not just the development University in ceramics with the creative industries, in my constituency but development elsewhere with and the danger to what is being offered because of CABE officers to be given, as it were, instruction on teaching cuts to universities. You can take in an awful what is good design and what is bad design. So I think lot across all your briefs if you found space in your it’s a very important part of that and I’m hoping that diary to come and visit North Staffordshire. we can find a solution, which may involve private Ed Vaizey: I’m sure that I could find space in my sector support for regional design review, and I think diary, because you’ve given me an absolutely RIBA has a potential role to play here as well, because wonderful overview of the importance of culture to RIBA obviously does design review itself. your constituency and area. Obviously I’ve seen the Staffordshire Hoard now three or four times, and I Q414 Paul Farrelly: You’ve missed the point of my was delighted—having handled it personally, wearing question. There’s the issue of what CABE does gloves—to secure the future of the Portable centrally with its own officers, but also this local Antiquities Scheme that is so incredibly important for network of centres that have been built up through the archaeology in this country. As I say, I’m delighted as enthusiasm of people who are committed to the issue, well that the Arts Council has secured the funding to improve the standard of the built environment in to support theatres across the country. I’m very keen some of our major cities, where traditionally people indeed. As you know, I’m passionate about good have thought that any job is a good job, any building design and sensible planning, and it is a matter of with a bit of investment is a good investment and to great importance to me that we can salvage as much hell with how it looks or the skills involved. They are as possible of the expertise that exists. I would be there to counteract that. They do that themselves. keen to go through, perhaps using North Staffordshire They have some funding from CABE and they are as a case study, the funding that the architecture centre encouraged by CABE, but they do it themselves. My currently gets and where we might be able to find cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

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1 December 2010 Ed Vaizey MP alternative sources of funding, given the economic through the tax system, are very important. But I think climate. it will be the first time that Government has had a Paul Farrelly: I’ll drop the Minister a line. coherent and committed policy on philanthropy, and I Ed Vaizey: I was only the Architecture Minister for I think that’s welcome. think about 24 hours; my colleague, John Penrose, is the Architecture Minister. So it may be something Q417 Dr Coffey: I’m delighted to hear that it might that, in terms of looking at the specific example, he involve elements of tax. One of the things about the takes on. USA system is there is much wider tax incentives to give. There’s also the element of recognition. We were Q416 Dr Coffey: Minister, we’re looking forward to both at the Arts & Business Awards with His Royal the announcements that you’ve trailed for Highness the Prince of Wales. Can you give us a philanthropy. What makes you believe that trailer, some tantalising bits, in advance of next week, philanthropists will plug the gap that has been left by on where you think you can make a difference? the reduction in funding? Ed Vaizey: No, I can’t. Ed Vaizey: Dr Coffey, what I think is important to Dr Coffey: If you don’t ask, you don’t get. Isn’t that stress is we don’t want philanthropists to plug a gap. true for philanthropy? I think it’s important we make it absolutely clear that Ed Vaizey: My Secretary of State, who is in Zürich Government remains a committed funder of the arts today, would not be happy if I made the and heritage, a committed supporter, albeit in very announcement to this Select Committee. But I know difficult financial circumstances that we all know that you’re going to be hearing from a recipient of about. Therefore, what we want to do is increase the Prince of Wales Philanthropy Medal, so it will philanthropy in partnership. We don’t want to get the be interesting to hear what one of the country’s most message out there, because it’s completely untrue, that distinguished philanthropists has to say about what if Government has to make some savings that those Government might do to encourage philanthropy in savings be made up by philanthropy. We want to see the future. a general increase in philanthropy. But I certainly think, as I say, that there will be a It’s common to compare this country with the US number of initiatives. The Arts Council will be an where philanthropy levels are much higher, for a important element of that, recognising philanthropy whole range of complex reasons. But I think the step will be an important element of that, and examining change that we’ll achieve with our announcement next ways to support philanthropy in the tax system will week—and it may sound trite—is focusing on also be an important element. But I don’t think there’s philanthropy, making it clear that the Government any secret that those are the obvious areas that one treasures philanthropists and is grateful for their should look at when one is encouraging philanthropy. support. I think that specific measures, and they will Chair: Minister, thank you very much for giving up obviously be subject to what the Treasury is able to so much of your time. I hope your career will achieve in terms of encouraging philanthropists progress, despite the plaudits of Mr Watson.

Examination of Witnesses

Witnesses: Dame Vivien Duffield DBE, Chair, Clore Duffield Foundation, and Rosalind Riley, Trustee, The Brook Trust, gave evidence.

Chair: We now come to the second part of this I have a young Palestinian-Israeli Arab who wanted morning’s session and I welcome Dame Vivien to dance and through his own talent we’ve now put Duffield, the Chair of the Clore Duffield Foundation, him through the Ballet Rambert School for two years, and Rosalind Riley, Trustee of The Brook Trust. Can and this is something so unimaginable for somebody I also thank you for your patience? I’m going to invite from there, and that is what you can do. That, for me, Tom Watson to begin. is the best thing.

Q418 Mr Watson: Good morning, I’m sorry we Q419 Mr Watson: It’s a lovely testimony, thank you. detained you a little bit with the previous interview Rosalind, could I ask you what made you want to with the Minister. What’s the most satisfying thing become a philanthropist? Did you have a desire in life about being a philanthropist? to do that? Dame Vivien Duffield: Signing the cheque, and Rosalind Riley: I was taught to share nicely. seeing the people get the cheque and realising the Mr Watson: You should be a politician, not a difference that it makes. It’s really about what you’ve philanthropist. Thank you. achieved through what you’ve given them. It isn’t about seeing your name up or anything crappy like Q420 Philip Davies: Do you think that in this that. It’s fundamentally about being able to change country we can, or even that we should, achieve an people’s lives, and it is a wonderful feeling. That’s the American style, American levels of philanthropy in best thing about it. And it does happen. You take the arts? Can we have that kind of culture in this people out of their context and you give them a taste, country, do you think? especially in the arts, of something they could never Rosalind Riley: Personally, I think it’s quite difficult. ever have imagined they would do. I think it’s partly because our art scene doesn’t cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

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1 December 2010 Dame Vivien Duffield DBE and Rosalind Riley resemble the arts scene in America and also that a with philanthropy, and I speak as a philanthropist who lot of the philanthropy, what is called philanthropy in supports the arts. America, is corporate giving, which I don’t think is philanthropy. I think it has a philanthropic flavour and Q422 Philip Davies: Dame Vivien, what’s your view it comes from a good place, but it’s not necessarily on these matters? the same thing as individual philanthropy, by a long Dame Vivien Duffield: I know quite a lot about chalk I would say. America. You must remember America is 50 states, I also think that this discussion so far—I’ve been or whatever it is, and within each state there are cities. listening to Mr Vaizey’s testimony—has focused on Within each city there is an orchestra, an opera, a the large institutions and also on England and not on hospital, a university, all of which are supported by the wider responsibilities of Parliament in terms of the the leading people from that town. Of course you can’t arts. There’s an awful lot going on that seems to be do that in England because once you leave London below the notice of this Committee today. I can’t you have very few what you might call speak for other days. philanthropists. It’s much more difficult for the I work in the arts as well; I’m not just a philanthropist. regional museums to raise money, whereas in I work in theatre, in small scale and mid scale theatre, America, the Boston museums raise a lot of money, and a large number of my friends are struggling the Chicago museums do, the Seattle museums do; the artists, struggling practitioners, and they also work in wealth is much better spread than it is in England. It’s Wales, Scotland and Northern Ireland, as well as in partly the size, obviously. England, and I think the picture of the arts—the arts It is part of the culture in America that you support ecology in England—is fantastically complicated. It’s these things, which it is not here. I’ve been saying this extremely closely connected with education as well as for years. In America it is part of society that you go other branches of British life. I don’t know Americans to the opera fundraiser. I was in New York last week involved in arts philanthropy but from what I read I and there were three fundraisers every night, with the feel it’s very, very different. same people admittedly but within sectors, and that is the highlight of their life, the year. They go to the Q421 Philip Davies: Is it not the same outcome, museum ball, and the smartest invitation in New York though, at the end of the day, whatever the motivation is the costume ball—the Metropolitan Museum Of is of either an individual to give money or for a Art's 2010 Costume Institute Ball. We don’t have corporation to give money in a way, because they can anything like that here, thank goodness. But it is a offset some of that against their tax liabilities? If the different ethic and they raise millions at these events. upshot at the end of the day is that an arts organisation Chair: Why “thank goodness”? ends up with some funding that it otherwise wasn’t Dame Vivien Duffield: Well, because it’s a nightmare. going to get, and certainly wasn’t going to get from It’s an absolute nightmare. I mean, they enjoy it. I the state, whatever the starting point of the motivation, went to the Spanish one and that was bad enough. It’s is it not still the same outcome for the arts an absolute nightmare and it is relentless. In organisation concerned? November to December it is absolutely relentless. Rosalind Riley: At an individual level it is. At a country level I would say not because the Arts Q423 Philip Davies: Is this not a bit of a chicken Council is couched within the democratic system and and egg situation here? Presumably all these people philanthropists and businesses can choose exactly in America, who feel it’s so important to contribute to what they give to. For example, Dame Vivien does these things, do so because they know that if they amazing work, mainly I believe focused around ballet. don’t the state isn’t going to do it, and so they Is that true? wouldn’t exist any more, whereas in this country, Dame Vivien Duffield: No. perhaps, people may think, “Well, if I don’t do it, it Rosalind Riley: Not only ballet, but other things? doesn’t matter that much because the Arts Council Dame Vivien Duffield: No ballet. will step in or the Government will step in”. So is it Rosalind Riley: The Rambert School, sorry, is what— not a chicken and egg sort of situation as to how you Dame Vivien Duffield: That was just a— get this going? Is it not the dependency on the state Rosalind Riley: One of those things. But the point is that stops people in this country from feeling they that I could choose, for example, to support only ballet need to give to support these things? and if all philanthropists chose only what they Dame Vivien Duffield: I think people pay higher taxes individually wanted to support there’s no overview, here than they do in America, and it is a social thing. there’s no nurturing of the entire artistic system, and I’m going to go back to the social thing. In England you’re very dependent on who you can get hold of there are other ways of showing that you can grow and who you can get in touch with. It’s one of the socially. In America the only way is to be on the board things that my colleagues in the arts industry have of the Met or to be on the board of MoMA. This is most said to me when they knew that I was coming to the highest social achievement. You can’t become a this Committee, “How do we reach philanthropists?”. Lord or a this or a that, but if you’re on the board of Philanthropists are individuals; they’re not part of a the Met you are somebody. I mean, seriously group. They are self-identifying and they have no somebody. I have a stepson who lives in Seattle and accountability. So, whether or not the tax system the best thing for them is to be on the board of the encourages them to give, it can’t tell them what to do opera, and it really is an achievement. They think with their money, and I think that’s the main problem they’re doing something, which doesn’t happen in cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

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1 December 2010 Dame Vivien Duffield DBE and Rosalind Riley

England. It used to happen in the Victorian days; it very nice for all the Arts Council money to go directly doesn’t happen any more. into the arts, but it was doing quite a lot for training Rosalind Riley: Also I would add to that, that in fact and leadership, and all that, which is going to be the state taking some responsibility for the scrapped. So that is quite serious. We also had the infrastructure of the arts industry is progress. People MLA that funded us, which of course will not be often hark back and say, “Oh, you know, the funding us any more. So there are repercussions that philanthropists in the old days did this, did that”. Yes, the Minister didn’t talk about. they did, and what they were doing was showing the Rosalind Riley: It would be good for the Government way for Government. For the Arts Council to be a to talk more to philanthropists who support the arts, democratic body is, I think, more important for the but I think it would be difficult for them because they people who are in the outlying regions as well as in have to find them. Philanthropists, as I said, are self London; 12% of arts funding goes to the regions. identifying. I’ve never been spoken to by a That’s not very much and I don’t know how you Government person. would make people give to Bradford when they don’t Dame Vivien Duffield: Can I say something? There live there or give to a small village touring are 10 philanthropists who support every single arts organisation if they’re very remote from country life, institution in England. So it’s not very difficult to find for example. us. You just have to go through the programmes, I think that’s the fundamental problem. The Arts through the catalogue, and it’s the same 10 Council is a repository of knowledge and expertise foundations. and experience. It also knows artists and knows how Rosalind Riley: That’s partly what I mean. There are to talk to them, and it can understand the industry. millions of philanthropists or thousands and thousands Philanthropists as individuals can learn that. They’re of philanthropists out there, and the arts industry is usually doing a lot of other things as well. They run being encouraged to find small scale philanthropy, businesses, they’re usually successful people in their small scale donation. If they are going to find that they own right, and quite often they are extremely expert have to find the philanthropists and there’s no central in their own individual interest, their own individual body through which they can find them, so possibly sector of the arts that they support. I know quite a lot that would be something to do. about theatre because I work in the theatre, but I don’t The other point I’d like to make as well is that a vast know anything about ballet and I don’t know anything amount of—well, “vast” is a rubbish word—a large about photography. So I’m not going to be able to percentage of the money that goes to the arts, as give in a general way or to be able to sustain art in a philanthropy, goes to education and regeneration. It coherent fashion. I’m not going to stop doing it doesn’t go to performance; it doesn’t go to paying because of that. theatre budgets; it doesn’t go to core funding. It goes But also, again, I think pretty much all philanthropists to individual projects. It tends to be aimed at children. can say that the majority of their giving goes to social In Folkestone, there’s one very large patron of the arts, causes anyway, that philanthropy is always going to who isn’t supporting the arts because they’re the arts. be a small part of their giving, partly because the arts He’s supporting them because he, as a very clever are perceived to be an industry and also a decoration businessman, has identified them as a source of to life, even though I think fundamentally everyone regeneration for a very troubled area. understands that the arts are necessary. Humanity has The impulses for philanthropy I think are widely invented art and it’s necessary to us. different, and they vary hugely between something like the Clore Foundation, which is enormous, and Q424 Philip Davies: Do you think that something like The Brook Trust, which is small. So I philanthropists can or should work more closely, or think there is a case to be made for the Government maybe it’s the other way round: should the Arts to approach more philanthropists of different levels, Council and the Government work more closely with but I think it’s a very large job. philanthropists? Is there scope for a closer working relationship between the two or would that be neither Q425 Alan Keen: This is a unique situation for us. I desirable or realistic? think MPs tend to know a little bit about a lot of things Dame Vivien Duffield: It sometimes works the other and each of us probably knows a decent amount about way round. We’ve started several programmes, which a handful of different issues. I think it’s true to say the Arts Council and the Government have taken up, that we know nothing about the subject you’re talking especially our leadership programme, which in fact I to us about. I think we should thank you on behalf of had Chris Smith to run, who was fabulous at it, and our constituents for what you do. It doesn’t matter now John Tusa runs it. That has been very actively how much enjoyment you get from it, you don’t need canvassed, both by the Arts Council and by to do it and can I thank you on behalf of all mine? Government, and we’re now all working together. So What you’re telling us is unique to us, and it is it can work round the other way. difficult. Philanthropists presumably enjoy working on We also had a sort of arts thing, which again was their own, although linking obviously in with arts taken up by Arts & Business—a competition for bodies as well. We don’t want to formalise it through children, which is now very closely associated again Government, do we, I would think? Is that what your with Government. So we’ve managed to go the other opinion would be? But no-one in Government has way, which is quite nice. Of course, I’m much more ever spoken to you about it. That tells you something worried about the cuts because of lot of our funding as well. The only influence we can have is with does, in fact, come now from Government. I know it’s Government. Is there anything you’d like us to put in cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

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1 December 2010 Dame Vivien Duffield DBE and Rosalind Riley our report that you think would be helpful to the extraordinary. It’s completely invisible unless you people and the organisations you care about? work in those areas and can see it happening. Dame Vivien Duffield: I’m fanatic about Two friends of mine run a company called Third endowments. I’m very keen on endowments—I’ve Party, and he does all his administration and planning always been keen on them. I happen to be chair of and tour booking for nothing, and he has a family and several tiny little endowments. The organisations a mortgage. Then when he goes out on the road, that’s themselves, especially now, don’t like endowments when he starts—he usually get a small grant from the because they say that I’m removing money from their Arts Council in advance but that just pays for the tour, day-to-day expenses or needs, but we have to have a it doesn’t pay for his work. People don’t know that longer term view. This crisis is going to pass, we that goes on. In the previous testimony, I heard about hope, and the only future for arts institutions—and it’s only large institutions. I deeply value the large for universities, it’s for everything, I’m including all institutions; they give us aspiration as artists. I’m a charitable institutions—is endowments. huge opera fan and we see those as great beacons of I know that Harvard lost whatever it was, but anyhow achievement, but they also can fail, just like small they’re almost back up there again, and they’ve kept companies, in individual projects. going during all these crises. How do we know what Art is slippery, art is dangerous, art is risky in terms future Governments are going to do with the arts? I of trying to measure outcomes. People can have flops. think it’s very short-sighted of us not to be thinking Samuel Beckett said if you fail try again and fail of a far-sighted endowment policy, which must be better. That’s what art is about and I think that is a based on legacies. There must be some mirror of what it is to be alive, in fact. That’s the encouragement for people to give money. Legacies are purpose of art, to hold the mirror up to nature. a huge thing in America. That is what these great So, I feel that there is a lack of understanding of that endowments were made up of, and it’s taken them 30 grassroots network, and I feel that to ask or 40 years to get there, so we should be thinking philanthropists to support that multifarious and about it now. difficult grassroots network is a big ask, to use an I love the idea that if somebody were to leave 20% of unpleasant phrase. their money to charity they would, say, get a rebate of 20% on the other 80% death duties, or some sort of Q426 Mr Watson: Can I slightly challenge your system like that. I’m talking to you as somebody statement there with a personal example from my own whose father left their entire fortune to charity and we constituency? The public art gallery in West paid 98% tax on it. They changed the rule afterwards Bromwich was the physical embodiment and but not retrospectively, and he’d been dead for three expression of a community arts group, Jubilee Arts, months. So, having signed a very large cheque, I do that had lasted for 25 years. It was a very potent feel that people should be encouraged to leave their network of people who believe strongly in community money to the charity of their choice, and that’s a way art, not elitist art, and had won BAFTAs for their work of doing it. But obviously that’s not for the DCMS, with hard-to-reach communities. Then, when they involved themselves in the main institution of the state that’s for the Treasury. to build a big building, The Public, the whole thing Rosalind Riley: The ecology of the arts needs a wider went disastrously wrong. Listening to you two today, exposure. I think that, as you say, there is an ignorance I can’t help thinking that had you two been on the about it. Legacies are wonderful things for buildings board of The Public art gallery it would be in much and for ongoing institutions that have very solid better shape now than the subsequent outcome, which foundations, but from my point of view, in the theatre, was that the Arts Council walked away, having lost a lot of theatre is very ephemeral. Small companies £32 million worth of other people’s money. spring up, do amazing work, those people then go off Rosalind Riley: Flattery will get you everywhere of and start working for the larger companies, who then course, but I think that’s part of the problem, that the go off and work for even larger companies or go into recent trend in arts funding has been to fund large the commercial sector. Then other small companies capital projects. Lottery funding is aimed at that. So spring up in their wake, on the fringe or regional, we’ve had a lot of big buildings that aren’t places like Sheffield that have their own little sustainable, people who have had financial trouble. I schemes. I know a small company that has been given hesitate to name them in case I get it wrong. But I a rehearsal room in Leeds to work in. They don’t have know of one large theatre that has the same problem. any money but they can go and rehearse somewhere. The Northcott Theatre as well in Exeter, very Those people who do everything for nothing are hard longstanding and was given a lot of money and then to reach by philanthropy, and yet they are the it all just went. It was taken away and there was a wellspring of cultural provision in this country— great outrage. I am pleased to say that my theatre they’re people who give educational workshops, who company is going to go there and perform in the will go into schools or into old people’s homes. They spring, so it’s still on its feet. will go anywhere. The problem with arts organisations is that they really Alan Keen: Give themselves. need regular funding. They need core funding. They Rosalind Riley: Exactly. To be perfectly honest, if you need people to be able to come up to them and not look at it in terms of in-kind donations, the largest say, “Ooh, I want to fund a project with my name on philanthropists are the artists and practitioners it” or, “I want to give you some capital”. What we themselves, because the amount of unpaid work that need is to be able to pay people’s wages every week. they do in order to keep the arts going is quite Art and the creation of art reside in the human cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Ev 96 Culture, Media and Sport Committee: Evidence

1 December 2010 Dame Vivien Duffield DBE and Rosalind Riley resource, it resides in people, and if you can pay the I just want to come back to what I said about people they’ll make art happen regardless. You don’t philanthropists. We’re not organised and we don’t need a big shiny building, although it’s nice to have have that kind of mandate, and I don’t think them. My God, a nice dressing room is worth a lot. philanthropists want the mandate to sort of step up I feel that that’s part of the misunderstanding of the and run those things. It’s too individual for that, and I ecology of the arts. Again, a lovely building, that’s have to say, it’s also to some extent fickle. “Fickle” is something if they could tap into legacies and a poor word because it sounds pejorative, but a lot of endowment and so forth, that’s possibly the way philanthropists want to fund something for a short forward. while and then move on and do something else. Plus Dame Vivien Duffield: No, I’m sorry. Endowments they might run out of money quite legitimately from are not about buildings. Endowments are about the some awful, let’s say, financial crisis, and they have core funding, exactly what you’re talking about. It’s the ability to decide what to do with their own money, not about shiny buildings. Shiny buildings don’t come especially outside the big foundations. The big out of endowments, because I’m not going to leave foundations have their charitable motives in stone to £20 million to something for them to go and build a some extent. But I could say, “Actually, I’m not going building with my £20 million. That £20 million is to fund the arts because there’s a massive crisis down going to stay there forever; it’s about the core funding. the road and I’m going to fund that instead”. How can That’s why we’re in such trouble. You can always find you rely on that? people to build a new shiny building, because there’s always somebody around the corner who wants their Q428 Mr Watson: I agree with you but next week name on it. Shiny buildings are not the problem. It is Ed Vaizey’s boss, Jeremy Hunt, is going to get up in the sustaining of them, the maintenance of them and the House and announce some great new way that it the core funding. That’s why, in a way, endowments makes it tax efficient for probably small giving, and legacies help. maybe legacy giving, maybe for corporates to give There are an awful lot of small companies, an awful more money, and that is going to be projected to the lot of small regional theatres that survive because one world as a way of plugging the gap caused by or two locals make it their business. We have a local Government cuts. one near us and people make it their business and they Rosalind Riley: Yes, and presumably if literally walk the streets to get the money for it, which philanthropists don’t step up to support Government is very healthy. policy, even though they may not have voted for that Government, they will look bad. But also who have I must add that we are the absolute envy of most they consulted? I don’t know which philanthropists countries. Our arts scene, which is more vibrant, both they have consulted. at the top and at the bottom, which is more diverse Dame Vivien Duffield: Quite a lot. Quite a lot from and which is more—I hate to use the word “elitist”, all sectors and at all levels—they have. but our elite organisations, such as the National Rosalind Riley: Yes, but this also provides an Theatre, are the envy of the world. example. Dame Vivien is an extremely prominent Rosalind Riley: That’s true. figure, and I am not. There are plenty of me as well Dame Vivien Duffield: So, in spite of how we muddle as plenty of her, and there’s a big knowledge gap along, because it is a little bit of philanthropy, a little between Dame Vivien and myself, as well between bit of Government, a little bit of lottery and so on— the Government and others. we still have the best system in the world. Dame Vivien Duffield: Well, there isn’t really, because I have a fantastic lady who runs my Q427 Mr Watson: Hold on and let me just test you foundation, and she is as plugged into your level as a bit more on that. The RFOs that the Arts Council she is to my level. We do fund an enormous amount are reviewing, the regularly funded organisations, it’s of very, very small organisations, which we’re not said that they sustain about 65,000 jobs across the talking about today. We have schemes that are £1,000 whole piece. Clearly, if they are going to be cut that and 10,000 people apply for them. So, we do know is going to cost people their jobs, the arts ecology and what’s going on out there and so do the other big the heritage ecology you talk about. To what extent foundations. can philanthropy step in and maintain that ecology? Rosalind Riley: Yes, I know, but I didn’t. I meant that Would you be able to put a number on the kind of there’s lots of people like me who aren’t part of the jobs you could save if the tax and the legacy regimes sort of arts establishment, in a way—that’s what I were made more liberal for philanthropists to enter the mean by we’re not a coherent body. arts world? Dame Vivien Duffield: What I meant is I think the Rosalind Riley: I think it’s very hard for us to put a Minister has talked to people who are extremely number on it. Again, that’s not where philanthropists aware of what’s going on lower down. are coming from. We don’t have an overview of the job situation in the arts. Chipping Norton Theatre, run Q429 Mr Watson: Dame Vivien, is it your view that by a friend of mine in fact, received a legacy recently those announcements will have an impact? Will it from someone who liked Chipping Norton Theatre protect some of those jobs? and just gave him a legacy. I don’t think he was giving Dame Vivien Duffield: I don’t think there’s ever going that legacy because he’d written down all the to be an impact. As you say, it’s entirely a question of figures—he gave it out of a feeling for what he wanted luck. It’s what the man who makes millions decides the town to have, and very effective it was too. he wants to give it to or what he wants to do with his cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

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1 December 2010 Dame Vivien Duffield DBE and Rosalind Riley money. Personally, I’m on the arts bandwagon, so to Even the Bedfordshire people who are making the speak, because I started it a long time ago. We cuts don’t want them to happen. specialise in things now because we’re not that large Dame Vivien Duffield: To be cynical, you can go to a foundation, but we manage to make it go quite a the other end of the scale and say we have too many long way. So we specialise in that. But I think if I orchestras in this country and that we cannot support were starting again I’d go for education, and if four orchestras in London. You have to be realistic tomorrow some miracle big tree appears I think I about these things. There’s only so much money to go would plug education now. You just can’t tell. round. One just has to hope that the Arts Council is We’re here only to talk about the arts, but you must making the right decisions. You asked a question remember whatever they announce about philanthropy earlier about whether the Government should interfere is going to apply to the hospitals, to universities, to with the Arts Council. All art is subjective. If we went apply to everything, which to my mind are almost in round here I bet there would be very few art forms a worse state at the moment than the arts. So, although that we all agreed we were interested in. we’re here just at that level, the call, as you say, on Rosalind Riley: Exactly. people’s money is very, very strong. Of course they Dame Vivien Duffield: So, it has to be the lowest didn’t discuss here that the public is also going to be common denominator in a way. You’re just not going cut. So it’s all very well saying the opera house is to satisfy everybody. being cut by £15,000 or £20,000; the people who are buying our tickets have also been cut, so it’s going to Q430 Mr Watson: Should there only be one single go all the way down. funding body? Is there an argument to have two? Rosalind Riley: That’s true. As I was saying earlier Dame Vivien Duffield: As in heritage. arts ecology is connected to education, and a lot of Rosalind Riley: Yes, I think so. arts philanthropy goes to arts education rather than Dame Vivien Duffield: Heritage has more than one. actual performance. It’s very difficult, for example, to Rosalind Riley: It’s interesting about heritage because get corporate people to sponsor performance. They I’ve always found it difficult. You may not have done, like to support the things that show them being nice and again that would illustrate the differences. to children, which is fair enough because they want to Dame Vivien Duffield: Well, I lived with someone look good. who ran English Heritage for 32 years, so I’m quite Dame Vivien Duffield: Or a football match. familiar with English Heritage and CABE and all Rosalind Riley: Or a football match. Regional cuts those terrible names. The defender of CABE has gone, affect the arts as well—I think somebody said earlier I see. Stonehenge, may I plug Stonehenge? That really that the cuts in the Council had a double whammy on is a serious disgrace. Jocelyn Sir Jocelyn Stevens, the arts, which I don’t think was foreseen. I’m former chairman of English Heritage surprised that Mr Vaizey said he had foreseen it, , bless him, doesn’t know what time of day it is, but because the effects have been so devastating. the one thing he knows and knew about was Somerset has lost all its arts funding. Bedfordshire Stonehenge, and for 10 years he fought for that. It is Music Service is one of the best in the country—the an absolute disgrace. number of Bedfordshire Music ex-pupils who are now in the large orchestras and the opera houses of this country is extraordinary. The proposed zero funding Q431 Chair: The Committee in the past has shared policy that has just been brought forward to April precisely that view and made it very plain to the 2011, means that the equivalent of 150 full-time music Government that is our view. teaching jobs are being lost. The knock-on effect of Dame Vivien Duffield: This is not for today, but I just that is enormous. Philanthropists can’t fund a county thought that— music service. How can they do that? If it doesn’t Dr Coffey: They are getting lottery money. exist they can’t fund it. The orchestras that we want Chair: They are not getting what they thought they to fund will end up being filled with the Venezuelans were going to get. who have had that wonderful system. Rosalind Riley: May I say something about heritage? I know Mr Gove wants to create—he seems to not I love the heritage, I love old buildings, I love history, realise that it already existed—that system where blah blah, all that, and most artistic people do. But I every child can learn a musical instrument, but this is think it’s confusing to the arts—to the performing and the knock-on effect of the cuts, because the arts are the practitioner type arts—to be lumped in with seen as an easy cut, even though we know that music heritage, and with museums as well. To me museums, education is one of the greatest gifts you can give a although they have art in them, a lot of them, they’re child. I was speaking at an event with Kevin Spacey not art. Curating a museum is completely different the other week about arts philanthropy and he said from curating an art gallery, for example. Obviously, how many of us have been—I’m sorry I’m taking one there is an artistic aspect to them, but I think the fact of his lines—on the end of a phone to someone, trying that when you’re fighting for the arts you’re somehow to buy something or sort out some problem on the fighting for museums and libraries and heritage and phone, whom you wish had taken a few drama lessons stately homes and everything as well it’s a very— and had learnt how to communicate. It’s something Dame Vivien Duffield: I’m very pleased Nick Serota that’s right in the fabric of British life. It’s something is not here. He would throttle you by the neck. The that defines us. idea that museums are not living art— I think the Bedfordshire Music Service cuts are Rosalind Riley: No, I didn’t say that they’re not but— absolutely tragic and nobody wants them to happen. Dame Vivien Duffield: Well, they are. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

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1 December 2010 Dame Vivien Duffield DBE and Rosalind Riley

Rosalind Riley: Museums also include things like or something they haven’t really thought about, is a anthropological museums. lot harder. Dame Vivien Duffield: Which are wonderful places. Rosalind Riley: Yes, I think that’s true. I think that Rosalind Riley: I’m not saying they’re not. philanthropists are often men like Mr De Haan, who’s Dame Vivien Duffield: But they’re very alive and a good friend of mine. He is a highly successful they’re more educational— business man and he runs all his philanthropy. He runs Rosalind Riley: They are, but what— his HIV project in South Africa. He knew when he Dame Vivien Duffield: It’s all part of art. went there that he could see, as a business man, what Rosalind Riley: But I work in performing arts, for he felt he could achieve better by going more example; there’s such a breadth of institutions and grassroots with it, in fact. That’s often the case with practitioner kind of modes among the arts. I find it philanthropists; they come from a background where hard to see how it can all come under one umbrella in they’ve been extremely powerful and very active, and some ways. Again, I’m coming back to this individual they’ve been able to dictate what happens. That can ignorance. I’m an arts philanthropist, I’m not a be a tremendous strength and it does mean that museum philanthropist, for example. I think, again, philanthropists tend to, once they get into something, different people are interested in different aspects of it. they do really go into it. Dame Vivien Duffield: I find it very, very hard to I go back to this: it kind of means that what happens separate arts and museums. I find the cathedrals is not up to the people. It’s not up to the voters what possibly, and some of those old ruins that we used to happens. It’s up to an individual who made a great have to go traipsing round, those that possibly haven’t deal of money and happens to be an extremely been touched or curated or looked at for 500 years, philanthropic person who’s learnt at his father’s knee possibly those really are what in the old days was what it is to be someone who supports their own heritage. But museums were always part of the arts. I community. That is something that you can’t make don’t think you can separate them. The heritage is a happen, it just happens as part of human nature. It serious problem because it’s much more difficult to doesn’t happen through legislature or through get philanthropists seriously involved in heritage. taxation. A philanthropist, regardless of what the tax system is, is always going to want to give away Q432 Chair: Although the heritage sector would money. point out that the overwhelming majority of heritage When I said I was taught to share nicely, it was a bit buildings are in private ownership and that is a kind flippant but my point is that my philanthropy comes of philanthropy. They certainly don’t make any money from a deep conviction that it’s unfair for me to have out of them. so much money, which I can’t spend. If I spent all the Dame Vivien Duffield: It is, yes, but not the money that we have on me it would be ridiculous and cathedrals and not the, you know—and also how obscene and ludicrous and deeply counterproductive, much longer are those families going to be able to and possibly there would be a revolution. Perhaps not continue keeping those houses? It’s a little bit like just for me, but do you know what I mean? It’s wrong. your theatre companies; I know lots of families, or That’s why you give away money. It’s because you several, who live in these wonderful relics and they see other people who need it. That’s the simple truth. can’t afford anything. Dr Coffey: Going back to Tom’s question, I felt I Q434 Damian Collins: Could I ask you, as a follow- hijacked it. Sorry. up to that and I would be interested in Dame Vivien’s views and experiences on this, too: when we talk Q433 Damian Collins: I just want to ask a couple of about encouraging philanthropy, we’re largely talking questions about the relationship between philanthropy about opening up money in whatever form it comes, and Government—the different tiers of Government. but do you think that public bodies and the Rosalind Riley, you mentioned, but didn’t name, Government could learn a lot from the way Roger De Haan in my constituency. Roger’s quite philanthropists run their charitable trusts and their interesting because he started off by being asked to be organisations? Certainly from my experience of involved in becoming chairman of the Metropole Art seeing Roger De Haan’s charitable trust at work Gallery in Folkestone, and then from that considered there’s a degree of business rigour, and maybe his own how you make the arts more accessible in that personality, that he has brought into the way he runs community, and also then into the idea of how you that. Given some of those disciplines that made that gallery more sustainable and developed a philanthropists bring from their other experiences in much bigger plan. But that was something that he sort life to the art or to heritage organisations, I wonder of came into and then developed his own view about whether the public bodies that work in that sector what he wanted to do to drive it. Do you think that is could learn something from the way these private typical of the way philanthropists go about their bodies deliver their support. work? They have different motivations for getting Dame Vivien Duffield: But you have to go smaller, involved, or different life experiences to get them because the minute you get into the very large involved, but when they do get involved they develop foundations I’m afraid they become what we call their own plan that they want to drive, and for institutionalised. You just look at how many people someone to come to someone with basically a lot of they have on their subcommittees. There’s an awful money and say, “Will you get involved in this lot of trusts that have what I call professional trustees, scheme?” which may not be their baby or their project and those are no longer philanthropists. cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Culture, Media and Sport Committee: Evidence Ev 99

1 December 2010 Dame Vivien Duffield DBE and Rosalind Riley

The philanthropist is the person whose money it is, Rosalind Riley: Yes. In terms of whether the who signs the cheque, who makes the decisions and Government can learn from philanthropists and their does what they want. On the whole they don’t work, business skills, well it does depend. I think it would the philanthropists, in the field where they’re giving again be quite hard because there are such a lot of the money, because that’s too easy. That is a small charities. How can you go out and learn from professional trustee. They are just people who decide them? Although they share common aspects and they what they want to do with the money. They put it all have trustees and so forth, they don’t even meet at aside and they’re going to spend it and they’re going the same times of year. Some of them meet four times to use all their business knowledge or all their a year, some of them meet once a year, some of them; knowledge to do it in the most efficient way. But are there’s no coherence—once again I use the word—in there lessons for Government from it? I don’t think so. the philanthropic world because it is a collection of The other thing that is very dangerous is all these new individuals. Anyone could go to Roger De Haan and individual philanthropists—if you want to call it— learn a great deal. Anyone could talk to Kevin Spacey who decide to do their own thing. Why is it for about half an hour and learn a great deal. dangerous? Because say you get somebody in Dame Vivien Duffield: Yes, you should have had him Somerset or somewhere who decides he wants to have in. He’s brilliant at fundraising. a theatre that does nothing but—God knows— romantic something or others. He’s going to build it Q435 Damian Collins: Dame Vivien, were you and he’s going to fund it and he’s going to look after involved with the Oxford University endowments it. Meanwhile you have a perfectly good theatre, so project? it’s the same thing. All these people who fund their Dame Vivien Duffield: Yes. own schools, which are slightly different from any other schools. Well, if they put a third of what they Q436 Damian Collins: That in one way has proven put into that just into the local school, they could do one of the biggest projects in the country. much better. Dame Vivien Duffield: I was chairing the campaign, It is the same thing everywhere; in all these tiny little yes. medical charities that set up—the multiplications of Damian Collins: I just wondered what your views it—and within all the little music charities. If you were on that experience and how you think that has counted up how many individual music charities there gone. are you’d die, and all doing—not the same thing, but Dame Vivien Duffield: I think the academics are even more or less. We see this. We must get 200 or 300 more difficult than the heritage people, and I think I letters a week and the multiplication in all these things shall leave it at that. We have a long way to go, but is appalling. we are better. The problem with the universities is that Just take how we’re saving money. I’m on the board in America I think it’s something like 65% or 70% of the South Bank: how are we going to save money? return. In England it was pathetic when I started at One of the things we’re looking at is all these Oxford. It has got a bit better; I think it’s about 18% orchestras—trying to pool their administration or 19%, but not with every college. I have two together, trying to make them have the same ticketing, children. One went to Harvard and the other went to trying to make them have the same advertising. There Cambridge. The Harvard one, they never left him are things that one can do that can have an effect at alone from six months before he went until now, and every level. We can do that as philanthropists, and we he’s 40, but the Cambridge one, they’ve never written can do that sitting on boards like that. That’s where it to him. Never. all mixes in. Are you anywhere near Margate? Rosalind Riley: My husband supports Oxford Damian Collins: Round the coast from Margate. University, he’s an alumnus of Oxford, I suppose a Dame Vivien Duffield: But you’re not MP for member of the university, I should say. Margate? Dame Vivien Duffield: Do tell me what college, I’ll Damian Collins: No, I’m not, a different make sure he’s written to. constituency. Rosalind Riley: He has quite a lot of people writing Dame Vivien Duffield: Because we’re just funded a to him and people occasionally even phoning him up big thing in Margate. to follow up their letters. So they are beginning to Damian Collins: Roger Gale, I think, is Margate. learn. Dame Vivien Duffield: How did it come to us? They Dame Vivien Duffield: We are beginning to learn and applied. People are getting cleverer and cleverer. They I think that future generations will get better at it— know that we fund that sort of thing. Have I ever done the class spirit and the giving back something that anything in Margate before? No. But do we as a you’ve had and all that. foundation try and get all over the United Kingdom? Rosalind Riley: I beg your pardon. May I just add one Yes, and I think a lot of people do, if they see you’re thing? One thing that some artists have said to me is doing something that attracts. There’s a lot of research that when they work in very small scale and they have going into raising money. I know because I raise as very little resources, as I described, and they’re doing much as I give away. And you have to sit down and all their admin for nothing, applying to a great many you have to see the track records of what people give different trusts is a very heavy workload compared to what, and you have to then follow up. You have to with applying to the Arts Council. The Arts Council find what tickles these people’s imagination. Kevin has made it more difficult. If you want more than Spacey is an absolute expert at that. He’s very, very £10,000 you have to write about 8,000 words, which good at it. is a little disproportionate, in my view. But writing to cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Ev 100 Culture, Media and Sport Committee: Evidence

1 December 2010 Dame Vivien Duffield DBE and Rosalind Riley

100 different trusts is another matter, especially when company who would sign a cheque. If he liked the they all have different forms or they ask different opera you’d get £100,000. If he liked the art, and if questions or they want different information. You by any chance his wife sat on the local theatre can’t recycle every application to every trust, and also committee, that’s how the local theatre got the money. again the timing thing about when the trustees meet Now that’s gone because businesses have committees and all that. on which the chairmen don’t sit, and it is about how Another thing about Britain is that because of the many. Why does the Royal Academy do so well? democratisation of the arts, since the war really, going Because you can get bodies through the door and they and asking cap in hand—people have said this to me, can invite all their staff—they can do all that sort of it’s not my own experience—they do feel, after the thing. 100th time going with their cap in their hand that they Same thing in the National Theatre. They can have just feel so bad about it. Philanthropists don’t want the whole thing. Small theatre companies can’t do people to feel bad. We try to make it as easy as that. We can’t do that at the Opera House. Frankly, possible to ask for money and I don’t know a nobody wants to come to most of what we put on at philanthropist who isn’t kind. But it’s kind of anti- South Bank because it’s too modern or it’s not British, isn’t it? It’s kind of anti the British spirit that traditional enough. So business is a problem. instead of us running this country as we want it and having everything work as we want it, we have to Q439 Dr Coffey: One of the differences I see is keep going and asking individuals, “Oh, can you prop about corporate reputation. How does a philanthropist us up?” It is necessary. I understand it’s necessary. decide which projects to support? Something that is Dame Vivien Duffield: You know, it’s the cats’ home, quite risqué? Or does that not matter to you? it’s the dogs’ home, it’s the widows. I remember I had Dame Vivien Duffield: It does. At the South Bank we a girl who came to work for me who cried at the do get quite a bit of corporate sponsorship and we had first foundation meeting because we must have had 98 a big Brazil festival last summer. demands and you can’t possibly give to 98. “Oh”, she Mr Watson: That was brilliant. Fantastic. First-class. said, “but the cats’ home”. I’ve always remembered Dame Vivien Duffield: It was brilliant, thank you. the cats’ home. I hate cats, so that’s— What did you go to? The football thing? You have to train them. I remember in Israel when I Mr Watson: The drummers. hired a new girl I said, “You’ve just got to not take it Dame Vivien Duffield: The drummers. There was a personally. It’s not your fault that their application fantastic footballer who did the most amazing thing— hasn’t been successful” and I think that’s—I don’t I’ve never seen anything like it. It was like modern think there is anyone. Look at the scientists for ballet. It was fabulous. With the Brazil thing, which goodness sake. Look how many applications for funds was HSBC I think, we worked for two years on the they write, and that’s not considered philanthropy. sponsorship and exactly that, that it would all be They’re not writing for philanthropy; they’re writing within the guidelines of what the bank was doing and for the money to do their research. it wouldn’t be controversial, it wouldn’t be this and it wouldn’t be that. In the end it encompassed Q437 Damian Collins: Can I just ask one final everything and they loved every bit of it, and it really question? Arts & Business was a body that did, in this worked for them. But there was a lot of work. It was very disparate marketplace, try and bring some of the a lot. The girls did an unbelievable amount of work. threads together, share some knowledge, best experience, and celebrate the work of individuals. Q440 Dr Coffey: Personal, in terms of your trusts? What’s your view on the imminent demise of Arts & Rosalind Riley: In terms of the trust, I like to support Business as an organisation? work that I think wouldn’t be done otherwise. Mr Dame Vivien Duffield: Pass. Vaizey said if something is supported by the Arts Rosalind Riley: I think it may not die. You say Council then it’s more likely to be supported by demise; I don’t think it’s going to die. I think it’s philanthropists. I think that’s an interesting point to going to get a lot smaller. It’s not about philanthropy have made. One of the problems, especially with though. They do run the philanthropy medal and I smaller scale philanthropists, is because you have know Mr Tweedy is very keen on philanthropy, such an obligation to account for what you do— although I think he shares similar reservations to the because you’re in receipt of taxpayers’ money and the ones that we have expressed today. But I also think it charitable rules are quite strict—you can’t just chuck is about business; it’s called Arts & Business. It’s it about on stuff that’s very risky. You can’t be about business sponsorship and, as I said earlier, frivolous, let’s say, just because you fancy seeing business sponsorship is a different beast. It’s something a bit crazy. completely different from philanthropy because they You also have to be careful in terms of the financial need to get something back from it. capabilities of the organisation to whom you’re giving. The due diligence is something that stretches Q438 Damian Collins: Dame Vivien, was that a across the social funding as well. You can ask a lot of positive pass or a negative pass? questions about peoples probity. It’s easy if it’s Dame Vivien Duffield: Pass. To be serious, the another charity that you’re giving to. That’s fine. If business side, which was completely non-existent it’s a very small scale organisation or a new when I started in this line of work, is now very much organisation, or is untried work for an established stronger than it was. Of course, in the old days when organisation, then if the Arts Council is already I was raising money it was the chairman of the behind it then you feel a lot better about giving your cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:05] Job: 005777 Unit: PG05 Source: /MILES/PKU/INPUT/005777/005777_o005_kathy_HC 464-v corrected.xml

Culture, Media and Sport Committee: Evidence Ev 101

1 December 2010 Dame Vivien Duffield DBE and Rosalind Riley money to it. You don’t just feel happier; you have a they were all interviewing the same people and solid sense that your money is going somewhere good. everybody was going round and so we saw the gap. I have to say, I’m a little bit more risky with theatre, That’s something the Arts Council probably would but I’m a theatre practitioner so I can often find out never have been able to do because they wouldn’t about people and their work by just asking people I have had the money to do it. That is what charity is. know, so that’s easy. But supporting theatre at that It’s about the icing and one must remember it should lower level is difficult if you don’t have the staff, or stay that, and not be the filling. you don’t have the personal knowledge to be able to Rosalind Riley: Yes. To hear Mr Vaizey say that it’s find out, “Are they any good?” if you haven’t seen not to plug the gaps, I’m afraid that seems a little bit their previous work. of an unrealistic statement, from my point of view, as Dame Vivien Duffield: Remember that charity is the a philanthropist. I think there are going to be gaps and icing on the cake. That’s what it’s meant to be. In someone is going to be asked to plug them. difficult times you suddenly find yourself being the wedge in the middle, which is keeping the cake Q441 Dr Coffey: What I have just heard from Dame together, but that’s not what we’re about. We always Vivien is that you don’t see your foundation as think in our foundation that we’re about doing things plugging the gap? That’s not your purpose? that the Government can’t do, or shouldn’t do, and Dame Vivien Duffield: No. That’s not our role and part of that, of course, is taking risks and doing things it’s not the role of the foundations. It is to supplement that the Arts Council would never do. Just to harp and enhance what the Government and the Arts back on the leadership thing, that was because there Council are doing. was a gap. That was because three of the top five Chair: I think we will call it a day. Thank you very museums in London were looking for directors and much indeed. That has been very helpful. cobber Pack: U PL: COE1 [SE] Processed: [28-03-2011 15:18] Job: 005777 Unit: PG06 Source: /MILES/PKU/INPUT/005777/005777_o006_kathy_HC 464-vi corrected.xml

Ev 102 Culture, Media and Sport Committee: Evidence

Tuesday 7 December 2010

Members present: Mr John Whittingdale (Chair)

Ms Louise Bagshawe Paul Farrelly David Cairns Mr Adrian Sanders Dr Thérèse Coffey ______

Examination of Witnesses

Witnesses: Barbara Hayes, Deputy Chief Executive, Authors’ Licensing and Collecting Service, Richard Combes, Head of Rights and Licensing, Authors’ Licensing and Collecting Service, Jim Parker, Registrar, Public Lending Right, and Stella Duffy, Author.

Chair: Good morning. This is the sixth session of our functions would be transferred to another publicly the Committee’s inquiry into funding of the arts and funded body. heritage. We are focusing particularly this morning on authors and the public lending right, and I would like Q444 David Cairns: So between July, when you to welcome Barbara Hayes, the Deputy Chief were not immediately for the chop, and 14 October, Executive of ALCS (Authors’ Licensing and when you did get the chop, your only involvement Collecting Service), Richard Combes, the Head of was submitting proposals of your own? Rights and Licensing at ALCS, Jim Parker from Jim Parker: Yes. Public Lending Right and Stella Duffy, who is David Cairns: Nobody came to you and said, “You’re representing the writers’ community. clearly under consideration for this. Let’s have a talk Stella Duffy: All of them. about what you think”. You sent in evidence, Chair: Absolutely. David Cairns, to start us off. essentially? Jim Parker: That is true. Q442 David Cairns: Good morning, ladies and gentlemen. The first question is for Mr Parker. We Q445 David Cairns: So you sent in evidence about have heard as part of this inquiry from various how the function could be reformed—some organisations that are being abolished as part of the colleagues might want to pick up on that in a bonfire of the quangos that there wasn’t an enormous minute—but in the immediate aftermath of the amount of consultation or prior discussion with them decision to abolish you, did they then come and say, before the axe fell. Can you tell us what discussion “Now, you have submitted this interesting paper. Let’s you had leading up to the announcement of your discuss where this function could be transferred to”? abolition? What has been the process since 14 October? Jim Parker: To be truthful, there wasn’t a lot of Jim Parker: The initial phone call was to say that we were to be abolished and the name of a body was discussion. It is more or less as you described. We given to me as the body that the department had in knew that arm’s length bodies were under review, and mind that we should be transferred to. I think that it being the smallest of the arm’s length bodies that are is public knowledge now that it was the Arts Council. funded by the department, we knew that we would be But the Arts Council is having a number of other looked at. But other than knowing the review was functions transferred to it, and it eventually transpired going on, we were not asked anything about our own that for whatever reason that wasn’t going to work. fate. It coincided, of course, with the Comprehensive Therefore, Ministers and officials looked around for Spending Review, and I did put in some proposals another body within the department that would be best myself, knowing that the review was ongoing, suited to take on our functions. Other than being kept proposing a public/private partnership with colleagues up to date from time to time, saying, “Well, we here from ALCS, which I thought was an interesting haven’t decided yet” or, “We’re making an approach”, idea. I think that was well received by Ministers, and I have not been consulted on the choice of body—I we thought that might have been acceptable. You will think that is the direction of your question. know that we were not mentioned in the first round of abolitions announced in July, covering the Film Q446 David Cairns: I realise we are in the realms of Council and the MLA, and it was fairly late in the day conjecture here, Mr Chairman, but from the when I was told that we were to be abolished. I can’t conversations you had, did you gather that it was the say that we were consulted specifically on the preferred outcome of either officials or Ministers that abolition. the Arts Council be the repository of this function? Is that what they wanted to do? Q443 David Cairns: How did you hear? Jim Parker: I think so, yes. I think there had been Jim Parker: I was rung up by one of the senior civil quite a lot of thought given to it, and the feeling was servants of the department and it was explained to me that we would be a good fit—I think was the that, as part of the arm’s length review, Ministers had expression used—with the Arts Council, given that we come to the decision that, with a view to streamlining are working with authors and paying out public funds Government, our organisation would be abolished and in support of authors. I think there are distinct cobber Pack: U PL: COE1 [O] Processed: [28-03-2011 15:18] Job: 005777 Unit: PG06 Source: /MILES/PKU/INPUT/005777/005777_o006_kathy_HC 464-vi corrected.xml

Culture, Media and Sport Committee: Evidence Ev 103

7 December 2010 Barbara Hayes, Richard Combes, Jim Parker and Stella Duffy differences between what we do and what the Arts Chair: But that would suggest that we’re talking at Council does, but given that a decision had been made the most a couple of hundred thousand pounds? to wind us up and move us somewhere else, I could Jim Parker: Yes. We only employ nine people. see the logic of what they were saying. Q452 Chair: You were very clear that you will be Q447 David Cairns: Did you get the impression that guided by Ministers—and that is only right—but the pushback came from the Arts Council saying, “We Stella, as a representative of the writing community, have got too many other things; we can’t be taking how would you feel about the Arts Council taking this on”? over responsibility? Jim Parker: That is difficult for me to answer. I’m Stella Duffy: As someone who also works in theatre, not sure of the answer to that. I am going to be very kind about the Arts Council, but—and I’m sure Louise can back me up on this— Q448 David Cairns: But given that your evidence when you ring PLR, because there are nine people wasn’t suggesting a partnership with the Arts Council, there, you get through straight away. The same is true it was suggesting a partnership with colleagues here, for ALCS—for all that they are a private organisation, one assumes that it would not have been your they are a small and easily understood organisation. preferred option to see these functions transferred to To me, as a person who works by myself and for the Arts Council? myself, it seems slightly absurd to take two things that Jim Parker: To be quite candid, I thought we had a are working already really well and happy to work good proposition in front of us, but I’m always of with each other and then stick this one in a much course prepared to be guided by Ministers, and if larger organisation, where it is going to get lost and Ministers could see advantages in us being transferred where the people don’t already know how to run it, as to another body within the department, that is fine. Of these people are already doing very successfully. As course, we like to think that we do a good job and are you have already said, the money is still coming to efficient and give a good service to authors, but we the writers; it has been ring-fenced. So then to give it are very small—there’s just me and nine others—so I to some people who already don’t know how to think in any wider review of arm’s length bodies, administer it as well as these guys do seems a bit people are going to say that it is difficult to justify the absurd to me. existence of such a small body. So there could well be economies of scale were we to be taken over by Q453 Ms Bagshawe: Mr Chairman, I’m going to another body, but you are right: it wouldn’t have been start by declaring an interest. I am an author and I my first choice. have the right to benefit from PLR, although as a matter of fact, I have never claimed it in my entire writing career; nevertheless I am eligible to receive it. Q449 David Cairns: Do you think that the ALCS is This is principally because I have never got my act probably the best place to fulfil these functions now? together to claim it, rather than any high-minded Jim Parker: Yes. Given that I’m responsible to the thoughts—as it’s several thousand pounds, it doesn’t Minister and will always be guided by him, if the say very much for my organisational skills. Stella, Minister feels we would be better working with speaking as an author, do you find it as surprising as another body, I’ll accept that. But it was always my I do to hear Mr Parker say that he considered the Arts proposal that we would form a public/private Council? When we think of the Arts Council, we think partnership with ALCS. When I came up with that of it as a patron of the visual arts, rather than arts in proposal, it was on the basis that we would continue their broadest sense, including music and literature. It as an independent body, and we had some quite seems to me that since PLR had already been working exciting ideas on what we would do together. But with ALCS and there are already economies of scale since then, I know that ALCS themselves have put that have already been put in practice that the natural forward a proposal that they would take over PLR, and obvious choice was ALCS to administer PLR’s and I would be perfectly happy with that as a functions. I am slightly surprised that the Arts Council proposition, given our track record over the years. was ever mooted, because they seem to be working in a totally different field of the arts, doing a completely Q450 Chair: How much is the abolition of your body different job. Do you think that this is a natural fit? going to save? Barbara, could you chime in on that? You’ve worked Jim Parker: Well, I’ve no figures, Chairman. with PLR before; do you perceive an ability for economies of scale? You are already used to dealing Q451 Chair: What are your administrative costs? with writers and used to dealing with this particular Jim Parker: Our administrative costs are £750,000 a slice of our creative community. year. Let me make it clear that Public Lending Right Stella Duffy: I am somebody who writes in a slightly as a right will continue, and the funding has been different field to Louise, and therefore has really decided upon, which you will know anyway through needed the PLR money. I would like to just say about the Comprehensive Spending Review, and is to be the PLR money, there are writers who, like Louise, ring-fenced. So the operation will be handed over to are very successful commercially, but that isn’t the another organisation. Until I find out, of course, who bulk of writers. The bulk of British writers are earning is taking us over, it is difficult to know what the new a third less than the average wage, and we really want chief executive will plan for us. But there may be to keep a wide range of types of writing, not just very scope for economies of scale, as they say. commercial, not just very high-end commercial, but cobber Pack: U PL: COE1 [E] Processed: [28-03-2011 15:18] Job: 005777 Unit: PG06 Source: /MILES/PKU/INPUT/005777/005777_o006_kathy_HC 464-vi corrected.xml

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7 December 2010 Barbara Hayes, Richard Combes, Jim Parker and Stella Duffy the entire wide range, and PLR is very valuable for through the collections that ALCS makes on their that. So I know the money is ring-fenced, but I think behalf. So I think we see that international angle as it’s worth saying it is very valuable, particularly for another important area where we can continue to build older and midlist writers, people who are getting into our joint efforts. their 60s and 70s—as I hope we all will be—and still publishing, and who aren’t able to do that great sort Q456 Ms Bagshawe: Mr Parker, one thing I consoled of publicity thing that the young writers or the myself with when thinking that I was never getting celebrities can do. my PLR cheques was my understanding is they go But to speak to PLR and ALCS, yes, of course it back into a fund if they are not claimed and they help makes much more sense to have two bodies that know writers who will have more need of them than I do each other and are already working well together, lower down the list. As Stella has quite rightly said, particularly when the Arts Council has already been most authors don’t make very much money, and with asked to make massive cuts and is very confused the way in which publishers are driving the industry about where those cuts are going to be made. As a at the moment, the midlist, as we all know, is under theatre worker as well, I do see the Arts Council as great threat. So to maintain the diversity of the UK’s working for visual arts and theatre. Although I know publishing industry, PLR is really important for of possibly one writer who has ever received any sustaining writers. Given that, I am interested in your funding from the Arts Council directly, I know lots of earlier evidence as to why you would have felt that theatre practitioners and visual artists who have. the Arts Council would be a better fit than ALCS, These two bodies seem to me much more adept to which after all is an organisation that specialises in work together than any other large organisation that writers and has the expertise in writers. We are such might want to take over PLR, including those that are a small community, such a small but precious more about the product than about the writer. fragment of the creative community in this country, and it would seem to me to be the overarchingly Q454 Ms Bagshawe: Thank you. Barbara, your obvious choice in the first place. What made you think thoughts? that the Arts Council, with its specialisation in the Barbara Hayes: Well, my thoughts are initially visual arts, might be more suitable? obviously to congratulate Jim on such a tight ship at Jim Parker: Well, I wasn’t presented with a choice. Public Lending Right, and I think perhaps that is what At that stage, I was told that Ministers were minded has caused where we are now—it is as lean as it can to abolish the PLR organisation and for our get. It is a very effective and very well thought of responsibilities to be transferred to another publicly- organisation, and our preference of course is to keep funded body within the DCMS family. The question PLR exactly where it is now. Unfortunately, that of a possible privatisation, if you could call it that, did doesn’t seem to be the way that the current situation not come up. It seemed to me that were we to be taken is demanding. over by another body within the DCMS family, the With regard to the types of work that we do, we have Arts Council seemed at that point as reasonable as any certainly had joined-up writing together with regards other bodies within the department. Had it been a to membership recruitment strategies. Things that we wider discussion and had I been asked, “What about were talking about as a business joint venture included a possible partnership or responsibilities being communications and tracing authors for whom we are transferred to a private sector body?”, then of course holding funds. So it’s that type of work that we could I would have been most interested in the ALCS do together, and there are a great number of synergies option. That only emerged in later months, I think it going on here. We do not want to be duplicating is fair to say, because it just didn’t seem to be an effort, so there seemed to be a natural partnership that option when I was first told that we were being could develop. abolished.

Q455 Ms Bagshawe: Mr Combes? Q457 David Cairns: I’m very keen to ask this Richard Combes: Just to add to that, another area of question, as you know. Obviously there’s been a overlap that we have had for some years with PLR is campaign for a while on PLR on audio books and e- in the international PLR arena, where the UK books, which seems to have been the victim of the operation that Jim has run is open to claimants from spending cuts. If PLR was extended to audio and e- anywhere within the European Economic Area, and books what would be the additional quantum of cash ALCS effectively offers the reciprocal arrangement, that would be available to writers? whereby UK writers whose works are lent in the Jim Parker: We did some work on this, if you’re various overseas PLR schemes claim their money asking how much more money we would need to through ALCS. So we are effectively running parallel include the writers involved with audio books and e- operations of a sort already, and I think Jim has done books. It was fairly straightforward to work out audio a very important job over the years as an advocate books, because we had statistics; e-books are still for PLR. There are schemes growing up over Europe quite new and it was less easy, but I had a ballpark constantly. European law requires it, but it still takes figure of something like £600,000.1 But I have to a while to get the political traction to actually have the schemes and the adequate funding in place. I think 1 Witness correction: From memory £600,000 was the first estimate that I gave DCMS when the proposal to extend PLR Jim has done very important and significant work over in this way first came up. This was subsequently reduced by the years to hold up the UK PLR model as a sort of DCMS to £337,000 in the supporting information provided blueprint for best practice, and UK writers then benefit at the time of the Digital Economy Act. cobber Pack: U PL: COE1 [O] Processed: [28-03-2011 15:18] Job: 005777 Unit: PG06 Source: /MILES/PKU/INPUT/005777/005777_o006_kathy_HC 464-vi corrected.xml

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7 December 2010 Barbara Hayes, Richard Combes, Jim Parker and Stella Duffy say that included provision to develop the software upper end? Is it the case that this would mainly benefit that we needed to put in the libraries to collect the more popular writers, like Tony Blair? information. As you know, we collect details of book Chair: I am currently listening to Peter Mandelson loans from libraries across the country, and we have reading his book in my car, so I don’t know whether specific software to do that, which we have developed that qualifies as more popular. for several years. E-books are slightly different, so we Stella Duffy: Can I jump in on this? Yes, that is true. made some estimates, and the ballpark figure was By midlist, we actually tend to mean authors who are around £600,000. Does that answer your question? in the middle of their career, rather than the books that are selling middle way— Q458 David Cairns: Yes, and I was going to ask David Cairns: Sorry, I apologise. about what percentage of library lending is audio. I Stella Duffy:—as opposed to bottom of the list as wasn’t aware that you could borrow an e-book. well, but in terms of speaking for the narrators, an Jim Parker: Yes. ordinary person doing a voiceover as a performer David Cairns: How does that work? would get either a buyout or residuals. What is Jim Parker: It is early days and something like 40 happening with the audio books is that they’re not library authorities across England are, let us say, getting what are in effect residuals, so by taking away dabbling with e-books and one or two of the larger the audio books we are doing the narrators—who are ones, like Essex, make them available in a variety of sometimes the writer, but generally a performer—out formats. If you are a library user, you can access a of money in what is, in every other way, a normal virtual library of e-books from your home with a acting contract. The same goes for the writers. But choice of whatever you want to download, or an certainly, to speak for the narrators, they are losing out. alternative is to go into the library with your Sony reader or your Kindle and to download an e-book on to that and take it away in a more traditional format. Q460 Chair: That is interesting. If the writer was Chair: Does it disappear after 30 days or something? getting only 6.25p for a published written book, how would that divide between a narrator and a writer? Jim Parker: It has a two-week period, yes. Stella Duffy: I don’t know what per cent they make. Chair: Two weeks. It’s a Mission Impossible library Chair: Had you got that far? loan. Jim Parker: We were poised to discuss that, but we Jim Parker: But I have to say there have recently have a precedent, because within the existing scheme, been some problems, and the publishing community we make payments to writers, illustrators, editors and is very worried about the format that allows people to translators and we have a number of precedents for download at home. They are worried about security shares of PLRs and intellectual property rights. For and copying and a number of publishers have example, for a classic children’s book the illustrator withdrawn that privilege, and you will be aware as a gets 50% and the writer gets 50%, so I would think Committee that there is quite a tough debate going on we would do something similar with the narrators and at the moment between the library community and the the authors—a 50:50 split or something of that nature. publishing community about those sorts of home downloads. Q461 David Cairns: I realise this is relatively David Cairns: Yes, we are familiar with download academic, because it is not going to happen, but— debates, which we will not reopen here. You say that perhaps this is a kind of redistributive social e-books are still in its infancy and there are only 40 democratic point—if you had an extra £600,000 to go libraries doing it. In terms of audio books then, which into the overall pot of money, would it be the best use have been going for much longer, what percentage of of it to give that money to writers who are already overall lending is actually done via audio books as doing quite well, because they are up in the top PLR, opposed to books? or would it not be better to use that money either to Jim Parker: There is something like 310 million book increase the PLR to 6.5p, or to use it in some other loans a year and 8 million audio book loans, so that way for writers who are less borrowed, to take up gives you a sense of how many are being used. It is Louise’s point, and who need a bit more support? If something of a long-running sore for authors and the this proposal were to be taken up, would it not just narrators—of course, the people who narrate the audio feather the nests of people who are already doing books would have been covered by this extension, and quite well? I feel saddest for them in a way, because they are not Jim Parker: I was thinking more about your original getting anything at the moment for the physical loan point, of who are the people who are borrowed in of an audio book. audio book form, and they are not all the bestsellers. Books that are popular, such as the vet books in North Q459 David Cairns: But to pick up on Louise’s Yorkshire and those sorts of books, are written by point—forgive my ignorance here, and I am happy to people who are not necessarily bestsellers or who are be corrected for being very wrong—is it the case that not writing books now they have retired, as Stella was the books that are turned into audio books of their saying. But I try not to make judgments. We tend to nature tend to be at the slightly more popular end of think of PLR as a right, and if you have a right to the market in any case, and if you are midlist or receive a payment for the loan of a printed book, it’s whatever the phrase for bottom of the list is, it’s not difficult to say why you should not have a payment likely that your book is going be an audio book. So for the loan of your audio book, even though you may that is going to, or could, benefit the people at the or you may not be doing better than colleagues. There cobber Pack: U PL: COE1 [E] Processed: [28-03-2011 15:18] Job: 005777 Unit: PG06 Source: /MILES/PKU/INPUT/005777/005777_o006_kathy_HC 464-vi corrected.xml

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7 December 2010 Barbara Hayes, Richard Combes, Jim Parker and Stella Duffy would still be a maximum payment that kicks in— to be paid for the many thousands of borrowings of which, as you know, is £6,600—and that frees up £1 my work, but I do have that right and surely it would million each year for redistribution for people further be establishing an unfortunate precedent if the only down the list. part of the UK’s creative community that was denied Stella Duffy: The other thing to say about that is that, the right to be paid for their work were writers. As a looking at it the other way, people taking out audio corollary question, would you comment on the fact books tend to be older and less literate, so by giving— that if the average writer is earning a small wage for even though it’s only academic—money to the audio their work, because sales are not great—and they book we are respecting the book “reading”, and the aren’t for the vast majority of books that are book use of people who don’t normally read or who published—it is vitally important for those writers to may not be able to read now because they are older be able to maximise whatever income they can from and their sight is not as good. That is a really whatever stream is available to them, including the important acknowledgement, I think, that we keep use of their work in libraries. book availability to everybody, not just— Barbara Hayes: I can only say the word absolutely to both comments that you’ve made there. Back in 2007, Q462 Dr Coffey: How do you know that to be true? the Authors’ Licensing and Collecting Society Stella Duffy: How do I know that to be true? commissioned some research into authors’ earnings, Dr Coffey: Because that’s a major statement. and I have a booklet here that obviously I can leave Stella Duffy: What, that people who use audio books with the Select Committee. It says: “The top 10% of tend to be older? authors earn more than 50% of the total income, while Dr Coffey: Yes. the bottom 50% earn less than 10% of the total Stella Duffy: My publishers say so, all the publishers income”. Certainly our experience in the Authors’ I know say so—I’m sure Louise’s publishers would Licensing and Collecting Society is that we have a lot say so—and the librarians say so. It is common sense, of writers who are not novelists. They are business isn’t it? writers, or medical writers—there is a whole breadth Dr Coffey: Not necessarily, no. of different types of writers—and they all rely on the Stella Duffy: Okay. I think it is. I think that all— secondary income from their works. Quite often this Dr Coffey: I’d agree with you about large print books. may be some time down the road. It might not be in Stella Duffy: No, but I can assure you from Lambeth the first year of publication; it could be eight or ten libraries anyway, who I do a lot of work with— years later. It could be once they have retired, and Chair: I would observe that—I may be exceptional— these cheques that come in are an absolute lifeline for that the great virtue of audio books is that I spend them. That covers both the secondary royalties that huge amounts of time in my car. we collect at ALCS as well as Public Lending Right. Stella Duffy: Yes, sure. David Cairns: But do you borrow them from Q465 Ms Bagshawe: Dr Coffey asked the question, libraries? If you buy them, there might be a difference “Is it a really important part of writers’ income or is between people who buy them and people who a bit of a pension?” I would say that I don’t really see borrow them from libraries. the distinction, because those writers who have Chair: That may be so. I buy them. worked for a long time and are no longer publishing, but who have established a corpus of work that is in Q463 Dr Coffey: Barbara Hayes, in your evidence our libraries and are receiving income on it, have you say that PLR forms an important part of every much a right to be paid and derive income from secondary rights income, and you refer to people who the ongoing use of their works, whether they continue are no longer in commercial circulation, but given the to publish or not. Would you agree with that? relatively low level of the PLR payout, are writers Barbara Hayes: That’s exactly right. It is a right. really reliant on it, or is it a bit of a pension? People should have the— Barbara Hayes: A little bit of both, I would suggest. Dr Coffey: Is that a leading question? Certainly when PLR was threatened with cuts—we Ms Bagshawe: It might be. I have declared my heard various rumours of 40%, 50% cuts and the interest. like—we spoke with the writers’ unions, the Society Barbara Hayes: As a writers’ organisation, what we of Authors, the Royal Society of Literature and are seeking to do is to make sure that our writers together we did a petition to go to, dare I say it, benefit as far as is reasonably possible under the Jeremy Hunt, and we had 4,775 writers sign up to it. schemes available to them to receive money for the It is very well thought of. We have a huge membership use and the reuse of their work. of about 80,000 writers, many of whom are registered Stella Duffy: Where we see writers’ rights in our for Public Lending Right. It is very well thought of, intellectual property and then our copyright going all and we are assured by these writers that, for many of over the place, across the board, not least with Google them, it forms a very substantial part of their income. basically taking our work and digitising it—which has now resulted in the Google Class Settlement Act—it’s Q464 Ms Bagshawe: Would you agree with me, really important that we acknowledge it is a right. Barbara, that authors have a right to be paid for their This is my work, your work, all of our work—anyone work, in whatever sense it’s written and whatever who has published in this room. Our work goes out format it is distributed? I do think it is important to there and if we don’t want people to pay to enter a go back to Jim’s point about public lending right being library, which I am sure none of us does, we need to a right. It’s true that I never chose to exercise my right allow those writers to be paid in some way. cobber Pack: U PL: COE1 [O] Processed: [28-03-2011 15:18] Job: 005777 Unit: PG06 Source: /MILES/PKU/INPUT/005777/005777_o006_kathy_HC 464-vi corrected.xml

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7 December 2010 Barbara Hayes, Richard Combes, Jim Parker and Stella Duffy

Ms Bagshawe: Yes. Richard: are you confident that ALCS can take on the role, and do you believe that you can deliver it at a Q466 Chair: It is a right, is it? saving to the taxpayer, even if it is only a small Stella Duffy: Yes. amount? Chair: Why then it is artificially capped at £6,600? Barbara Hayes: As Richard said earlier, clearly we Surely if your books are being borrowed, you should are already administering public lending right from be rewarded for every loan? overseas, so one would only assume from that there Ms Bagshawe: That is a very good question. It ought would be no issue of us continuing to work with PLR not to be capped. to keep the money coming into writers in the UK. Stella Duffy: Would you sign up if it wasn’t capped? With regard to cost savings, I think, in all fairness, Ms Bagshawe: Personally, I voluntarily do not claim when we originally did the four-year joint venture my PLR. As a matter of fact, I think the Chairman’s business plan, for want of better words, we were question is extremely relevant. Based on the fact that looking at costs then with regard to how we could PLR is a right, is it not somewhat contradictory then make savings between the two organisations. On for collecting societies on the one hand to be arguing communications, for instance, we could take over or that it is a right which ought to be exploited for our work together on that to reduce costs. So we believed work, and on the other saying that it is maximally that there would be cost savings over a given period capped? Is not Sophie Kinsella, for example, entitled of time. We were asked to submit a proposal to DCMS to receive all the income that she chooses, and might as to how we would work with PLR in partnership it not be better for collecting societies to offer going forward. We have not dug down into great bestselling authors a voluntary cap, but not to make it depths on costs, but there are synergies involved. mandatory, because that takes away their right to be Currently, whilst we have a headline rate of 9.5%, our paid for the exploitation of their work. Surely the commission rates over the last three years have been positions are inherently contradictory? 8%, 5% and then 8% again this year respectively. So Stella Duffy: There are a lot of those bestselling I think we would be pretty confident that we manage writers who put the money back in, famously, and costs as tightly as anybody. Richard, do you have quite often say so in public. anything to add? Ms Bagshawe: But surely that should be voluntary Richard Combes: As well as the costs point, I think on behalf of the people who own the copyright of the from the—if we could use the phrase—user end, the works that are being exploited in public libraries? writers, at the moment there are two systems running Why is the cap mandatory? in parallel, PLR and the money they get from ALCS. Stella Duffy: I don’t know. Part of the thinking behind the work we did with Jim on cost savings was also to make the whole process Q467 Chair: Who imposed the cap? Did you impose less complicated for the writers, because we hear often the cap or did the Government impose the cap? in Intellectual Property policy debates that the system Jim Parker: Chairman, perhaps I can help you. It’s appears to be inherently complicated and it is very always been part of the legislation and all I can say is difficult to navigate and understand. Part of our that Parliament felt it was fair in the early discussions. thinking, aside from where we could make economic It is perhaps difficult to picture now, but in the 1970s savings, was to make the system more user friendly, when Maureen Duffy and the authors were fighting with one payment from one organisation. That of itself for PLR—it took 30 years—it was quite a should lead to a position where the overheads are cut controversial piece of legislation and it was the tenth and the payment is larger, because, as Barbara said, bill that got through finally in 1979. So a lot of you are actually charging a lower administrative fee compromises, if I can describe them in that way, were built in and in the end it was a rough and ready on the payments. scheme. I wouldn’t claim it was any more than that. It is now part of European law, but there are rough Q469 Chair: So, although this wasn’t the original and ready aspects to it that most people seem to intention of the Government, the place we eventually accept, although they may seem slightly contradictory. arrive at might turn out to be better for authors? Dr Coffey: Do you think there will be more money Richard Combes: We would hope so. That is our available? I think libraries are not allowed to buy from hope. Amazon and similar to stock their shelves; they have Stella Duffy: As someone who has been an advocate to buy from publishers at full list price. Do you think for both ALCS and PLR with other writers, more money would be made available if they could encouraging writers to sign up for both, people often decide where and how they bought their books? ask, “Why are there two?” While they work brilliantly Jim Parker: I wasn’t aware that they couldn’t buy separately, if we are going to look at cost cutting, as from Amazon. I thought that they could. everyone is having to, that certainly seems like the Dr Coffey: I’d better check my facts, but I think they most sensible combination. are not allowed to. Jim Parker: I thought they could buy from anywhere, Q470 Chair: Just before we finish, as you know, our so you have me at a disadvantage, I’m afraid. inquiry has focused on the general question of funding for arts and heritage. Can I just ask you a couple of Q468 Chair: Can I just come back to the main broader questions? The first is about private question, which is the future of PLR? We have heard sponsorship. There is obviously quite a lot of from Jim and Stella, but can I just ask Barbara and sponsorship from the private sector in terms of prizes cobber Pack: U PL: COE1 [E] Processed: [28-03-2011 15:18] Job: 005777 Unit: PG06 Source: /MILES/PKU/INPUT/005777/005777_o006_kathy_HC 464-vi corrected.xml

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7 December 2010 Barbara Hayes, Richard Combes, Jim Parker and Stella Duffy and awards and so on. How important is that, do you a different mindset. We do need to be very careful of think, to the writing community? these small presses, because they are easily lost, and Stella Duffy: For prizes, absolutely. We had the Costa, they’re actually not even asking for huge amounts of we had the Orange, and we had the Whitbread which money. became the Costa. Every year I have done events at Barbara Hayes: Now there is also a request that they the Times Cheltenham Literary Festival. So that is go back each year and compete for the funding, and I happening. I think for individual writers, though, it’s think our concern here is that society as a whole will pretty difficult. We are very small compared to the lose out if some of these genres are reduced. bigger bodies. We are, by our nature, generally Stella Duffy: I’m published by Virago, who are individuals. It is like comparing fringe theatre with, owned by Little, Brown, who are owned by Hachette. you know, the National. The National can say, “We The big publishers are all owned by the big people. will rename the Cottesloe”, but a small fringe We are one of the few countries left in the world that company can’t say, “We’ll rename us” because no one have really exciting independent presses, and I started is going to buy into that. It just doesn’t work. with an independent press. I started with Serpent’s Perhaps companies like Improbable, who I work with, Tail. It is exactly the same as our great theatre and who are now directing at the Met, now have this practitioner, Stephen Daldry, starting at The Gate and opportunity, but certainly 10 years ago they wouldn’t now being internationally successful. We need to have. Fay Weldon did it with Bulgari, but then it was really protect those small ones, because otherwise it’s widely derided and even though the book was very all going to look the way the high street does already. good, she still was mocked for it. It is certainly The high street looks utterly homogeneous already possible in certain types of literature to name-check and we need to be very careful that our literature and do some product placement, but as an individual doesn’t go the same way. writer trying to go for those things, that is the hard part. The bigger organisations, absolutely. Most of the Q472 Ms Bagshawe: I have a couple of short major festivals are already doing it, as far as I can tell. questions on that. First of all, I think that this All of the major prizes are sponsored in some way. Committee has had many things to say about the Arts Council during the course of this inquiry, but would Q471 Chair: ALCS has expressed disappointment at you not agree that it is slightly unfair to tag the Arts Arts Council funding for literature. Would you like to Council with this one, because word “arts” has two say a little bit about any discussions you have had connotations in the first place: there’s the honorific, with them on that subject? under which literature falls, and there’s arts meaning Barbara Hayes: From our point of view we just the visual arts. I think we would all agree that when wanted to make a notation that some of the we think of the Arts Council, we primarily think of information that we obtained from the Arts Council the visual arts in their various forms. So it would shows that the funding that they give towards perhaps not be expected of the Arts Council to put literature is very minute. Our concern, which we great amounts of funding into literature. It is not probably had more at the time that it was bandied primarily what most people would see as its function. around that PLR might come under the Arts Council As a corollary though, I’m very worried to hear you heading, was about how little funding towards talk about the small literary presses, because as Stella literature the Arts Council gives, so there could says, poetry has always been one of this country’s potentially have been less of a focus for them on public lending right. The information that we have greatest strengths. It costs very little. I don’t know if from them with regard to the value of regular funding Bloodaxe are still going, but before I went to the dark by art form in the year 2010/11 is £6,028,016 for side, when I was 18, I was Young Poet of the Year, literature out of a total of £356,725,517. So you can and I initially wanted to be a poet until I discovered see percentage-wise it is actually quite small. So we that it was completely impossible to make a living at had some concerns. Also, with any shortfalls in it. Would it not be a very great shame if, for want of funding, we are very concerned about some of the a tiny amount of funding, which is all it would take, small presses that Stella spoke about earlier, which our poetry presses were not supported? They are not deal with poetry, short stories and translation. commercially viable. They are an art that needs Stella Duffy: Places like Comma Press, Salt Press, subsidy, and if the funding is not to come from the Arcadia, who do books in translation; the main Arts Council because it concentrates on the visual arts, commercial publishers don’t do that. There are very there is a need for Government to find a place whence few poetry publishers left in Britain and it’s what it can come, because otherwise we are going to lose we’re famous for—it’s what this country is known something which we could save for a minute for—and it is particularly hard for poets to make a investment in the overall scheme of arts and heritage. living. It is not at all surprising that most poets are Stella Duffy: Absolutely. I think the figures show that also teaching, but funding is not going to them from it’s like 28 or 30 individual small presses, and that is the Arts Council. If they do not keep the small all they are, but they are the only ones that are subsidies that those presses are getting at current publishing poetry in this country at all at the moment levels, not depreciating, these small presses are going on a regular basis. Yes, occasionally some of the to go under in the next five to 10 years, and that will larger presses will do an anthology, but not on a be a major loss for British literature. Across the board, regular basis, and they are not finding the new poets the Arts Council tends to perceive writers as either. By that we don’t always mean young, or people playwrights, not as writers in general, and it is really under 25. Sometimes a new poet may be in their 50s cobber Pack: U PL: COE1 [O] Processed: [28-03-2011 15:18] Job: 005777 Unit: PG06 Source: /MILES/PKU/INPUT/005777/005777_o006_kathy_HC 464-vi corrected.xml

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7 December 2010 Barbara Hayes, Richard Combes, Jim Parker and Stella Duffy or 60s. Some of the people in this room may end up like poems on the Tube, which have been incredibly becoming poets, but we need to support that vitally. popular. Is there not a case for you at ALCS, if you We are people who are making writing and art. It is take over PLR as a body for writers, to add to your not the Arts Council’s fault that they have function of collecting and distributing income, concentrated on these other things, but we need to lobbying on behalf of writers and lobbying for this support the Arts Council in supporting the small kind of subsidy to be directed to our poetry presses presses and reminding them that we are grateful for it. from the Arts Council and so on? Ms Bagshawe: I would only add that if you go in Barbara Hayes: ALCS very much have the writers’ and look at those few bookshops that do have poetry interests at heart and the lobbying that we have done sections, a good 95% of them are anthologies. in the past, which on many occasions has been to do Stella Duffy: Yes. with public lending right, there will be no reason to suggest that we wouldn’t have the writers’ interests at Q473 Ms Bagshawe: So it is incredibly difficult to heart, and these are areas that we could look at to find the Geoffrey Hills, the Seamus Heaneys, the Ted lobby further, yes. Hughes of the future, which this country has always Chair: I think that is all we have for you. Thank you been so brilliant in producing. We see some initiatives, very much. cobber Pack: U PL: COE1 [SE] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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Tuesday 25 January 2011

Members present: Mr John Whittingdale (Chair)

Ms Louise Bagshawe Philip Davies David Cairns Paul Farrelly Dr Therese Coffey Mr Adrian Sanders Damian Collins Mr Tom Watson ______

Examination of Witnesses

Witnesses: Dame Liz Forgan, Chair, Arts Council England, and Alan Davey, Chief Executive, Arts Council England, gave evidence.

Chair: Good morning. I am sorry to have kept you Q476 Philip Davies: Your 30% cut still leaves you waiting. This is, I suspect, the final session of the with funding levels that are above what you were Committee’s inquiry into Funding of the Arts and getting in 2005, and those figures had come on Heritage, and since quite a lot has happened since we substantial increases by the previous Government, so first took evidence from the Arts Council we thought it is hardly a nemesis situation, is it really? it only right to ask if you could come back and tell us Dame Liz Forgan: Arts Council funding has more, in the light of the decisions that you have now fluctuated a bit. Let me ask Alan to answer that. taken after the Comprehensive Spending Review. I’d Alan Davey: Perhaps I can just clarify that figure. You like to welcome back Alan Davey, the Chief said it leaves us with a funding figure from grant-in- Executive, and to welcome the Chairman, Dame Liz aid the same as 2005. In fact it’s 2002 in real terms. Forgan. Philip Davies is going to start. I think it’s important, as Liz was emphasising, there were two parts to our statement. Yes it will have a significant effect on the cultural life of this country Q474 Philip Davies: When the spending review because as we go forward we won’t be able to fund settlement was announced, the Arts Council said that all the organisations that we currently fund. However, these cuts would “have a significant impact on the we went on to say that it’s our job to make the cultural life of the country”. Can you explain why that reductions in the best, most informed and most is going to be the case? responsible way possible in order to keep the heart Dame Liz Forgan: Chairman, before I answer that and the core of the cultural life of this country—the question, can I just thank the Committee very much jewels, if you like, of this cultural renaissance that we for this opportunity to talk to you? I wasn’t able to be are currently living through—going. That’s behind our here when you saw Alan before, so I am very grateful 10-year plan. We’re not going to put up shutters in the for this. next four years; we’re not going to, as Liz said, cry We said that because I think any cut, any reduction in woe. We’re going to use the money we have in the public spending, has a serious impact on the life of best way we can, to make sure that culture in this the arts; it plays a very big part. We were also aware country thrives as much as it can in the next four that local government is undergoing recession at the years, and that we’re in a good position going same time, and we felt it right to be plain with the forwards for the rest of the next 10 years to make sure arts world that we were facing very tough challenges, that those real achievements that are internationally but that we were absolutely determined that the arts renowned in culture continue to go forward, and that would continue to flourish and be alright. But we culture continues to play an important role in the life didn’t want anyone to think that things were just going of this country. That’s our job, that’s our mission and to be exactly the same as they were before. We felt it that’s what we’re about at the moment. right to be plain speaking with them. Q477 Philip Davies: You talk about real terms. I always think that this “real terms” business is an Q475 Philip Davies: You say here today that the arts obsession of the public sector. In the private sector if will continue to flourish with the new spending you get more money than you had the previous year, settlement, and your original comment was that it you have more money. It’s the public sector who seem would have “a significant impact on the cultural life to have the “real terms” obsession that I certainly of the country”. Are those two things not— don’t recognise from when I was working in the Dame Liz Forgan: Mr Davies, you have just put your private sector. finger on the tightrope that we are walking. It is bound Setting that aside, you muse about why it was that the to have a significant effect—we’ve had a 30% cut in Arts Council seem to have got a particularly raw deal the budget and that can’t go without anyone noticing in terms of the spending settlement. Do you not take it—but we are absolutely clear that it is not our job to any responsibility for that? In your previous spread gloom and despondency. We’re here to make appearance, Tom Watson wiped the floor with you sure that the arts are supported and protected in the about all the different things where you had wasted best way we possibly can, and that is the balance that money on an industrial scale. Do you not think that we have to strike. the Arts Council has delivered this cut itself by some cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey of the shocking waste of money that Tom highlighted that we were not a well run organisation. I must tell last time? you that at no time did the Secretary of State ever say Dame Liz Forgan: Can I just start by saying I don’t that to me. On the contrary when he said to me, “I believe any of us have ever said we’ve had a worse want you to make the 50% cut” you’ve just referred deal than anyone else? The whole country is facing to, he said, “I know this is very tough, I know that severe economic problems, and the Government has a you have already, in this year before the spending clear plan for dealing with them. We have never said review, done sterling work on the costs of the Arts that we had a worse settlement than anybody else at Council. I know I’m asking you to do something very all. It is a serious cut in our budget and it makes a harsh, but I’m afraid that’s the terms of the settlement substantial difference to the way we can do our job, with Treasury and that’s that.” So no, I don’t think that but it is not our job to moan. I make the case, as Alan the settlement—which I think in the circumstances is does, privately with the Secretary of State and the fair and decent, though it’s tough for the arts—should Minister for the Arts, as toughly and robustly as we be seen as some kind of punishment for the Arts possibly can. He then makes the decision and then we Council failing in its duty, because I don’t think get on with it, frankly. that’s right. On the matter of waste, I hope that we will have time later today, or perhaps now, to talk in greater detail Q480 Philip Davies: But how confident are you that about the assault that we have made in the last two or you’re going to be able to do this 50% cut in three years on the running costs of the Arts Council. administration costs, given that you are claiming to be I think that if you look at them now you will find that so lean and efficient at the moment? they are competitive with any arts council in the Alan Davey: Clearly it’s going to be a challenge, and world, and indeed with many organisations in this it’s going to be a different kind of Arts Council going country who spend public money. forward. We have two years to work out how we’re going to do it. I have skilled, intelligent people Q478 Philip Davies: That was obviously an answer working in the Arts Council who are eager to get on but it wasn’t an answer to the question I asked, which with this and make this work. We want to be the best was do you not feel any responsibility for the fact organisation we can be; we’ll have 50% less to spend that what has gone on in the Arts Council in the past, on ourselves—okay, those are the parameters. You however far back in the past it is, has helped shape referred to the private sector earlier. In the private the decisions that the Government took about how sector you work with the resource you have, and that’s much to reduce your budget by? what we’re going to be doing. Alan Davey: If you look at the DCMS settlement Dame Liz Forgan: I don’t like to disagree with my overall, if you look at the settlement for the bodies Chief Executive in this circumstance, but I think I outside the national museums, which are directly need to add a little note of caution, because the Arts funded, the Arts Council has probably done best of all Council itself did. A 50% cut is not just a cut in the quangos that the DCMS funds. Sport England has shifting paper around. It’s a cut in the people who do done considerably worse and English Heritage, at a the things that the Arts Council does. That is to say cut of 34%, has done considerably worse, so I don’t talent spotting, the mentoring, the policing, the think we’ve been singled out at all. I think supporting, the shifting of ideas around the place, the Government does recognise, and has recognised and brokering of partnerships, all of that. We have has put on record the efforts we’ve been making over statutory responsibilities and we have responsibilities the last three years to address the way we run and to to the development of the arts and that takes human make sure that the way we run is the most efficient it resources. Now, there’s the deal: it’s 50%, and we said can be. We’ve taken out a fifth of our staff and we to Jeremy, “We will go away and that is our target,” believe we’ve actually improved the service to artists but we are having discussions with them about exactly and audiences in that time. I think we’re a better what the definitions consist of, so we’re absolutely organisation now. I think you can look at us as a clear what the numbers are. If that’s where we end up, public sector organisation and see that we are doing we’ll do it, but there are consequences to doing that. things well and we’re continuing to try to get better. That is our job—to use every penny of public money Q481 Philip Davies: Do you feel in a no-win that we spend on ourselves in the best way possible situation, because of course if you don’t hit your 50% and to maximise the amount that we’re spending on target, it will be, “Arts Council can’t cut its overheads the arts, as we’ve done in this current financial year, because it’s so bureaucratic,” and if you do hit your when we’ve transferred £6.5 million from 50% target, then people like me will say, “It just goes administrative costs into the arts. That’s there now. to prove how overstaffed they were in the first place It’s real. and what an absolute shambles they were.”? Do you feel between a rock and a hard place in that? Q479 Philip Davies: So based on that and how lean Dame Liz Forgan: I think that’s the permanent and efficient and marvellous you are, how confident situation of the Arts Council. There are other are you that you can make the 50% required cuts to compensations. your administration costs? Dame Liz Forgan: Can I just add to Alan’s answer? Q482 Dr Coffey: The way you have approached You’ve got under our skin by suggesting that the dishing out the cuts among all of your organisations settlement in the spending review was in some way has been a uniform cut thus far of 0.5% and 6.9%. related to the view that the Minister might have had Going forward, how do you anticipate making that cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey decision? I’ll give you a pretext: I guess in the last years, and a four-year set of priorities. Everybody 13 years, your funding increased by £274 million, or knows what we’re looking for. The rules are the same something like that—from £197 million to £450 for everybody. Of course it gets much more million—and hopefully you have been able to complicated than that, because judging an enormous, establish that your quality output has increased rather well established organisation in the middle of London than necessarily quantity. Moving forward, however, and a tiny, critical, new, unproven organisation in the I’m concerned that some of the well run organisations wilds of the country is difficult, but we’ve tried to put may be told, “You’ve been well run and you can dive in place as many reliable pieces of a framework as into this, that and the other and do the hard stuff, and possible, so that people can steer their way through we’ll keep some of the smaller organisations that the thickets in the same way that we are and know the perhaps have run into financial trouble afloat.” I’m a paths we’re taking. bit worried about the quality versus quantity angle. Dame Liz Forgan: I’m going to ask Alan to answer Q485 Dr Coffey: Just building on sources of that, but let me just say that, as a principle, we should funding, some of the Committee had the joy of going never punish success. There are other things that have to see the Arts Council Collection in Kennington and to be taken account of, but we have to keep our eye I think we enjoyed our visit. One thing that perhaps on that. But let Alan answer that. still didn’t get really answered was that currently the Alan Davey: I think the production of excellent art policy is to retain every single piece of art that you has to be the basis on which we make decisions. We buy, for ever, in perpetuity and I think there was a can talk about the good that the arts does in feeling among some of us there that perhaps that could communities and for the nation, but none of that good be looked at again. Not to have a systematic, “We is realised if excellent art isn’t happening, if the art must sell everything,” but perhaps a regular review of isn’t as good as it can be. We will have to come to a the collection, thus you’re creating working capital to balanced position around the country—a balance reinvest, and just some ideas on that. Have you been between large and small organisations, making sure considering other aspects of your spending policy in that reach still happens in parts of the country, looking that way? at parts of the country where there maybe aren’t Dame Liz Forgan: We are thinking about the physical organisations and making sure that, through collection a lot, and we’re thinking with the touring or digital means, we can get excellent art so Government collection and the British Council that people can experience and appreciate it. It’s going together, because clearly those are all part of the to be a balance. We closed our application process national patrimony, as it were, and so it’s sensible for yesterday morning at 10 o’clock. We are now us to talk with them. I’ll let Alan talk about it. assessing those applications in an intrinsic way, and Alan Davey: Another feature, with our new then, when we have that picture, we’ll look around responsibilities for museums in particular, is that we the whole country and moderate around the whole have to be mindful of collections policies more country, so we end up with something that fits together generally and being an exemplar of the best policies and that works, rewarding excellence, and that has to in that area. One of the things that we have been be at the heart of what we do. talking to the Arts Council Collection about is how we think it’s a very hardworking collection already— Q483 Dr Coffey: That’s very encouraging. You’ve around a third of its contents are out at any one time established, effectively, your funding formula and we’d like to get that up to about 50% if we can. approach for 2013 onwards? We’ve been discussing with them what the barriers Alan Davey: Yes, and I wouldn’t describe it as a are to that and I think you got the flavour of that in formula. I think there has to be judgment applied to your visit. Not many people actually know that they it, and that again is the job of the Arts Council. It’s a can borrow from the Arts Council Collection. There bit like three-dimensional chess: there are a large are only six members of staff, so we need to talk to number of factors that have to be brought to bear. them about how we can improve that performance. But we also need to keep these wider questions under Q484 Dr Coffey: Can you share some of the criteria? review as part of some wider work on collections You talk about excellence, but is regional weighting a policy in general. Our aim should be to get the key part of that? material out and about as much as possible and for it Dame Liz Forgan: It’s all in this charming little pink to be able to be used as a national resource book.1 I hope you have all seen copies of it. I show increasingly better. you that not for a frivolous reason. One of the important differences in the way we have gone about Q486 Dr Coffey: I think the curator suggested about the spending review is that we thought it absolutely 20% was out at any one time. essential that there should be an utterly clear artistic Alan Davey: It depends which time you take, because framework with clearly set out priorities, so that it’s variable. people would know the criteria we were intending to Dr Coffey: I agree with your ambition to get it to apply to our selection. After two years of consultation 50% and I think a number of us were very keen that with everybody under the sun, we published this we go back to our constituencies and advertise this. small, short little book and in it is contained the five Alan Davey: And we’re very grateful, and some goals that will govern our thinking for the next 10 addresses have been exchanged. 1 Achieving great art for everyone: A Strategic Framework for Dame Liz Forgan: In terms of collections, this may the Arts. Arts Council England, 4 November 2010, be a hostage to fortune, but I would bet a small cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey amount of money that the Arts Council Collection is particularly in a world where there are going to be among the hardest working collections in Europe at pressures on funding? this rate. Most museums cannot possibly keep that Dame Liz Forgan: I think that’s not out of the rate, and to me the measure of how well we’re using question, and if you look at the work that the the investment is how well it is being used and museums in general have been doing, thinking about enjoyed by people all around the country. That’s our this, they are thinking carefully around what the right key focus, I think. I don’t think we should have a rule reasons are for selling or not selling. What you don’t like a museum that we will never ever sell anything, want to do is invest money at the very early stages— it’s all inalienable, but it’s not bought to be sold. the Arts Council Collection does because it knows That’s a different kind of collection. contemporary artists; it buys very cleverly because it buys soon—and sell things when they are just Q487 Chair: It is the case, however, that nothing beginning to become familiar, but also it’s very ever has been sold? important that you never use a collection of that kind Dame Liz Forgan: I think that may be right. as a way of paying the rent. The museums are Alan Davey: Things have been de-accessioned in the tremendously worried about a de-accession policy that past. says, “Oh God, the roof has to be done. We’d better Dame Liz Forgan: That is the same thing, Alan. sell a painting.” That’s not the way to do it. If you Alan Davey: But money wasn’t exchanged. I’ll write want to keep a collection that is there for the purposes to you clarifying that. our collection is there for, the collection has to renew itself. I’m not excluding the idea that, in that context, Q488 Damian Collins: I would like to pick up we could, if we talk carefully with our colleagues, de- briefly on that point, because I was on that visit to the accession works, but it’s not going to be a revolving collection as well, which I think we greatly enjoyed fund. and we were very impressed by the professionalism of the team we saw there. I’d just like to push on this Q492 Damian Collins: I don’t think we were ever point on policy, because we were left with the very suggesting that you would sell in order to maintain clear impression that it was the policy never to sell the buildings but that you would sell as part of anything from the collection, and I think there is a managing a dynamic collection, just as many private danger it becomes a hoard rather than a collection if collectors routinely sell works within their collection that’s the case. Other art collectors will routinely to fund acquisitions. I think what we have not heard review their collection and sell works that they no is that—you say you are prepared to consider it, but longer place as much value on, in order to reinvest in we were told that that wasn’t being considered when the collection as a whole. we visited the collection. The people we saw at the Alan Davey: This is quite a hot potato in the museum collection were very clear about that, and it’s not and gallery world, where public collections something I have ever heard proactively suggested by traditionally do not sell from the collection. Very big the Arts Council at all. issues would be raised if the Arts Council Collection Dame Liz Forgan: I said we’re talking to the unilaterally went in that direction. As I said, there is Government Art Collection and the British Council. some wider work going on on collections policy, and We need to look at these collections together. A that’s one of the big issues that is in there. private collector collects for a different purpose from a public collection. It is not the same thing. This is Q489 Damian Collins: Wouldn’t you like to see the the nation investing in its young artists and in its Arts Council set the lead in this area? patrimony of art. The question is: is the public getting Alan Davey: I’d like to see the Arts Council the value it should from that investment? That, to me, Collection set the lead in many areas, but we need to is the question. That could be by increasing the use consider that in the round. that is made of it and it could be by thinking carefully about whether you de-accession works from time to Q490 Damian Collins: The purpose of the time. collection, we were told, is to support new and emerging artists. Is that still the case? Q493 Damian Collins: One final question. We did Dame Liz Forgan: That’s one of its purposes. The discuss, when we visited the collection, whether we other purpose, of course, is to enable the population could receive an indication of how many works of art who don’t happen to live right next door to an art have not been on public display for more than 10 gallery to have access to great works. years. Would it be possible for that information to be provided to us, perhaps in written form after this Q491 Damian Collins: I appreciate the second point, meeting? but on the first point, I’m not saying you should sell Alan Davey: Yes, I’m sure we could do that. your prize Francis Bacons or anything else, but there are probably items in the collection where you have a Q494 Ms Bagshawe: I was on that trip and I have number of paintings or works by that artist, so would one corollary question relating to this. You say that it not be better to sell some of those works, without you are talking to the national collection and one other diluting the quality or breadth of the collection, and major collection. It strikes me that those three use that money to fulfil the collection’s primary collections are very different, with different types of purpose of supporting new and emerging artists by public policy. Different works are held in them, works buying more works from new and emerging artists, of different value. I think there would be a certain cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey amount of public outcry if you were to sell off some dispositions in the collection, equally carefully of the Old Masters, Turners and so forth that are choosing which works to dispose of and why, so there hanging in Downing Street. By the nature of the Arts wouldn’t be a threat of very great loss to the national Council Collection, in that it is supporting new and collection? emerging artists, you do have art within your Dame Liz Forgan: I have said to you that I think it is ownership that is less well known, that is less not out of the question, but I do believe that when you expensive and so forth, and it is therefore unlike the are looking at a permanent collection, the appropriate other two. You seem to be tying it in to the other stance is a very conservative one in respect of sales. two collections, but uniquely among the three major This isn’t black and white. I hear the message, but the collections it’s younger, it’s more fluid, its individual responsibility to manage that collection is not just for works are of lower value. It therefore would seem to today, it’s for ever. That doesn’t mean every painting lend itself more to a fluid policy—a living collection for ever, but the collection for ever. The value of it policy, if you like—where something is disposed of doesn’t necessarily manifest itself now; it may be and something is acquired. much later. I don’t think I can go further with you As a subsidiary question for that, Dame Liz, you just except to say that I understand the point. We don’t said that there are different reasons that private rule it out, but I think that the policy stance needs to collectors acquire paintings versus public, but surely be you need to show cause why you’re selling. You we don’t need to be concerned with that. If you were need to be very sure and it needs to be for good to institute a policy of having a dynamic collection, reasons to do with the support of the collection. where some works are disposed of and other works are acquired, the public policy issue would be for you Q496 Mr Sanders: You mentioned the importance of to decide why you wish to dispose of the works, and investing in young artists. I wanted to ask a question it doesn’t really matter who wishes to acquire them. about the funding for Creativity, Culture and Once you have made the decision that it would be Education (CCE). Is your decision to cut that funding good to dispose of work A in order to invest in artist not at odds with your goal to improve arts B, it doesn’t matter if it is a private collector that buys opportunities for young people? it or not, does it? Alan Davey: It’s essentially a pragmatic decision, Dame Liz Forgan: Indeed that’s right. I only said that because the Government told us that funding for because Mr Collins raised that as a comparison. Creative Partnerships, which was ring-fenced and Turner was a young artist once. The collections are which is the main programme that CCE were engaged not the same, you’re quite right, but they’re not in, was no longer with us. It wasn’t part of their completely different either. It’s not as if the conversation with the Treasury. The number was Government Collection has all the Old Masters and reduced to zero and so we no longer had the money we’ve got weird bits of modern abstraction; it isn’t as in our baseline. Reluctantly—and Liz can expand on simple as that at all. this perhaps—Council took the decision that after this academic year, given that we were going to prioritise Q495 Ms Bagshawe: No, but you do have a quite a organisations who are producing art, we couldn’t lot of modern abstraction, I think it would be afford to fund the organisation as we have done in the reasonable to say. I must I was very impressed by my past. That’s not to say that we are abandoning children visit to the Arts Council Collection—I want to put that and young people; they are one of our five priorities. on record. It is a hardworking collection. We were told That’s important to us because children and young the budget and the very slim staff margins. I think people are the practitioners of tomorrow, the talent of that’s one of the things that the Arts Council does tomorrow. They’re also the audience of tomorrow and really well and is going to do better. I was overall it’s important that young people have contact with extremely impressed, especially by its forward- culture. thinking policy of lending to schools and lending to We have existing schemes such as Artsmark and Arts hospitals, and there’s a question about getting that Award. I’d urge you to look at the Arts Award scheme, funding out there. I really was unashamedly impressed which is kind of the Duke of Edinburgh’s Award for by the whole thing. That having been said, I just the arts, and there is some very high-quality work wonder if you are slightly too wedded to the idea of being done by young people there. We’re also going keeping hold of all of these works. It does seem to me to be looking at how we can, in our funding that the fluid nature of the collection might be better agreements with our funded organisations going served, and wouldn’t some of these works—some that forwards, make sure that their education work—and Damian referred to in his question that haven’t been there’s some really high-quality education work going shown for 10 years or more—be better served, by on with the London orchestras, for example, with disposing of them? Sage Gateshead, with the RSC (Royal Shakespeare We were told a little bit about the careful acquisitions Company) and others up and down the country— that are made with a low budget by your team at the continues; and that also, following the Henley review Arts Council and the strategic nature of the of music, that we’ve got the right kind of acquisitions; how they will try to work with one artist arrangements that link schools and cultural and use seed money—I think was the analogy we organisations out in the regions so that we can were given—in the form of a little bit of public money continue to ensure that young people are getting in order to gain private money and make careful access to culture. acquisitions. Isn’t there a case for saying that you I think, just reflecting on the Creative Partnerships could just as easily make careful and planned programme, it had many fine outcomes and we liked cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey it overall. It was probably more based toward Alan Davey: It was a programme developed in the creativity in the curriculum rather than cultural Arts Council, so we do think a lot of it, but the activity as such. What we need to do going forward is funding for it was removed, and reality means we to make sure that our money, where it’s spent, is about can’t fund it going forwards. cultural activity and not the wider interests of the education system. Given the way that schools funding Q503 Mr Watson: Okay, so it’s one of the tragedies is going, what we’re going to have to do is make sure of the cuts? that head teachers know the value of culture in schools Alan Davey: It’s one of the consequences of the and are willing to spend the money that they have in reduction to our funding. buying high-quality cultural activity for their pupils. Q504 Mr Watson: Can I take you to your Q497 Mr Sanders: How do you propose to do that? supplementary evidence to the Committee, Arts 232, Alan Davey: I referred to brokering—how we link just to tease you out on something. We asked you cultural organisations with schools, how we give whether you would publish the Moss Cooper reports. cultural organisations the ability to have the I’m sorry it’s not dated, but it’s entitled Supplementary conversations with schools and be able to say to them, written evidence submitted by Alan Davey, Chief “What’s on offer?” Executive, Arts Council, Arts 232, Select Committee follow up. On page 2, on the question of “Will you Q498 Mr Sanders: But isn’t the difficulty that publish the report on The Public”, in the first having cut Creativity, Culture and Education, you paragraph, last sentence, you end by saying, “Records have sent a very mixed message out to the other on this issue date back beyond five years and we organisations that work with young people? believe that retrieving them in order to identify Dame Liz Forgan: I think, as Alan said, we had really whether they contain any reports by Moss Cooper no alternative. It was ring-fenced funding. Their major would be at disproportionate cost.” Can I ask what is programme, most of it consisted of Creative your assessment of disproportionate cost in this case? Partnerships, and the funding disappeared. I’m Alan Davey: Can I come back to you on that? personally rather sorry about that because, although Dame Liz Forgan: Can I help a little bit? I was Alan is right to say that in some ways the direct fascinated by this question about Moss Cooper. I’m a benefit it delivered was an educational one, strictly Johnny-come-lately to the story of The Public— speaking, and not an artistic one, one of the things I somewhat to my relief, you won’t be surprised to liked about it was that it demonstrated so clearly how the arts can have a spectacular effect for the good in know. However, it’s a serious issue. From my all kinds of instrumental ways, for instance making understanding of it, Moss Cooper worked for the Arts children find it easier to learn in school. Council, and as an employee of the Arts Council clearly produced documents about this in the course of his work. There is nothing, as far as we can Q499 Mr Sanders: Didn’t it also have an economic benefit? ascertain, that should properly be called “the Moss Cooper Report”, in the sense that a report was Dame Liz Forgan: Certainly. I’m sorry we had to cut it. We have not given up on the idea of a partnership commissioned and delivered. Every Arts Council with the education world to work together to the employee of a senior kind will write documents in the benefit of children. That is hard because it needs course of their work, and I think that is what we are brokering across Government departments, which dealing with. We have, however, undertaken work of makes everything, as you know, harder than it ought our own on the lessons to be derived from The Public. to be. Our commitment to arts for children and young That will be published in the summer, when we are people is, as Alan says, one of our five goals. It is able to complete the retrospective work on The Public absolutely right up there at the top of our list. with work on the research project we are currently doing with capital projects. This is about how the Arts Q500 Mr Watson: To follow on from my colleague Council handles its capital projects and the lessons to from Torbay, PricewaterhouseCoopers claim that be learnt from The Public, which was not a Creative Partnerships generated 15 times the spectacular success, I think we should say. economic benefit in relation to the costs. Do you agree with that assessment? Q505 Mr Watson: What I’m trying to understand Dame Liz Forgan: Who am I to argue with and ascertain as a member of this Committee looking PricewaterhouseCoopers? These are never exact at the funding of the arts is the answer to that question. calculations, but I have no doubt it was very beneficial Dame Liz Forgan: Which question? in those terms. Mr Watson: How the Arts Council handles capital projects. What lessons can we learn and you learn as Q501 Mr Watson: Do you know of any other a result of that? funding for young people in the cultural sector that Dame Liz Forgan: Can I offer you— has that kind of metric of value? Dame Liz Forgan: Not one to 15 no. Q506 Mr Watson: Can I just continue my line of questioning? My understanding is that Moss Cooper Q502 Mr Watson: So you would agree that it is a was given a severance package from the Arts Council, very productive programme. and he wrote these reports, having subsequently been Dame Liz Forgan: If that’s right. hired as a consultant. Is that correct? cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey

Dame Liz Forgan: I’d have to ask Alan. I thought he Q515 Mr Watson: Just a point of clarity—forgive was employed on the staff. me if my cynicism is rising on this—if you actually Alan Davey: He was employed on the staff. I’m not discover any reports produced by Moss Cooper, could aware of the details of his severance package. I’d need we have them? to go and look that up. Dame Liz Forgan: This is perhaps speculation, but I imagine that the reason it was decided that the cost of Q507 Mr Watson: So, you can’t tell me what retrieving this would be disproportionate was, given disproportionate cost is—the assessment you make of that so far as we know, there was nothing called “the disproportionate cost? Moss Cooper Report”, what we would have to do is Alan Davey: I’d like to come back to you on the exact go back to the archive, take out all the documentation figure on that so as not to mislead you. ever produced by Arts Council staff during the time Mr Cooper was employed by us in some guise, and Q508 Mr Watson: Could you tell me what look through it all, because it’s not electronically assessment you made of what it would cost to retrieve classified, to find his signature on various documents. a number of reports by Moss Cooper? I don’t know That would be very expensive and difficult. how many he wrote; presumably it’s not in double figures? Is it two or three? Q516 Mr Watson: Wouldn’t it be better just to e- Alan Davey: We don’t know. mail him and ask him to give you a copy of the reports? Q509 Mr Watson: You don’t know how many Dame Liz Forgan: Yes. Now that we have a little reports he produced for you? more information about what we— Alan Davey: We cannot find a report called “the Moss Alan Davey: Now that I am clear about what you’re Cooper Report”, which is what you seem to be talking about, I will indeed e-mail him, or I’ll call referring to. However, can I just say that in the report someone else to e-mail him. that we’ve commissioned to investigate this, should there be Moss Cooper reports, I hope that these will Q517 Mr Watson: That is very gracious of you. emerge and that these will be covered in the report Thank you. Could I just ask one last question? Could that we publish. you explain why Diran Adebayo left as a trustee of the Arts Council early? Dame Liz Forgan: Q510 Mr Watson: Hold on. Moss Cooper was either Diran Adebayo is a writer—a young writer. He was on the Arts Council for some hired by you or employed by you to assess the years. We discovered in the summer of last year that effectiveness of this project. He produced updates for a grant had been paid to him as a writer and that the the board based on his many years of experience in systems had not thrown up the fact that he was also a the Arts Council, and you are telling me now, having member of Council and therefore a different process been asked on a Committee orally once and followed should have been gone through before he was eligible up in writing, that you don’t know what reports he for a grant. As soon as we discovered that we told the produced. Charity Commission; an investigation ensued. I had Alan Davey: We cannot find a report that could be hoped, and so had the Charity Commission, that Mr characterised as “the Moss Cooper Report”, which Adebayo would repay the grant voluntarily and you seem to be referring to. immediately. I think his personal circumstances were not easy, but anyway the outcome is that he has not. Q511 Mr Watson: Okay, semantics. Can you find We therefore have gone back to the Charity reports that Moss Cooper produced for the Arts Commission and said that in our view legal Council to do with The Public? proceedings should ensue, but we need their Alan Davey: There are no reports that you can label permission to do that. It was clearly unsuitable then a “Moss Cooper Report” that we’ve found. for him to continue as a member of Council and he resigned. Q512 Mr Watson: Did he produce reports? Mr Watson: Okay. Thank you. Alan Davey: I wasn’t there at the time. I cannot Dame Liz Forgan: I should say, we have now made accurately give you an answer to that question. sure that the automatic systems make it impossible for However the report that we have commissioned— such a thing to happen again.

Q513 Mr Watson: Well, what did you pay him for? Q518 Paul Farrelly: I want to come to your National You paid him, you commissioned—what was he— Portfolio funding programme, but just before I do that, Alan Davey: I was not there at the time. I was not the to round off the discussion about the impact on the one paying him. education budget, we have received some evidence from Nick Jones, who runs my local theatre, the New Q514 Mr Watson: Could you ask him whether he Victoria Theatre in Newcastle-under-Lyme, that sets was paid to produce reports for the Arts Council? out not only what they do on the education side but Alan Davey: We will investigate that further. You’ve also performing wider responsibilities over time, given me some more information now as to what the promoting social inclusion, doing things in nature of this report, or these reports, might be. I will partnership with the police, social services and youth take this further information that you have provided offenders, all of which work has value in bringing me with and ask the question further. drama to a much wider audience and for a much wider cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey purpose than simply having people sit on seats just Paul Farrelly: Has everybody who has been a watching a stage. We had some critics in of the Arts Regularly Funded Organisation (RFO) applied as part Council and in some part they were amusing and of the programme? provocative, but there was the view expressed that this Alan Davey: It looks like 20 haven’t and that might is not a proper role for arts funding. I would like an be for various reasons. answer: is education and getting involved in social projects a proper role for arts funding, or do those Q520 Paul Farrelly: So, you are 20 short. critics who say it is not have a rarefied and very Alan Davey: 20 people have chosen not to apply. narrow view, in your opinion? Dame Liz Forgan: I’m just catching my breath so that Q521 Paul Farrelly: How many more have applied? I don’t reply too vehemently to what you say. I believe Alan Davey: Approximately 1,340 have applied. passionately that the arts have the capacity to inspire, to educate and to have all manner of benefits for Q522 Paul Farrelly: So that is inclusive of your 800- young people, and indeed old people, under the guise odd RFOs? of education—that is to say, to build on an arts Alan Davey: Inclusive of 830 RFOs. experience and to take further that experience into their lives to enrich it in some way. I think for a time Q523 Paul Farrelly: So you have some tough there was a view that art should entirely occupy itself decisions to make with less funding in two months? with performance or the writing or whatever it was Alan Davey: Yes. and that the notion of the impact it had on an audience or individuals was immaterial, that what really Q524 Paul Farrelly: How are you going to do that? mattered was the artists’ sole right to express Alan Davey: The first part of the assessment is already themselves and that’s that. I don’t think that’s right underway. That is looking intrinsically at the and I don’t believe that today you would find a serious applications and scoring them. Then, as I said earlier, artist or a serious arts organisation that would begin we’ll look nationally and build the balanced portfolio to think that. of the arts around the country, necessarily exercising It’s not a matter of us hitting artists over the head and judgment and balancing things happening in one area saying, “You shall do education.” Artists’ eyes light against things happening in another area, and different up when they see that children are seizing what they organisations within art forms and across art forms. do and using it in their lives in some way that benefits It’s going to be very complicated. We have the skills them. It’s not an argument any more between pure art to do it; we have the people to do it; we know how and education. I think it’s a totally false distinction we are going to do it. We can do it in two months and and it’s certainly one that we’re not going to make. give people the decisions where, if they are currently Alan Davey: Just to add to that, I think for it to work Regularly Funded Organisations and there is some the art has to be at the heart of the activity and it has material change to their circumstances, they will have to be not about patronising children. Liz gave a speech 12 months to adopt that change, and also we’ll have saying, “Throw people into a bath of Wagner very 12 months with the organisations that we are funding early on.” Young people do respond to challenges and to discuss with them what the funding agreement will where these education projects really do work is be and what their relationship with us would be— where there is no slipping of standards, where there’s whether it’s a straightforward, “Here’s the money, get no talking down to people, where the art is really at on and produce art,” or, with some organisations, the heart of it. The good arts organisations around the “You’ve got a wider civic responsibility for your country who really get this are engaging with young sector and let’s talk about what that’s going to be.” people; they’re giving young people something in their lives that they might not have had before. As I Q525 Paul Farrelly: Any reasonable person might said earlier, they’re getting the audiences of tomorrow, suspect that this has increased your administrative but they’re also potentially finding the talent of burden at the time when you have been told to start tomorrow, and I think that’s why it’s important for chopping it in half. arts organisations. Dame Liz Forgan: There are those who say that we have made a rod for our own back by causing Q519 Paul Farrelly: I think it is an important everyone to apply for funding. We did that because question to ask and there are some very good we thought it was time we let some fresh air in on examples in the evidence that we have just received this. There was a view that if you were funded by the raising not fluffy subjects but hard subjects: using Arts Council, it was jolly nice because you basically drama to raise the issue of forced marriage, for stayed there for ever unless you did something awful, instance, that they laid out, and using holocaust drama and it was seen by some people as a little closed shop. to raise the issues among young people of the We thought that was wrong. importance of tackling prejudice and racism. It is good We also thought that it was time, given that we had to hear that answer to some of the criticism that has now published clear priorities, that we should ask been made. organisations to tell us how they intended to Moving on to the National Portfolio programme, your contribute to the realisation of those priorities. It applications closed yesterday, and you have set out would help us to decide how to balance our portfolio. your criteria in what looks like a red book from here, We published this extremely short form—the smallest but is a pink book— application form you have ever seen in your life, I bet Dame Liz Forgan: Salmon pink. you. It’s five pages long altogether, two of which are cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey mandatory from the Department for Culture. There are learned. The lessons learned were many. One was not 11 questions if you’re a Regularly Funded having proper, explicit criteria, not telling people Organisation, and 12 if you’re not; 12 boxes to tick if exactly what was going on, and not involving people you’re regularly funded, and 16 if you’re not. I don’t in the process of what was going on. I think we’ve think that’s a lot if you’re asking for upwards of learned that and I think we’ve applied that in this £75,000-worth of public money. process. So far the process has gone smoothly. Most We aim to get through this by having clear priorities, of the applications came in over the weekend. Our by training our staff—all the staff of the Arts Council help lines in Manchester were open all weekend to have been put through training so there’s consistency give people whatever advice or help they needed, and of decision making—and we’ve workshopped to be there in case anything went wrong. Fortunately organisations as to how to make their application work it didn’t, and the applications were in. as well as possible. So we now have a great number of applications to sort out in the next two months, and Q529 Paul Farrelly: I have two questions to finish it’s going to be very hard work. off this series. One of the criteria is financial Alan Davey: I think it’s something like the number sustainability. Have you given any indication or have we expected. We were expecting possibly 1,500, so I you adopted any benchmark of a percentage of outside think we’ve managed expectation in a reasonable way. funding—from non-public sources or non-Arts Council—that organisations will have to have, be it Q526 Paul Farrelly: But how are you managing 50% or 60%, to pass any hurdles internally? your administration at a time when all this is going Dame Liz Forgan: No, I don’t think that’s possible. on? You’re not simply pressing a button and saying, The range of organisations and the circumstances in “We’re going to give you what you had before, or which they find themselves are too different. When 99.5% of what you had before, or 93% of what you we say we want them to be financially sustainable, had before.” You’re having to assess all this at the many arts organisations will always need public time when you’re being asked to cut. subsidy. What we want are business plans that work, Alan Davey: The next round of cuts that we are being perhaps with a combination of public and private asked to make don’t come in this year, so this year we money, so that we start out knowing what they are have our current complement and we know how we going to do and how they are going to pay for it, and are going to use it, so we start to work out how we that we don’t get faced halfway through the year with, achieve 50% less after this process has gone forward. “Oh dear, we have just gone a million or two over This was a very deliberate conversation with the the budget.” Department saying, “When we get our settlement, we I think most of the arts sector, sometimes to the know we’re going to be cut administratively.” We surprise of people who don’t know it very well, is need this year to do a very big job changing the extremely well managed. When one of my landscape because we know we’re going to have less predecessors, Gerry Robinson, left the Arts Council I cash to play with, and that means we’re going to have remember him saying that he’d come thinking, “I to exercise judgment and be very careful about how must sort out these arty people,” and found, to his we make decisions, and that’s not a job that’s done by amazement, that the standard of management and formula or in an easy and light way. Therefore, we tightness of it in the arts sector was really very high. need the space to be able to get on with it. However, there are some organisations where the finance function does not match the artistic Q527 Paul Farrelly: But there will be another excellence, and I think that’s a pity, so we’re going to exercise to do in the future. try to help them. Alan Davey: Yes, there will, and we need to work out what that’s going to be. Q530 Paul Farrelly: That’s about being well run. My local authorities have been very supportive, but local Q528 Paul Farrelly: My local theatre supports this authorities across the country are in difficult times. process to open it all up, but believes that to meet the Alan Davey: May I just follow up? Although we can’t 15% broad target for arts funding on the front line, apply a percentage to the amount of money that some organisations are inevitably going to have to people get from other sources, we will be challenging have no funding whatsoever. and helping organisations over this period to improve. Alan Davey: Yes. We’ve been very clear with people One of our aims is to improve the performance of that some might get more; some might get the same; private fundraising in this period going forwards. So some might get less; some might get nothing. We’ve there will be help; there will also be challenge, but it had briefings with all our RFOs and with non-RFOs will be horses for courses, because some organisations who might seek to become RFOs, and in all our are at different stages in their development, and some conversations we’ve been very clear and honest with we’re going to have to offer some help to to improve people. their capability in that area. This process hasn’t just arisen out of the minds of Arts Council bureaucrats; it has been developed in Q531 Paul Farrelly: Final question: there are lots of conversations with the sector over the last two years. concerns in the regions because they don’t have the Remember, three years ago the Arts Council made headquarters of companies based there—in London— various decisions that were very controversial. That or the very wealthy individuals, who are drawn to was the week I started. I commissioned a report from London. There’s great concern about the London- Genista McIntosh saying what were the lessons centric focus of arts funding at the moment and the cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey consequence of cuts in the regions. Some people are strategic lottery funds available and these budgets will saying that this new programme, this great shake-up, be set in the new year. The great thing about this this breath of fresh air, is a once-in-a-generation application process, by the way, is it’s lottery-proof. opportunity to tackle the London-centric focus of If there are specific projects that might be suitable for funding. How do you respond to that? lottery funding, that can be taken forward in some Dame Liz Forgan: London is bound to be centric, in way. that sense—it’s the capital city; and many of the great Evidence from the past is that withdrawal of Arts arts institutions in London spread their benefit all over Council money doesn’t mean the deaths of the country. However, culture is something that organisations necessarily. Organisations regroup, they belongs to all of us, and it changes in different places. shrink back to a core, rethink their mission and end It’s not the same in different parts of the country, and up coming back in revivified way. Cheek by Jowl it’s really important that there should be cultural might be one very good example of that—they chose organisations all over the place, quite apart from the to leave our portfolio, and came back in a new revived practical business of making it within reach of people form later on. Some of the organisations that we to get to it. stopped funding in the last investment round are still One of the ways in which we will address that issue going, and some of them are applying for grants for is by being very careful when we balance the whole the arts and getting money from us in different ways. of the portfolio to make sure that we’ve got a sense So it’s hard to be straightforward about that. It will be of what is happening in different parts of the country variable and different across the country. and it isn’t all in one place. Also, we are working hard this time to encourage more and more creative Q535 Chair: You referred to the controversy that you partnerships between some of the big organisations, encountered in your first week a few years ago. By whether in London or elsewhere, and their smaller the sound of it, that is going to be a small squawk colleagues around the place, because big organisations compared to what is about to break around your head can act as centres of excellence, mentors and training if you say 600 “noes”. places. They can help in all kinds of ways, and we are working on a scheme, a practical way of encouraging Dame Liz Forgan: I think there’s no doubt that you those big organisations to mentor smaller ones in ways cannot take that sum of money out of the arts budget that I think will help that. without there going to be a hoo-hah, I have to say. We’re prepared for it, but what we have tried really hard to do is learn the lessons from that. When Alan Q532 Chair: You have received 1,340 applications, you said, which is about 60% more than your current said he commissioned a report, the whole organisation number of Regularly Funded Organisations. You was turned upside down as a result of that. The Arts previously said that you expected that the new Council took that extraordinarily seriously and every portfolio will be smaller than the current one, so that bit of the process has been changed as a result, so we means you are likely to refuse coming on for half of do pin some hope on the fact that we have had open the applications you have received. discussions; we have a clear roadmap; we have proper Alan Davey: Yes, that’s probably about right, training; we have put in place all the things that the mathematically. It’s hard to say, because there are McIntosh report said were absent on that last large applications and small applications. occasion. However, as I say, taking that amount of Chair: But it’s likely that something like 600 money out is not going to happen without— applications for funding are going to get a straight Alan Davey: We’ve made the process as transparent “no”. as possible; we’ve explained it all the way through. Alan Davey: We’ll probably end up funding 750, say, We will be explaining what we’re doing, and I hope so it’s a little bit more. that will in some ways mitigate, but Liz is right—yes, there will be a hoo-hah. If your money is cut, it’s a Q533 Chair: That’s about 600 “noes”, though, and 100% cut to you. you’ve said that you thought that could lead to the potential loss of more than 100 organisations. Do you Q536 Chair: So in 60 days you’re going to decide not think that figure may actually be higher? the future of a huge number of arts organisations. Alan Davey: The 100 was a kind of mathematical Some, possibly quite a lot, may close as a result of baseline. If you take 50% off the budget and take an that decision. average of what grant people get, that’s what it ends Alan Davey: They will have a year to take in the up at, but I’ve also said that if we’re to admit new news. If they are already regularly funded, they will people, that figure will be bigger, and that’s what have a year’s worth of funding that is already decided we’ve been talking about. and they will have a year in which to decide what their future is. As I said, some organisations have been Q534 Chair: You must anticipate that quite a lot of remarkably creative and resilient and have applied to the 600 organisations that you are going to give no other sources of funding and are still there. So I think money to will not survive? it’s probably overdramatic to say there will be that Alan Davey: It’s hard to say. Some of those 600 might number of organisations going to the wall. be people that we’ve not funded before, so there isn’t that relationship. We do have other funding Q537 Chair: Is there any reconsideration after mechanisms—grants for the arts particularly aimed at you’ve made your announcement? Can people appeal? smaller organisations—and we will have some Can they ask for further evidence? cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey

Dame Liz Forgan: No. That is to say, of course they that they didn’t know what types of programmes to can appeal—they can go for judicial review of the put on, they were unsure where their creative direction quality of our decisions, of course they can—but we should be going in relation to your funding, because have not built in a “Please come back and argue it he wasn’t sure whether he had to expand on his again” . There is a proper appeals mechanism if we existing audience or chase new audiences. don’t do our job properly, but the decision itself is not That complaint was reflected in the strong evidence up for discussion. We have to get on with it. that the Committee received in October from Danny Moar, Director of the Theatre Royal in Bath, who said Q538 Chair: The end of March; that’s it, as far as much the same sort of thing. If I could read you a little you’re concerned. Over a long period, there have been quote from Mr Moar. He said, “What I was struck by debates about very big, well known institutions like was the remorseless and obsessive preoccupation with the number of opera houses in London or the number what they would call ‘audience development’, which of orchestras in London. I assume that nothing is off basically means making people who aren’t the table as far as potential withdrawal of funding is fundamentally interested in the theatre come and see concerned. your show by any means possible. I think one of the Alan Davey: We’ve said that nothing is off the table. real problems with the funding system in this country I have to say, we have been having mature is that they find it very hard to accept that it’s okay conversations with the big organisations about what not to like the arts, it’s okay not to like the theatre” . they can do, what they themselves might offer, and Do you have any reaction to these charges from two we’ll see how that has been reflected in the separate sources? I know it is part of the Arts applications. Council’s remit to encourage audience development, but is there anything to the charge that the balance Q539 Chair: It’s not a question of equally spreading has been tipped too far, that you’re encouraging your the pain—there might be one or two very big organisations to search obsessively for new audiences, casualties? instead of encouraging those people that like the arts Alan Davey: No. That would be formulaic and I think and are the thriving staple audience of the arts to enjoy would produce distorted results. We have to exercise the arts more? judgment to use best the resources that we have. Dame Liz Forgan: I have a horrible feeling that there Dame Liz Forgan: That’s an important point. We did may be some justice in this, in the case of some a flat-rate cut in this year because there was no time individuals. I wouldn’t be surprised; but in policy to do anything else on the basis of any kind of rational terms, I think we do perfectly well understand that criteria. We had not published these criteria, and we there are people who don’t like the arts and never had to do it in a hurry, so we had a flat cut for the want it. That’s not what is worrying us. What worries transitional year, but we have always said that we us are people who we know would love the arts, who would not have equal pain for everybody. That is just would really enjoy it, who really would benefit from an abdication of responsibility on our part, I think. So it, if only—whatever the barriers are, whether it’s how we have to make judgments and then we have to live to get there or the look of the place or whatever it is. by them. We’re not interested in hitting people over the head and making them go to see Shakespeare. We’re Q540 Chair: Do you not think you are laying interested in not depriving people who would love it yourself open to the charge that you are not going to from having it. be able the job properly, given the length of time you One of the cuts in our own expenditure that we had have set yourself and the cut in administrative to make was that our next plan for audience budgets? development was specifically going to be aimed not Dame Liz Forgan: I have no doubt that some, at people who never go to the arts, but at people who particularly those who aren’t successful, will make consume the arts a very little bit to see if we couldn’t that charge. We have asked ourselves very seriously, encourage them to do it a little bit more. I’m sure “Can we do this job properly in that time?”. The that’s the sensible way to go. It’s not to try to persuade Secretary of State asked us, “Please, head for that the unwilling; it’s to make opportunity for people who date” . He was very anxious, quite understandably and really would love it, and then to just encourage those rightly, that organisations should have as much notice who’ve already started down the path to try something as possible. We agreed to the target date, but we did different and enhance their enjoyment. ask ourselves very seriously, “Can we do this As far as our clients are concerned, we have tried to properly?” and we believe we can. be clear. We have given them five priorities. We haven’t said “You must have this kind of audience or Q541 Ms Bagshawe: Looking at the way you that kind of audience.” The days of 75,000 boxes that currently fund some of your existing organisations and you had to tick have disappeared. some of your organisations in the regions, this Alan Davey: And they don’t have to do all five Committee took a trip to Manchester to see some of priorities. They choose what priorities they’re helping the Arts Council work out in the regions. We went to us fulfil. the very dynamic Cornerhouse Gallery—it’s Dame Liz Forgan: Sorry, Alan, this is very important. incredibly popular in the city there—and we were told Can I just finish it? One of our five targets is to see by its creative director that a complaint was made that more people enjoy the arts. How do we assess about the way the Arts Council directs its funding. that? In the application form it says, “If you choose The complaint that was brought to the Committee was that priority as one that you intend to fulfil for us, tell cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey us in your own words how you would like to do that” endless versions of Joseph and his Amazing . If he wants to say, “I’m going to go for old ladies,” Technicolor Dreamcoat being put on up and down the that’s fine; if he wants to say, “I’m going to go for country, or galleries full of watercolours of bowls of red-headed children,” that’s fine too. We might have fruit? to discuss it with him, but the emphasis is, “Please Dame Liz Forgan: That’s some great art you’ve just tell us how you want to run your organisation in a singled out there, but that is a very good question and way that it contributes to one of our goals,” and I we are well aware of it. We are very clearly saying to think that’s reasonable. people, “Do not come to us for money with a Alan Davey: I think, in the last two years, we’ve frightened, cowardly plan for the arts. We are here to changed the tone of our conversation with our funded encourage innovation and experiment. That is how bodies. One of the phrases that ran out of Jenny you get good marks from the Arts Council—not mad McIntosh’s report was a kind of parent-child things that the audience doesn’t want, but not relationship being implicitly understood in the mind recycling safe old stuff. You don’t need our money to of the Arts Council, in an abstract way, and I think do that” . That is a very clear understanding. As long we’ve been very explicit and clear in trying to get as people understand that’s where the money goes, over that and saying, “Actually, there’s a conversation that we will invest in that, because we really believe to be had here about what your artistic mission is and in it and it’s our stock in trade. That is a very powerful how that plays into the scene in the whole country argument for having private funding, otherwise you that we’re responsible for” . I think my evidence is could happily leave it all to the market. that around the country those more mature Alan Davey: We have that belief based on analysis of conversations are taking place, and I’m sorry if the history, as it were, because we can look back at Cornerhouse were thinking that it’s not. Going previous times when there might have been periodic forwards, it’s going to be a different kind of reductions in funding, where organisations perhaps conversation, and I think in most cases it already is. retreated to what they thought was safe, and audience interest declined and decline set in; there was a cycle. Q542 Ms Bagshawe: That’s a fair and encouraging A few years later it took an awful lot of extra response. It strikes me that you as an organisation are money—an injection of extra money—to get things bound by your second goal, which is to get more back on a more interesting and adventurous basis. I people to come and enjoy the arts, so you have to think we’ve taken those lessons from history, and the include that. best way of getting through these next four years Alan Davey: It’s in our charter. where we have a reduction of funding is to make sure the art is still interesting. Q543 Ms Bagshawe: Yes, it’s in your charter. It’s clearly a goal for the Arts Council; it has to be Q545 David Cairns: Interesting is a very objective addressed. But I do have sympathy for the guys at the measurement. How do you measure success and sharp end, if you like, who are running galleries, who failure? I suppose it goes to what Louise Bagshawe are running regional theatres and who, in an ideal was talking about in terms of how you can’t just world, know who loves the art that they produce and measure it by expansion of audience as opposed to would like to concentrate a bit more on getting those size of audience. We had a similar discussion with the people in to see their art more often, organically Film Council in terms of backing winners and losers, widening that pool, instead of looking for new and and I suppose in that sense it’s more obvious: you just exciting audiences that never come to see it. look at box office receipts and maybe awards at the Dame Liz Forgan: We’d just like to hold their feet a awards season. How do you measure success and little bit to the fire to make sure that they use their failure? Somebody may produce a brilliant, imagination and their energy to do what they can to innovative, challenging thing, and nobody goes to see enlarge that audience. Most of them we don’t have it. Is that a failure? What are the criteria when you to tell. examine the impact of your grant after the work has Alan Davey: We are seeking to help them, giving been accomplished? How do you satisfy yourselves them resources to understand their potential audiences that this was a good award or actually, in retrospect, more, but then it’s up to them to do it, to use it, to you probably shouldn’t have done it? mine their database, maybe to co-operate with the arts Dame Liz Forgan: One measure will be how it fulfils organisation of a different kind next door and combine its commitment to contribute to the five goals, but in and look at audiences. It’s up to them how they do it. terms of what you were saying, clearly we have to Increasingly, going forwards, we’ll be helping people perm a number of different ingredients. Audience size by providing the tools for them to understand their is a relevant consideration. The sheer adventurousness audiences more—and the good ones do. of the art—it may be a disaster—may be something else. Alan has put in place a system that is not new to Q544 David Cairns: One of the justifications for the Arts Council, but it’s new in the way that he has public funding for the arts is that it encourages introduced it, to help us to reach valuations of very experimentation and innovation and allows artists and hard-to-value work—a system of peer review by creative people to fail, which is really often the only which other artists regularly over time— way you ever get progress. With the reduced funding, Alan Davey: And members of the public. how do we ensure that we don’t see a move to what Dame Liz Forgan:—and members of the public, form may be more obviously commercially viable or a view about the quality of the art. There’s a number successful work? How are we going to avoid seeing of different ingredients in the decision. cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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Q546 David Cairns: I appreciate that these are valuable to the public in the sense that it is an subjective, but is it theoretically possible for investment in the creativity of this country, which is somebody to produce a work of art with our not only a resource for us in terms of our psychology, taxpayers’ financial assistance that absolutely nobody our social cohesion and our pleasure and happiness, goes to see and absolutely nobody likes but that you but it’s an economic resource and it’s something that would deem to be a success? is very important in the profile and identity of the Dame Liz Forgan: I bet you there’s some artists at nation as it’s seen abroad. All of that is public value. this very moment planning, “How can I make a work of art, like Schrödinger’s cat, that nobody can ever Q550 David Cairns: May I just ask one last see?” question? You mentioned earlier on, Dame Liz, that Alan Davey: I’m not aware of any, because there’s you didn’t think the application process was usually some interest in something— disproportionate, given the amount of public money that was involved, and I think clearly everybody Q547 Mr Watson: May I suggest a gallery: The believes that where public money is being handed out Public, West Bromwich? there should be a very robust application process. We Alan Davey: A hundred thousand visitors, last year. had the same discussion when we had the Heritage Dame Liz Forgan: Mr Watson, I’ve been in that Lottery Fund in, which was if you’re reducing your gallery. It’s full of appreciative people. personnel, given that it might not take longer for your Alan Davey: Antony Gormley’s Field will be coming people to process a big application than a small from the Arts Council Collection. application for money, there would be a tendency to Dame Liz Forgan: Even more people. be looking for the larger bids because you can process one bid for £500,000 quicker than 11 bids for £50,000. Q548 David Cairns: In terms of percentage, if you It’s a two-part question. How do you ensure that you have a budget that is so big and you expect that some don’t have an institutional bias towards doing things of it will fail by whatever criteria you apply to it— that are administratively simpler for you? That’s and by definition, it is more likely to be the more question 1. Question 1.1 is: how do you ensure that experimental stuff, the perhaps more innovative, more the outreach, which takes time of working with groups extreme stuff—if you’re still encouraging that but out there doesn’t go because it might not bear fruit and with a much reduced budget, it could be argued that you’re under the cosh in terms of your own budget? the percentage of the budget that “fails” is going to be Dame Liz Forgan: One way is to hope very much much greater. that our legislators and those who hold us to account Dame Liz Forgan: It’s balances, balances. That is a understand those calculations, and that simply to look very literal interpretation—a mathematical view of it. at a cost per grant, irrespective of the size and nature Clearly, that is a risk. I think that one of the ways that of the grant, is only a fraction of the story and it’s not we are going to emerge from these four years in as a true measure. We have to all understand, with some good a shape as we possibly can is that we take a long sophistication, how those measurements are applied. view, that we invest in talent that may take a year or two to come to fruition. But also it is a matter of policy for us that we have Shakespeare is a bad example, because we clearly large and small, that we do not simply retreat to a need to keep investing in it, but the great established redoubt of safe, well established, easy-to-run artists and arts institutions, they need our money to organisations. keep their programmes going, but nothing terrible will Alan Davey: We can protect our grants for the arts happen to them if they have a cut to their budget of a programme, and indeed probably enhance its manageable size, and we are having sensible possibility for small grants and for smaller conversations with them about that. But if you don’t organisations to get grants from it going forwards, and offer that opportunity to a young generation of artists that will be properly announced in March. to try and experiment and do their early work, then At the same time, we’ve spent the last two years you’re going to lose a generation. The seedcorn won’t streamlining our processes. We’ve centralised things be planted, and that’s something that we really do in Manchester, but maintained a kind of personal worry about. service for those who are seeking the grants. The telephone helpline in Manchester sort of guides people Q549 David Cairns: But is there a sense that what through the process and is quite an important part in constitutes public value for public investment in a making people realise what’s possible for them in time of rapidly expanding budgets is different from terms of where funding might come from. Going what constitutes public value in a time of rapidly forwards, particularly in spotting talent or spotting contracting budgets; or do you just sail on irrespective innovation, we might have to look at getting our of whether a budget is increasing or not? funded bodies that we are funding with some of the Dame Liz Forgan: I don’t really think so. Public bigger grants to help us do that spotting and be that value resides in the ability to go to the National frontline intelligence and feed into us much more. I Theatre and see a brilliant production of Troilus and think that whatever we look like going forwards, we Cressida, and it also consists of being able to go to are going to be more permeable. We’re going to have Derby and see the Arts Council Collection on view more contact with the outside and more exchange of there, curated by a bunch of old people. It also ideas with the outside. We’ve been doing that in the consists of being able to go to some weird place in last two years as we’ve been getting smaller, and I Hoxton and see lights going on and off. All of it is think that continues. cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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Q551 Dr Coffey: Just putting together some of the that. When they set up earlier—and it was an Arts answers you have given recently about future funding Council set-up—they were pioneers. A lot has and elements of success or failure, clearly judgment changed since then, and when we came to look at is a big part of that, and I accept that there is no the new funding settlement, the question of value for precise formula. When we went to Manchester, we money was at the very forefront of everything we did. had a discussion with some organisations. I’ve also We invested £4 million a year in Arts & Business, spoken to some of mine—Aldeburgh Music, Eastern which essentially covered their core costs, and the Angles, High Tide and others—and there’s certainly a question for us was: can we spend that money better different view. The strong view from Manchester in this philanthropic endeavour, or private giving, as I seemed to be that so much depends on your officer, like to call it, endeavour? and if they’re a music specialist then, frankly, other First, the fact is that now there are a number of bits get a bit of a look in but not a lot. I won’t name organisations with expertise in this area. Secondly, we the organisation, because I wouldn’t want to be think it really important that we lodge that specific accused of favouritism in any way, but they were expertise with more arts organisations within their saying, to give praise where praise is due, that in the own organisations. Some of the big ones are brilliant last few years, especially since Alan came in, it has at it, but not all. What we intend to do is move to a been a night and day change and the quality of model where the Arts Council internally takes a more assessment seems to have improved; however, it’s still direct, strategic role, and that we commission work in the eye of the beholder. Are you doing some peer from a number of providers, including Arts & reviews? I recognise that you don’t want a judicial Business—they are very welcome to bid for us—that review—well, you may have a judicial review, but we think that we would get better value for money there’s no appeal—but how are you satisfying from our investment in giving generation that way. yourselves that the quality will be across the board? Somebody like Andrea knows the East of England Q553 Chair: Do you think that in recent years, but, again, it’s still very subjective. Arts & Business were not really delivering for the Dame Liz Forgan: Alan has done a lot of work on amount of money you were putting into them? this, so I think he should answer that question. Dame Liz Forgan: I don’t want to talk them down, Alan Davey: When we did the investment process last but I think we are not alone in the sector in thinking time, one of the criticisms post hoc was that it looked that there could be more productive ways of investing like 10 different investment processes: a national one that money. and nine regional ones. I’ve slimmed my executive board in half; I don’t have regional barons any more. Q554 Chair: Is it your expectation that they will We’re all contributing to a national picture, and we’re continue as an organisation, looking for presumably exchanging thoughts on assessment and thoughts on private funding, or that, essentially, what they do will policy and what we’re doing nationally all the time. be taken over by you and by other institutions? So there are colleges of expertise around the country Dame Liz Forgan: Oh no. I expect that they will now, say in music, and the person who has the continue as an organisation and bid to us for packages expertise in music in the East will be having contact of work, because they do have very clear expertise. with the person in the South West or the West Alan Davey: We have given them £2 million for the Midlands or whatever. There’s much more exchange next financial year, and that’s specifically for them to of ideas. work out what their future might be. In addition, Liz mentioned that we’ve got the artistic assessment mechanism in play now. It’s coming to its Q555 Chair: So that is to give them an opportunity second year. It will get better as it matures, but what’s to look for funding from elsewhere? coming out of that is a tremendous kind of intelligence Alan Davey: It gives them a breathing space, which I from real experts and challenges to us about what the hope they’ll use. nature of the arts in this country really is. There are conversations and real exchanges of real intelligence Q556 David Cairns: Just very quickly on that: happening all the time. I think you’re right to point you’ve made a calculation that you can use this £4 out the challenge there, and the fact that it is difficult million more productively. What’s your assessment of for us to do, but I think we are tackling it. how much the £4 million brings in at the moment as a multiplier, and what’s your target? It must Q552 Chair: Can I turn to philanthropy, which presumably be higher than the target that Arts & obviously Government has attached great importance Business are bringing in, so what are the figures? to, potentially to make up some of the loss in grant? Alan Davey: It’s very difficult to have a correlation Can you explain to us your thinking on why you between the money that, as Liz said, goes into the core decided to cut all funding for Arts & Business from costs of Arts & Business and what the total position is 2012? on philanthropic giving. There’s not much cause and Dame Liz Forgan: All right, I’ll do that. It is a key effect, because what Arts & Business are— priority of the Secretary of State. Alan was at a meeting with him this morning—he has regular Q557 David Cairns: But how can you be confident meetings with him about it; he wrote a paper for him. that you’re going to do better then, if you haven’t got We take it very seriously; the whole of the arts sector a baseline figure to measure it against? takes it very seriously. The climate has totally and Alan Davey: I think what we have to do is make sure utterly changed. Arts & Business was a pioneer in our money works as hard as it can, and we do have cobber Pack: U PL: COE1 [E] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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25 January 2011 Dame Liz Forgan and Alan Davey some cause and effect, and that is what that Q563 Chair: In your report, you also talked about commissioning relationship will be in the future. tax incentives. Do you think there is any likelihood of that happening in the foreseeable future? Q558 David Cairns: I’m sorry, but it was stated Alan Davey: Tax is a matter for the Chancellor. As I relatively unambiguously that you thought you could say, I’ve just been to a meeting with Jeremy Hunt this use that £4 million better as part of the private giving morning and I’m involved in briefing the Department endeavour, and I’m assuming that’s not just a hunch, on what might be desirable. I think it’s something that that that’s based upon some— we have to keep pushing away at. Dame Liz Forgan: There is now a competitive market Chair: A lot of things are desirable. in people with this expertise, and we thought it right that we should test that market. Arts & Business has Q564 Paul Farrelly: Can I just ask you, on this been the sole provider of this to us for a very long score, do you think the honours system might be time, and we thought it right that we should test the tweaked or thoroughly overhauled to try to help this market. objective of encouraging more philanthropic giving? Dame Liz Forgan: Absolutely. I’ve always thought Q559 David Cairns: They might have an expectation that. I think the honours system is an absolutely that you would at least have had some kind of baseline brilliant way of saying “well done” to people. It costs measurement as to what you thought their value was the nation nothing; people value it a lot. I can’t see in order that you then could test this market, rather why it is not more widely used. than just say, “Well, we think the market’s moved on since they began. We’re not going to do it”. Q565 Paul Farrelly: How should it be tweaked? Let Alan Davey: One of our problems has been that we’ve me give you an example. I don’t know the arts field; not been able to properly do that, and it’s not really I know the sports field. I know there is a committee been possible to chart that cause and effect. We want that decides that “One knighthood will be given to to look forwards and be able to chart cause and effect this sport,” or “You’ll have to argue among yourselves with what we’re putting in and what we’re getting out, about this sport,” and it would be one knighthood and that could involve Arts & Business going only. What’s the position in the arts, and how could it forwards, as we said, but we need more clarity going be improved? forwards. What is clear is we don’t have clarity at Dame Liz Forgan: I don’t think there’s a tariff. the moment. Perhaps there is, but I don’t know it if there is. Alan Davey: I don’t think there is. Q560 Chair: Do you see the Arts Council itself Ms Bagshawe: Yes, there is. taking on some of the functions that Arts & Business Alan Davey: I think we just have to get more used have carried out to date? to putting people forward, because quite often people Alan Davey: It’s possible, but I think it would be more aren’t nominated for philanthropic work because like intelligent commissioning would be the main people don’t think of it like that. They think of other capability that we would have, but we are working it ways of putting people forward. Also, beyond the out at the moment. We’ve talked in the endowments honours system there needs to be more recognition of report about possible challenge funds, funded from donors on a more day-to-day or on an exceptional lottery, and we’re talking to the sector at the moment basis by senior politicians—by the Prime Minister, for about how those funds—it has been characterised as example—so that we celebrate where people are a fund but it actually will be funds of different kinds— giving, in particular in the regions where there are might work to improve the capability of organisations, some really good examples of individual or corporate particularly small organisations, in the regions, to philanthropy, but it’s patchier than the London provide some straightforward challenge funding and concentration. We mustn’t just think it’s all London. maybe some more ambitious funding around endowments or building reserves. That’s all being Q566 Paul Farrelly: Dame Liz, you’re along my discussed at the moment. lines of thinking here. As a recipient of an honour— and you were very energetic in your response—could Q561 Chair: But in things like the endowments and you give us some examples of how the honours the matched funding suggestion that you have come system might be tweaked or overhauled? forward with, do you think that it is possible that Dame Liz Forgan: I understand the Queen is not Arts & Business might be involved in that? prepared to have any more honours, so we are not Alan Davey: It’s entirely possible, and we’ve been having a new philanthropic honour, but I see no talking to them about how they might, because there reason why the entire honours system shouldn’t will be schemes. It won’t just be one scheme, so there honour donors. Donations to political parties, as we will be various aspects of it. all know, bring their problems, but donations to the cultural life of the nation, it seems to me, ought to Q562 Chair: So this may not be the end of Arts be clearly recognised in the honours system, without Council funding of Arts & Business; it’s just going to anyone pretending that there is something peculiar be done on a more open and competitive basis? about giving somebody an honour because they have Alan Davey: It will be on a different basis—a contributed a large sum of money to the public benefit. commissioning, contractual model. It’s fine by me. cobber Pack: U PL: COE1 [O] Processed: [02-03-2011 13:06] Job: 005777 Unit: PG07 Source: /MILES/PKU/INPUT/005777/005777_o007_kathy_HC 464-vii corrected.xml

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Q567 Paul Farrelly: A bigger share or higher up the including us, is undergoing recession and there isn’t pecking order, particularly in the regions? any money to do it with. I think that’s very difficult, Dame Liz Forgan: As I say, I don’t know enough and we have to be careful. We have to manage about the arcane systems of allocating numbers, but I expectations about what we really can do. think there should be more recognition. If there is to The funding for the Renaissance in the Regions be more philanthropy, I think that should clearly be programme has been not entirely but largely protected. reflected in the honours system. The funding that comes through us for libraries is minute—I am only just coming to grips with libraries, Q568 Paul Farrelly: One final question: the US, but it does seem to me that the disposition of the which is often held out as a model, doesn’t have an responsibility for libraries is weird. There’s a statutory honours system. Should the honours system be responsibility in the Department, then it’s all devolved abolished? Should we be encouraging more different with a legal responsibility to local government. We ways of social appreciation? have a small sum of money, about £3 million, to do Dame Liz Forgan: These are deep waters. Patrons in something with the libraries. We clearly can’t run America sometimes extract a return for their libraries on that basis. We can only do something to investment, which is much more problematic than try to enhance the value and the activity that happens giving somebody an honour. I think it is an absolutely with the libraries. It may be that we can achieve some decent, straight transaction. If somebody contributes a economies by bringing the physical buildings—arts lot of their own wealth to the cultural life of their centres and libraries—more together. I don’t know. fellow citizens, they should be rewarded for that We haven’t started on that yet—we have to finish the without any kind of double dealing or underhand spending review first—but it is a huge new level of worrying about it. It’s a straightforward transaction responsibility. It’s flattering that we should be asked and an honourable one, I think. to do it. We’re under no illusion that we don’t have the expertise at the moment to do it with. Q569 Mr Watson: To follow on from that briefly, Alan Davey: There will be an announcement about Chair, I think for the first time I probably speak for funding for Renaissance and various bodies that are the whole of the Committee when I say you should currently funded by MLA for the next financial year arrange for the choir mistress of the Hallé Orchestra in early February, probably. We will then give you a Youth Choir to have an honour. She is a magnificent kind of roadmap as to how we are going to engage servant of the arts, in my view. with the sectors to define what our role is going to be, Dame Liz Forgan: Write that down, Alan, and be very clear about that and not overpromise. immediately. We’re not the MLA. The MLA has admin resources of £13 million. We have £3 million and a bit Q570 Mr Watson: Just on the Manchester trip, I transferred to us, so it is going to be different, it’s think I need to give a different recollection of my time going to be focused. It links back to your last point with the creative director of the Cornerhouse. He about regional offices, because we’ve got this regional gently rebuked me, by the way, for the pugnacious presence that we regard as really valuable. When way that I conducted my inquiries at the last session we’re having conversations with local government in we had together. He said there was a danger with the particular, being able to talk about museums and reform—that to him the embodiments of the Arts libraries at the same time is going to be really Council were the people he dealt with regionally, and valuable. That’s the first time that local government there was a danger that if you were centralising again have been able to have that single conversation, and they would lose a relationship where people that will be useful. understood the cultural nuances of Manchester and the area that he represented. You’ve probably articulated Q571 Mr Watson: I’m going to be pretty robust with an argument this morning that says you are trying to you again, because my view is I think you’re carrying guard against that and you understand that threat. I the can. What I think is happening is that you have thought his position was slightly more nuanced. guys like me who have seen a huge increase in the To hold your feet against the fire a little bit longer, arts, because we’ve been pushing for it for many Dame Liz, and to extract some energy and years, and in certain circumstances, like The Public in imagination from you, can I talk to you about your West Bromwich, you’ve dealt with it incompetently new inheritances? You’ve just taken on the MLA. and now you’re trying to cover it up. I want to get to Given the enormity of the cuts that you have to the truth, and that’s putting pressure from one side. implement, you’ve clearly been reforming the All cultural politics is party political as well. Then corporate governance of the organisation, I would say you’ve got guys like my colleagues in the for the better, in the last few years. Do you really have Conservatives who think that the Arts Council the capacity to take on the huge expectations that shouldn’t exist and think that the market and come from inheriting the functions of the MLA right philanthropy should provide for the arts. And what now? you have is a Government that realises it can’t sustain Dame Liz Forgan: We have asked ourselves that that argument; they will be destroyed by the 40,000 question in exactly those terms, but we’re good people who work for the cultural sector if they do soldiers. The fact is that there is a wonderful vision that. So you’re carrying the can. You’re beleaguered of a whole approach to culture that takes in libraries, because people like me have been battering you; they museums and the arts. It’s very hard, I think, to realise don’t want you to exist. You can’t win, can you? 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25 January 2011 Dame Liz Forgan and Alan Davey gone in the bonfire of the quangos, and you’re not as we’re concerned I will have private conversations going to be able to handle running it. with the Secretary State if I think he’s doing Dr Coffey: Mr Chairman, I think it’s a little unfair of something awful. In public, I will support what he Mr Watson to say that the Conservatives don’t want does and I will do it to the best of my ability. That is, the Arts Council to exist. I think, the only way that you can operate an Mr Watson: I’m playing devil’s advocate, but organisation like ours. We are all carrying the can for basically you’re carrying the can for this bonfire of recession. Everybody in the country is having a hard the quangos, aren’t you? time of it. It’s not going to be easy for us to take on Dame Liz Forgan: I have to say I don’t share your the job of museums and libraries, but we will just have characterisation of the national view of the arts. There to do the best we can, and we will. may be people in every political party who have Alan Davey: We do believe there’s a good job we can particular views about it, but the country as a whole, do. Also could I just reassure you we will not be as it has demonstrated in a number of ways, is very covering up matters to do with The Public? much in favour of having the arts looked after and properly supported. If I may say so, I think that you Q572 Mr Watson: So I can get my Moss Cooper have just made it clear how important it is that the reports? Arts Council exists at arm’s length from all political Alan Davey: You have clarified what you mean by parties and attempts to understand the priorities of that. each of them, particularly when they’re in Mr Watson: All right. End of session, thank you. government. Chair: I think that is the end of the session. Thank We’re a democratic institution. The Government has you very much, both of you. the right to have its priorities attended to, and as far Dame Liz Forgan: Thank you very much. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [SO] PPSysB Job: 005777 Unit: PAG1

Culture, Media and Sport Committee: Evidence Ev 127 Written evidence

Written evidence submitted by the National Campaign for the Arts (NCA) (arts 33) 1. Introduction 1.1 The National Campaign for the Arts (NCA) is the UK’s only independent campaigning organisation representing all the arts. It provides a voice for the arts world in all its diversity and seeks to safeguard, promote and develop the arts and win public and political recognition for the importance of the arts as a key element in our national culture. 1.2 The NCA is a membership organisation. To ensure its independence, the NCA does not receive any public subsidy; membership subscriptions provide the core funding to enable it to carry out its vital remit. The NCA represents some 550 organisations and individuals across the UK, ranging from small and medium enterprises to the major, national institutions, umbrella bodies, trade associations and unions. This response has been informed by input from our members. 1.3 The NCA believes that the arts and culture make an important contribution to people’s lives, their communities, their education and to the economy. Through the Manifesto for the Arts1 published in June 2009 and through briefings for politicians and the press, the NCA has acted as a voice for the arts sector, identifying administrative, practical, and financial issues affecting the arts and working with Government and the sector to find solutions to problems. 1.4 The NCA welcomes the opportunity to inform the Culture, Media and Sport Select Committee’s inquiry, to report on progress made to date and to highlight areas of outstanding concern. The NCA has previously raised concerns with the Committee about deep and swift cuts to the sector. This response has been compiled in order to draw the Committee’s attention to the impact of cuts on the artistic and cultural life of the United Kingdom. We would also welcome the opportunity to provide additional oral evidence to the committee in due course. As the representative organisation of arts sector organisations working the UK we believe we could provide a valuable perspective on the issues covered by this inquiry.

2. Impact of Cuts 2.1 The UK’s arts funding model is mixed and formed of funding from central and local government, earned income and private funding (via trusts and foundations and philanthropy). According to figures from Arts and Business, public funding makes up just over half of the art sector’s income, one third of income is self-generated through box office and other earned income while the contribution made by the private sector accounts for one sixth. 2.2 To understand the impact of cuts it is important to understand the difference in reliance on public funding by art forms and organisations. Some art forms are simply more resource-heavy and costly to produce than others, such as opera or ballet for example. For others, such as museums, fixed costs such as care for collections and building costs cannot be magically spirited away. Public funding forms a vital part of the equation when seeking to raise sponsorship money for exhibitions which are costly to mount and insure, let alone securing the necessary levels of funding to maintain free entry. Most of the larger, national arts organisations and museums have adept and efficient marketing and fundraising functions which secure greater levels of earned income and philanthropy. In many cases, the “aspirational” ratio of 30-30-30 to public, earned and private income is surpassed by organisations such as the Royal Opera House and Tate, whose ratio of earned and private income far exceeds their public income. 2.3 The picture is different again for smaller and regional arts organisations, and those community organisations working to deliver to local and community objectives. For reasons of size, location or remit, these organisations are much more reliant on public funding and particularly on local government funding. It is not always as easy for these organisations to augment their income through private donations or business sponsorship. 2.4 Arts Council England (ACE) has already had a 5% in-year cut to its grant-in-aid budget, reducing its original 2010–11 budget by £23 million—from £468 million to £445 million. DCMS’ share of the Government’s in-year reduction was 4.1% or £88 million. As a result, all ACE Regularly Funded Organisations (RFOs) received a 0.5%2 cut, except Arts and Business and Culture Creativity and Education who bore cuts of 4%. 2.5 Arts Council has now been asked to model a 25–30% cut across four years (along with other DCMS funded bodies). 30% would amount to a £134 million cut in ACE’s grant-in-aid budget.3 (Applying the blunt principle of reducing the number of RFOs by 30% would equate to the loss of over 200 arts organisations.)

1 A copy of the NCA’s Manifesto for the Arts, produced last June following lengthy and open consultations with the arts sector, is available for download here: http://bit.ly/bpO4RP 2 ACE was able to reduce the immediate impact on the sector due to use of its historic reserves. If this had not been possible, the sector would have been subject to cuts of nearer 3%. 3 Arts Council, Why the Arts Matter http://www.artscouncil.org.uk/about-us/why-arts-matter/ Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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2.6 These cuts are likely to effect smaller, regional organisations more severely.Arts Council has indicated that it will apply cuts equally across the board in the first year, seeing this as the fairest approach to administering cuts in what is expected to be a very short timescale to plan. However, “equal pain” inevitably ends up having an inequitable effect. Some organisations may be fatally damaged, limp on but end up having to fold. This means ACE would have lost the value of its investment in that organisation over that year. ACE is caught between wanting to operate a fair and transparent system, while recognising that some of its investment could end up wasted. 2.7 The NCA is also concerned about cuts at the local level. Museums and galleries for example, are less reliant on subsidy from ACE, and more so on financial support received from their local authorities. Local authorities have flexibility over discretionary budgets and so the impact on arts and cultural expenditure will vary from council, but their budgets are even more vulnerable as all local authorities will be cut by 25%. The Spending Review will need to address the impacts of these cuts to the sector too. 2.8 Despite the economic challenges, some our members have experienced increased popularity and continued success. In 2008–09 there was an increase in attendance at RFOs of 17% and a 9.2% increase in RFOs rated “strong” or “outstanding” in artistic quality.4 NESTA has calculated that with Government support, a 4% annual growth rate can be achieved in the coming years by the creative industries, double the rate of the rest of the economy, and by 2013 the creative sectors are expected to employ more people than the financial sector.5 Cuts foreseen in the Comprehensive Spending Review will prematurely halt this growth across the creative industries. 2.9 In addition to the detrimental impact such cuts would have on local economies, we believe Britain’s current ranking of fourth out of 50 countries in terms of culture and art6 would also be compromised by such changes. The Prime Minister’s recent pledge at the Serpentine Gallery on 12 August to make Britain one of the top five tourist destinations in the world is a timely reminder of the role arts and culture will play in this realising this goal. Moreover, as talent nurtured in theatres and music venues continue to win Oscars, Grammys and other awards of international standing, the UK’s reputation as a centre of excellence will also continue to grow. 2.10 While the arts sector accepts that some cuts are inevitable and understandable in the current climate, deep cuts over a long period would result in the loss of many organisations and a reduction in the ability of the public to see or take part in the arts. It will be the loss of opportunities to the public that will have the most damaging long-term effects.

3. Collaboration Across the Sector to Reduce Reduplication of Effort 3.1 There are already many instances of collaboration in the sector. For example, Sound and Music7 was created from the merger of four contemporary music organisations. The initiative was apparently started by looking at 12–15 different small organisations, of which four eventually merged. Admin savings were marginal because the organisations already had very basic admin structures, but the merger led to an improved infrastructure for the new organisation as well as investment of £1.2 million from Arts Council’s “Thrive” programme, some of which went towards providing reserves. 3.2 Examples of collaborative working include NewcastleGateshead Cultural Venues, a group of the 10 major building based organisations in the conurbation. Gains include: — Digital—more efficient and effective platforms eg through recommendation engines, Social media protocols, Intranets, web visibility, mobile platforms. — Facilities Management—savings through buying waste recycling, disposal contracts, electricity and other overheads collectively. — Human Resources—creating a network with larger organisations providing HR support to smaller organisations where their only resort previously would have been lawyers. — Finance—buying audit or merchant services collectively or individually, sharing practice, looking at developing trends and opportunities eg changing banks because the rates are better, charitable discount for train travel, etc. 3.4 The NCA would like to stress that for many of our members, especially theatres and opera houses, a large proportion of overall cost is due to production, which cannot be squeezed or shared because of the organisation-specific nature of productions. 3.5 For some arts organisations, particularly those working to deliver specific outcomes such as health, social welfare or criminal justice, collaboration with organisations outside the arts sector might prove more fruitful. 3.6 Savings are possible through mergers or collaboration. They are, however, dependent on the strategic and cultural fit of the organisations. Much hangs on the purpose and remit of the organisations and their constitutions and it is important to stress that collaboration or mergers are not always efficient, effective or

4 Arts Council England Annual Report 2010. 5 NESTA report on Creative Industries, 2009. 6 Nation Brand Index, 2009. 7 See: http://soundandmusic.org/about Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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desirable. Forcing organisations together solely to fit a cost-saving agenda is unlikely to bear fruit in the long run. There are also costs in joining together (such as redundancies) and these should be weighed against the gains. It is salutary to note that when the five Scottish national companies were charged with examining areas of collaboration, the only area they found where this could work was in HR and that involved losing just one post.

4. Necessary Level of Public Subsidy 4.1 The UK arts sector thrives because of its mixed funding model. It is neither solely dependent on state aid nor on private giving for its success and as such is a slave to none. For every £1 that the Arts Council invests, an average additional £2 is generated from private and commercial sources, totalling £3 income. At a local level investment can lever five times its worth.8 This is crucial if we are to have a vibrant cultural sector. The “arm’s length” principle delivers artistic independence from the state and state funding ensures that no one wealthy individual can threaten controversial and challenging works with closure by removing their financial backing. Government has a vital role in continuing to support and encourage—and indeed to protect its investment—in this sector. 4.2 As stated in section 2 above, reliance on public funding also varies across art forms and across the sector; while some smaller, more regional organisations such as community based arts projects are almost 100% reliant on public funding, larger, national arts organisations are much less so. It is therefore difficult to determine exactly how much public funding is required. However, we do know that the increase in grant- in-aid, revenue funding made available to arts organisations over the last few years has been instrumental in stabilising and strengthening the sector and the rewards from this in the public’s experience of the arts and the UK’s global reputation have been clear.

5. Current Funding Structure 5.1 The NCA supports the existence and remit of Arts Council England on the grounds that public funding for the arts should be distributed by a body operating at arm’s length from the Government, whose responsibility it is to ensure that the funding available supports artistic work of the highest possible quality and makes this accessible to the public. The NCA recognises that ACE is responsible for making strategic funding decisions and supports its right to do so independently. 5.2 One of the key functions of a national, strategic body is to ensure that there is adequate provision of venues and art forms across the country to ensure people have good access to the arts. This requires a national perspective supplemented by good, on-the-ground knowledge of provision and needs in the regions. While there may be ways of delivering efficiencies within a national/regional structure, it will be important to ensure good local knowledge is communicated effectively up the chain and national and central initiatives communicated regionally to ensure decisions are made on the best possible evidence. 5.3 Local government is the second most important funder of the arts, contributing approximately £220.5 million in 2009–10 in England and Wales. The degree to which local authority arts services provide support and facilities varies according to the value (actual and potential) that they ascribe to the impact of the arts on local communities. As funding from local authorities is discretionary, each local council or regional authority will have its own system of grant funding. Cultural budgets vary enormously. 5.4 At least 10% of all authorities in England and Wales have lost their arts services since 2000. The withdrawal of local authority support and funding for the arts is expected to worsen, as spending cuts are likely to fall heaviest on non-statutory services such as culture and leisure. Many arts organisations are co- funded by ACE and the local authority. In this, ACE plays a vital role in “shoring up” a local authority’s commitment to the arts. The NCA believes that the DCMS should also play a greater part in supporting arts at the local level by highlighting the economic and social benefits that arts and culture bring to local places, or by providing incentives or good reasons for local authorities to retain funding. 5.5 The NCA would like to see more flexibility in funding mechanisms. Currently, arts organisations are either regularly funded or they are not. The difference between the two states is absolute, although non- RFOs do have greater access to lottery funds. We know that Arts Council is looking to develop different funding streams which will allow for a greater flexibility in the portfolio. We support this and wait to see further detail. 5.6 We would also like to see more flexibility in the duration of funding agreements. A three year funding cycle is too short for many organisations who have to plan and commit to programmes and expenditure even though there is not always the guarantee that their funding will be secure. For some, it may make sense for funding agreements to be extended to five or even 10 years, although long-term or continuous funding should never be seen as an organisation’s right. 5.7 In light of expected spending cuts and changes to the apportionment of National Lottery Shares, the ratio of grant-in-aid to lottery-funding available to ACE to distribute is expected to change from roughly 85:25 to nearer 60:40. This change will have implications on what ACE is able to fund and how, given that different rules apply to lottery funding.

8 ACE Toolkit, Why the Arts Mattter: http://www.artscouncil.org.uk/about-us/why-arts-matter/ Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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6. Impact of Recent Changes to National Lottery Shares on Arts and Heritage Organisations 6.1 The diversion of funds from the lottery to the Olympics had a significant, detrimental impact on existing grant funds. The Arts Council England Grants for the Arts fund fell from £83 million in 2006–07 to £54 million in 2007–08, a reduction of 35 percent. This had a dramatic effect on the sector and caused a hiatus in the development of artists and arts projects. 6.2 The NCA welcomes the Department for Culture, Media and Sport’s commitment to restore the shares of the National Lottery Distribution Fund to 20% for each of the good causes of sport, heritage and the arts. This would benefit the arts by 4%. The proposed changes would see an increase in the apportionment of shares to 18% on 1 April 2011, rising to 20% on 1 April 2012. This stepped change would be bearable if any potential cuts to the grant-in-aid budget were not front-loaded. If deeper cuts are made early in the funding cycle, then there is a case for accelerating the increase. 6.3 Lottery funding provides the arts with the ability to reach out beyond their core functions and audiences through projects that have a wider community and societal benefit. Increasing the arts lottery share will ensure that more of these activities can take place. 6.4 The NCA is keen to ensure that the increase in lottery shares is not used as a reason to lower public funding to the arts in future. The principle of additionality must remain, whereby the money provided from the lottery is not seen as a substitute for but a supplement to existing Government spending.

7. Whether Lottery Policy Guidlelines need to be Reviewed 7.1 It is important to reiterate the distinction between the type of work supported by core grant-in-aid funding and that supported by Lottery funding which complies with different rules. We believe the current policy guidelines are adequate and do not need to be reviewed.

8. Impact of Recent Changes to DCMS Arms’Length Bodies 8.1 The NCA would like to draw the Committee’s attention to the significant structural changes that ACE has twice undergone in recent years. These have been the result of efficiency drives among DCMS’ arm’s length bodies. The cuts announced by DCMS and the emphasis on making savings through ACE’s operational budget will force ACE to look inwards once again instead of concentrating its resources on developing the sector. 8.2 These cuts and restructuring exercises now call for a serious and fundamental review of what type of organisation and funding body Arts Council England should be. At present, the expectation seems to be that ACE must simply continue to do all that it does, and more, with much less. This is clearly an insupportable expectation. Arts Council has started exploring this issue and asking these questions of the sector in its consultation on its 10 year strategy, which is due to be published later in the autumn. The NCA has responded that ACE should do much more in partnership with other organisations and potentially contract out or delegate work to other organisations that may be better placed, or better networked, to deliver. 8.3 The NCA believes however, that equal thought also needs to be given to DCMS’ own role and remit. It has been some years since the creation of the Department and in that time (as far as we are aware) there has been no serious attempt to address the arms’ length principle and to identify those areas of policy or practice that should remain strictly within the purlieu of ministers and those that should sit in an arm’s length body. 8.4 This becomes even more urgent with the decision taken by ministers earlier this year to abolish the Museums, Libraries and Archives Council and the UK Film Council. For example, many of the MLA’s essential and core functions will need to continue. The NCA suggests that it would make sense for the Department to absorb the responsibility and remit for key statutory functions such as the Government Indemnity Scheme, Acceptance in Lieu and the Reviewing Committee on the Export of Works of Art, while other functions such as improving the standards and efficiencies of museums, libraries or archives could more sensibly be delegated to other agencies. 8.5 We would also like to raise member concerns that in addition to distributing funds, the MLA and Film Council also provided specialist knowledge to practitioners and artists in their field of work. We would therefore like assurances from the DCMS that these functions and support networks will be made available elsewhere. 8.6 This inevitably places Arts Council England in the frontline for potentially assuming more, and wider, responsibilities from both the MLA and UKFC. If this is to be the case, much greater clarity on roles, purpose and objectives needs to be defined, as well as clearer demarcation of remit and responsibility between the department and its agencies. 8.7 The assumption of any additional responsibilities or functions inevitably brings resource implications and requirements. These must be fairly and carefully apportioned to ensure good and effective governance. It will be important to ensure that available Government funds are properly managed especially as DCMS and ACE face their own cuts and staff capacity is reduced Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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9. The Role of Philantrhopy 9.1 Philanthropy plays a key role in civil society; it makes the link between the private individual and the public realm. Private giving to the arts, culture and heritage can encourage risk and innovation as it is not constrained by state guidelines. As quoted in the document Private Giving for the Public Good, (of which NCA was a contributor and a signatory) “there are 68 billionaires living in Britain and a hundred new millionaires are being created every day”. Nonetheless, “since 1992 charitable giving has actually fallen by 25% as a percentage of GDP.”9 9.2 The NCA believes more could and should be done to encourage more private giving into the arts, by the sector and by Government, and we welcome the Minister’s intention to explore this more fully. Nevertheless, we caution against over reliance on the private sector as the panacea to replace government spending. 9.3 We contend that donors—individuals and business alike—want to place their investment in a “sound bet”. They want their funding to provide the “icing on the cake” rather than the raw ingredients. Private money tends to follow public funding; it is that element which helps to underscore the confidence in an organisation. Cuts to public funds, therefore, will not necessarily lead to a boost in private giving but could have the opposite effect. 9.4 Many museums and galleries across the UK, including our major national museums, are increasingly reliant on private funding to purchase key acquisitions. Even so, the ability of UK institutions to outbid their rivals from the US or Europe is ever diminishing, with the result that many UK works of art or items of historical value are lost to the nation. 9.5 The NCA further believes that over-reliance on philanthropy runs the risk of marginalising organisations not based in London or other major cities. Of all the money that is donated to culture 65% goes to organisations in London. Scotland only receives 7%, Wales 3%, with the remaining 24% spread among the English regions.10 It is significantly easier for larger and metropolitan organisations to attract funding of private donors. When looking to increase philanthropy, it will be important to recognise the real and significant difficulties faced by smaller, less well-known organisations. 9.6 Finally, it is important to note that while both business and individuals can play a role in arts funding, historically in Britain this funding has been subject to changing interests and priorities of business and individuals. Experience of sponsorship is that it requires a high level of servicing in order to ensure the desired outcome for both business and the arts organisation, so it brings significant costs as well as benefits, again making it only possible and realistic for larger organisations to pursue.

10. Tax Incentives 10.1 Individual giving is a significant and vital source of private income for the arts in the UK but in order to attract this funding it is necessary for tax concessions to be created and made more generous. 10.2 The NCA supports Gift Aid and particularly the retention of the current higher rate tax benefit but the system could be made simpler for organisations to claim. Our own member research showed that a significant proportion of organisations eligible to claim gift aid had not done so because of “operational or administrative” reasons11 underlining claims that the system is burdensome. 10.3 There is further aspect to Gift Aid and also Payroll Giving Schemes, which is that while some arts organisations are charities, not all are. Many are non-profit companies for which charity status would either not be appropriate or again, administratively burdensome. As legislation currently stands, only registered charities are able to take advantage of the above measures. The NCA would like to explore initiatives that may allow organisations such as these to benefit from Government incentives to private donors. 10.4 The ability to make lifetime legacies with appropriate tax reliefs would be the single most significant breakthrough. The Acceptance in Lieu scheme provides a model, whereby it would be possible to apply the same principles but to living donors. 10.5 A corporation tax system that promotes start-ups, innovative and high-growth businesses will also be important for the future success of the arts sector.

11. Conclusions 11.1 Less than 0.1% of the total Treasury Budget is spent on the arts. The current level of funding for the arts costs 17p a week per person.12 In return we have world-class arts and artists, a sector that gives Britain an international edge as an exciting and creative place to live, work and do business, and the largest cultural economy in the world related to GDP.

9 Private giving for the Public Good published 2008. 10 Arts and Business Private Investment in Culture Survey 2006–07. 11 NCA Private Giving survey, June 2008. 12 ACE Toolkit, Why the Arts Matter: http://www.artscouncil.org.uk/about-us/why-arts-matter/ Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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11.2 The impact of cuts to the sector will obviously depend on the speed and depth with which they are executed. As we have stated above, the arts sector is not expecting to escape cuts, however the NCA is clear that the health of the sector rests on a fragile “ecology”. Large and front-loaded cuts could result in a swift spiral of decline in the sector—not only in audiences, quality and talent, but also in the impact on our creativity as a nation and on Britain’s world standing. September 2010

Written evidence submitted by the National Trust (arts 48) Summary of Main Points — The arts and heritage sectors operate through a mixed economy. — Private sector support is vital, but market failure means that Government also has an important role in maximising the benefits that derive from a healthy cultural sector. — The historic environment has suffered real-terms reductions in Government subsidy over the last decade. All public sector bodies have a role to play in tackling the deficit, but to disproportionately penalise the historic environment further is likely to lead to increased costs in the future. — We fully support the Government’s proposal to restore the original shares apportioned to the Lottery good causes, including the arts and heritage, and the Government’s recognition of the importance of the additionality principle. — Attention needs to be paid to the transfer of some crucial functions within the Museums Libraries and Archives Council, once that body ceases to operate after April 2012. — Care should also be taken over the possibility of merging the Heritage Lottery Fund into English Heritage. There are some good reasons why the two bodies currently operate independently of one another. — More might be done by Government to improve the conditions in which fundraising for arts and heritage takes place. This might be done by making the administration of Gift Aid simpler and more efficient, improving the conditions for lifetime giving, and removing the restrictions imposed on public sector bodies through the end-year flexibility rules.

Introduction 1. The National Trust is one of Europe’s largest conservation charities, with 3.8 million members and an annual turnover of around £400 million. Our pay-for-entry sites attract over 17 million visits each year and comprise over 300 historic properties and a collection of 2.5 million separate items, much of it of highly significant historic and artistic value. Our experience and the scale of our operations may therefore bring a unique perspective to bear on the issues that the Committee have declared an interest in exploring.

Funding Questions: What impact recent, and future, spending cuts from central and local Government will have on the arts and heritage at a national and local level? What level of public subsidy for the arts and heritage is necessary and sustainable? Whether the current system, and structure, of funding distribution is the right one? 2. The arts and heritage sectors operate through a mixed economy. Much activity is driven by the contributions of private individuals—paying for tickets or admission, becoming members, donating fundraising contributions, buying goods and services, or, in the case of heritage and the historic environment, owning and caring for the assets themselves. This private sector approach to funding arts and heritage is to some degree exemplified by the National Trust’s own business model. Nearly a third (31%) of our income derives from the subscriptions of our members, with the rest of our income coming from legacies (16%), enterprises (14%), investments (9%), rents (9%), catering operations (8%), admission fees (4%) and fundraising appeals (3%).13 Just 6% of our total income is attributed to grants provided by the public sector and others, although of course we also benefit greatly from the tax advantages that come with our charitable status. 3. Taking a broader perspective, however, it is widely accepted that the health of the arts and heritage sectors depends on public subsidy of one sort or another. This is because of the market failures that are present within these sectors, given the “public good” characteristics of the services that they provide. At the

13 National Trust Annual Report. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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same time, heritage and the arts provide significant economic and social benefits: heritage tourism is said to be worth over £20 billion a year to the UK economy.14 Such “externalities” are also evidence of market failure, since Government intervention is required to ensure that their full value is realised.

4. Where market failure can be demonstrated, a measure of ongoing public sector support can be justified in the interests of maximising the overall level of benefits to society. Conversely if this support is withdrawn, and service provision is left solely to the commercial sector, there will inevitably be a diminution in the overall level and quality of provision.

5. The welcome improvements to funding for the cultural sectors over the last 15 years have seen increases in grant in aid to Arts Council England, the reintroduction of free admission for the national museums and galleries, and new schemes such as Renaissance for the Regions. These have led to all sorts of benefits, not least the increased levels of participation shown in visitor figures to the major museums, and the competitive economic advantages that derive from a vibrant and creative cultural sector.

6. Not all DCMS sectors have benefited equally over this period, however. In particular, the historic environment has suffered from cuts in the grant in aid allocation that has gone to English Heritage. In real terms, English Heritage’s grant in aid fell by more than 11% in the 10 years from 2000–01, while Arts Council England’s grant in aid increased by 41% over the same period.15

7. This has of course happened at the same time as the Heritage Lottery Fund has made a transformative difference to the support available to heritage of all kinds. But the additionality principle means that Lottery funds should never be regarded as substitutes for funding provided through taxpayers’ money. The real- terms reduction in support for English Heritage has, instead, meant straightforward cuts in the level of support that was previously available, for instance in the form of grants to the private owners of historic properties, for essential conservation and maintenance.

8. We know that the Government is committed to tackling the public sector deficit and that DCMS and its Arm’s Length Bodies are facing potential cuts of 25–40%. This, ultimately, is a political judgement, which should also be viewed in the context of the Government’s aspirations for building a Big Society. However, there are likely to be costs incurred as a consequence of cuts of this scale, which we fear could create longer- term problems. In particular, further cuts in English Heritage’s grant-in-aid, as well as in local authority resources, are likely to mean:

— more buildings put at risk;

— less support for education and outreach within the historic environment sector;

— fewer conservation officers at local authority level, leading to poor decision making;

— the new Planning Policy Statement on the historic environment (PPS5) not being implemented as fully and effectively as it should be.

Lottery Questions: What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations? Whether the policy guidelines for National Lottery funding need to be reviewed? 9. The Lottery is a powerful force for change within the arts and heritage sectors. The Heritage Lottery Fund, for example, has truly transformed perceptions of the value of heritage and its relevance to the lives of individuals and communities. By refusing to define in any restrictive way the types of “heritage” that it funds, the HLF has helped to broaden understanding of the manifold ways in which the past is a living part of today’s society.

10. We therefore fully support the Government’s proposal to restore the original shares apportioned to the good causes, including the arts and heritage. This could have powerful benefits in promoting the Big Society, since arts and heritage have a major role to play in galvanising community action and support.

11. We also welcome the Government’s recognition of the importance of the additionality principle in relation to the Lottery. Lottery funding should not be a substitute for Government subsidy, and nor should any increase in the shares apportioned to the good causes of arts, heritage and sport be used as a justification for reducing Government support in these areas. Decisions on Lottery grants should continue to be made by Trustees operating independently from Government.

14 Investing in Success (HLF/Visit Britain, 2010). 15 Figures from DCMS. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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Structures

Questions:

What will be the impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council? 12. The Government’s decision to abolish the Museums, Libraries and Archives Council by April 2012 leaves a number of as-yet unanswered questions about how some key (and in some case statutory) functions will be delivered going forwards. These include the expert advice that is needed in handling Acceptance in Lieu transfers and the Government Indemnity Scheme, the professional understanding that underpins the process of museum accreditation, and the support for regional museums provided through the Renaissance in the Regions programme. We expect that arrangements for the transfer of these functions to another body should be undertaken in a way that seeks to preserve as far as possible the expertise that resides at a professional level within MLA. If this expertise is lost, it would represent a huge net cost to the taxpayer, as well as potentially jeopardising the survival of valuable parts of our heritage.

13. The DCMS is also considering the possibility of merging the Heritage Lottery Fund with other of DCMS’s heritage bodies, in particular English Heritage, as part of the forthcoming Public Bodies Bill. The pros and cons of such a move would need to be considered in great detail before any changes are made. For example, while the proposal may offer some marginal savings (in terms of overhead costs), it raises some difficult questions about keeping the Lottery-giving powers of any new body distinct from its regulatory powers (for example within the planning system) as well as its more commercial role in operating the existing English Heritage visitor attractions. Moreover, as has been noted, the Heritage Lottery Fund has a far broader definition of “heritage” than English Heritage, and operates UK-wide (rather than solely in England).

Philanthropy

Questions:

Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level?

Whether there need to be more Government incentives to encourage private donations? 14. Businesses and philanthropy can play a very important part in supporting heritage and the arts at all levels. Our recent acquisition of Seaton Delaval in Northumberland is a good example. The fundraising campaign led by the National Trust saw over £1 million raised through the donations of people in the local community, a clear demonstration of their commitment and support for the property and its acquisition. Local businesses were also generous in their support, as was the Regional Development Agency. This experience demonstrates what can be done when individuals, businesses and charities work together, underpinned by support from the Government through the Acceptance in Lieu scheme (administered by the Museums, Libraries and Archives Council on behalf of HM Revenue and Customs).

15. We agree that more might be done by Government to improve the conditions in which fundraising for arts and heritage takes place. Making the administration of Gift Aid simpler and more efficient, for example, would help to ensure that more people take advantage of it, and understand the difference that it makes. There could also be benefits in adjusting fiscal incentives in ways that would promote lifetime giving to the arts and heritage sectors.

16. For organisations within the public sector, a potential barrier to increasing income from philanthropic sources is the complexity of the rules around end-year flexibility that the Treasury imposes across all Arm’s Length Bodies. These rules are designed to ensure Government can keep control of the overall level of public expenditure, but they serve also to restrict those bodies’ use of funds held in reserves, which might have been raised from entirely private sources. The problem particularly affects DCMS’s Arm’s Length Bodies, since so many are established as charities, and are therefore required by law to hold adequate reserves or to raise funds from private sources for furthering their charitable purposes. Restrictions on the use of these funds potentially means the Government is operating against the terms of charity law, and also provides a disincentive for donors to give without fear that their funds will be effectively “frozen”. DCMS and Treasury should discuss whether there might be a case for giving Arm’s Length Bodies in the arts and heritage sectors more freedom to raise and spend money drawn from private sources without risk of contravening rules that were designed primarily to control against excessive burdens on taxpayer’s funds. September 2010 Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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Written evidence submitted by Liverpool City Council and members of Liverpool Arts Regeneration Consortium (LARC) (arts 54) 1. This response has been produced in partnership between Liverpool City Council and members of Liverpool Arts Regeneration Consortium (LARC), a partnership of several major cultural institutions in Liverpool, including the Bluecoat, FACT, Liverpool Biennial, Liverpool Everyman and Playhouse, Royal Liverpool Philharmonic, Tate Liverpool and the Unity Theatre.

2. Liverpool City Council and cultural organisations in the city work day-to-day with a range of other partners in tourism, health, regeneration, inward investment, higher education, as well as with other local authorities in the Liverpool City Region area. Many of these partners have provided input into this submission.

3. LARC and Liverpool City Council are working together to create a new cultural vision statement for Liverpool. We believe that cities need a new script for setting out the way in which investment in culture can make them successful. This new account will stress the connection between cultural creativity and a broader social creativity, about health, social care, education, the environment. It will seek solutions that genuinely involve the whole community, ensuring that the benefits of cultural success reach out across the whole city and the surrounding region. It will stress that success is dependent upon a healthy core infrastructure of artists and organisations as much as major new capital investments.16

Executive Summary 4. Liverpool17 has a world-class cultural offer. This offer has been a key driver in the area’s recent renaissance, and is recognised and exploited by businesses, agencies and local government as a crucial asset in the city region’s economic and social development and future competitiveness.

5. The main points of our response to the select committee’s questions are as follows:

— The Liverpool experience of culture-driven regeneration is unique, has been very successful and provides a model and approach that may benefit other cities. It demonstrates a high level of mature and sophisticated collaboration within and across sectors, and has been well-tested. It delivers world-class arts for tax-payers based in the city region, as well as enabling a return on investment supporting the city’s economic and social development.

— There is now a particularly strong partnership between Liverpool City Council and Arts Council England, North West. It is important that future funding is able to be locally responsive, knowledgeable about art-form development and regionally strategic.

— Arts organisations in Liverpool form part of a part of a finely-balanced cultural ecology, which has international impact and reach, but is locally relevant and specific. This role is at risk if funding cuts and future policy do not recognise and build on success; and recognise and respond to local challenges, such as a limited potential philanthropic base.

— The city region has placed culture at the heart of its future. Thus funding cuts may damage not only the arts sector, but the future competitiveness of Liverpool as a city, impacting on tourism, external image and profile, inward investment, talent retention, and the quality of life for existing and potential residents.18

6. An appendix is attached to this submission, which gives an indication of the range of evidence available of the impact of culture in terms of the economy, health, education, and social cohesion.

16 From The Liverpool Way the draft vision statement that is being prepared jointly between LARC and Liverpool City Council: “It’s about making the most of Liverpool’s remarkable cultural assets, and the major cultural organisations delivering to their individual and collective strengths, including outstanding international programmes and linking these to local communities and visitors to the city in a strong, collaborative partnership with the city council and others. It is about creating a movement for arts and culture not just monuments, about new ways of connecting creative producers, institutions, and creators to communities and social networks. It unlocks, opens up and makes visible the potential and talent in these communities and brings great art to Liverpool in a way that draws out and builds on our talent.” 17 For brevity, Liverpool is referred in this submission simply as “Liverpool” or the “city”; however, much of the planning and activity delivery referenced here extends to the broader city region. 18 The visitor economy in Liverpool city region already sustains 23,000 jobs and £1.3 billion annual visitor expenditure, and is set to grow to 25,000 jobs and £1.4 billion expenditure by 2012, rising to 37,000 jobs and £2 billion expenditure by 2020. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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What impact recent, and future, spending cuts from central and local Government will have on the arts and heritage at a national and local level? 7. As our tenure as European City of Culture 2008 demonstrated, Liverpool is a city where culture is playing a fundamental role in the renaissance of the city and its surrounding region. There is a real risk that funding cuts will not only undermine the quality of our cultural offer but, in doing so, have a negative impact on the regeneration process. Investment in culture galvanises economic benefits through attracting both leisure and business visitors, creating a dynamic environment that attracts inward business investment, and raising Liverpool’s profile nationally and internationally.19, 20 8. Less investment will mean we are less able to take the programming risks and undertake the development work needed to deliver the exciting and challenging new art that sustains the city’s international cultural reputation and gives regionally-based tax payers a balanced and excellent cultural offer. It will be harder to attract the “big names”—like the Picasso exhibition now at Tate Liverpool and Sex and the City star Kim Cattrall, who is shortly to appear as Shakespeare’s Cleopatra at the Liverpool Playhouse. It will be harder to sustain the consistently high-quality, high-profile work which can attract those “big names” in the first place. 9. Liverpool has attracted significant artistic talent to be based in or attached to the city—such as Vasily Petrenko, the award winning and widely acclaimed Chief Conductor of the Royal Liverpool Philharmonic Orchestra. Significant funding cuts will mean a real risk to our competitiveness in this regard. We will lose out to other countries because organisations will no longer be able to afford to maintain a sufficient critical mass of high quality activity that attracts such artists in the first place. It will become difficult to ensure the influx of new talent to the city, and to the country, which is crucial to the competitiveness of the UK’s cultural offer. 10. In Liverpool we have a national reputation for delivering outreach and education work that is making a real difference to some of the most deprived communities in the city.Much of the development and delivery of this work with our local communities could be threatened as it is underwritten by the core public investment that cultural organisations receive, or by regeneration funding that is now being lost to the City.21 11. Major events in the city, which are free and draw large crowds, help to make culture widely accessible.22 The well-developed programme in Liverpool is highly popular and often introduces audiences to new artistic experiences from international artists. The events give residents an opportunity to engage with their city and feel part of celebrating it. A number of partners across the arts sector are involved in delivering the city events programme, and the potential loss of major external funds and reduction in local authority budgets is likely to impact on the delivery of these events significantly. 12. Any process of determining future spending cuts must show an awareness of local challenges and recent history; it should also seek to build on success and genuine potential and avoid successful past investment being wasted. It can cost substantially more to repair the damage of cuts which provide relatively small-scale, short-term savings; in the long-term this approach provides both funders and tax-payers with poor value for money. The recent history of the Liverpool Everyman and Playhouse Theatres is a good example where the theatres suffered from a lack of investment over many years and it took very significant funding to reverse. This is also particularly the case when it comes to capital development and renewal of assets. 13. The arts and cultural organisations and practitioners of the Liverpool city region operate in an ecology which extends across the creative industries, is crucial to the tourism offer and connects with the city’s knowledge economy.23, 24 Individual artists and practitioners work across both the fully commercial and publicly funded sectors, and if there are fewer overall opportunities available due to substantial cuts within the funded sector, they are more likely to relocate to London. If the growth and development of

19 Liverpool City Region sold a record-breaking number of rooms in July 2010 95,000, a rise of 22% on the previous year and 11% on 2008, with occupancy levels rising overall, compounded by an overall increase in hotel rooms. Overseas spend for 2009 is estimated to be worth £47 million, with total visitor spend (and economic impact) for the year estimated at £485.8 million, supporting 6,753 FTE jobs. 57.1% of staying visitors and 47.9% of day visitors identified culture as a key reason for their visit. 20 Recent research undertaken by the city to understand the motivations of potential inward investors revealed that: 65% said it is harder to differentiate between destinations; 92% said that image and profile are becoming more important in their decisions; 58% said “soft” factors such as culture and architecture are more important than five years ago; and 60% cited a “Strong tradition in culture and the arts” as an asset of a demand destination. 21 A recent example of such work is a community arts project undertaken by Liverpool Everyman and Playhouse with a group of unemployed young men in North Liverpool. Inspired by this, the participants gained theatre lighting certificates by working with the theatres’ technical team, and can now gain work in the industry. Moving these young people from reliance on benefits to employment has given the young men hope and confidence, impacting on the individuals and their communities, and demonstrating a fiscal and social return on “investment”. 22 The major events programme includes the Mathew Street Festival, Africa Oye and the Hub Festival, as well as seasonal events and public art trails. In 2009 the programme attracted 915,000 visitors, who spent just over £33 million. 23 The Knowledge Economy prospectus for Liverpool recognises the importance of the “clustering effect”’ to building a healthy creativity and knowledge-based industry. The city’s Knowledge Quarter, the wider Hope Street area, is a key example of this interdependent clustering, where arts venues, cathedrals, universities and a science park provide a critical mass of “talented and productive people”’ which helps to drive this economic growth. 24 Jon Corner, Managing Director of private sector, Liverpool-based digital firm, said: “What is important to the future of my business is my ability to attract and keep talented people here and Liverpool’s cultural offer is a part of that.” Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

Culture, Media and Sport Committee: Evidence Ev 137

Liverpool’s creative and knowledge economy is damaged, its contribution to the region as a viable context for creative and knowledge industries development is damaged; related institutions and initiatives such as the North West universities and Media City in Salford are likely to suffer indirectly.

14. There is also the importance of publicly funded cultural organisations undertaking research and development of artistic products which then move into the commercial sector. Liverpool is playing a strong role in this, for example two productions from the Liverpool Everyman and Playhouse have played in the West End recently,25 and a film that resulted from a FACT programme won the Palme D’Or in Cannes.26

15. The city’s brand—for both tourists and potential investors—now focuses on the cultural, creative city. Liverpool’s economic development strategy identifies the development of the tourism and knowledge economies as crucial to its successful diversification. The future economic competitiveness of the city—and its global positioning—is tied to its cultural offer and profile.

16. Liverpool city region’s Visitor Economy Strategy to 2020 uses the area’s cultural offer as the key distinctiveness in attracting new markets and repeat visitors. The long-term viability of the tourism industry in Liverpool is linked to the quality and vitality of its culture offer, and if cuts are made in a way which limits or damages that offer, it will damage the tourism industry, affecting jobs (including hotels and restaurants), future developments and the growth of the area.

17. And it is important to recognise that Liverpool’s cultural offer is truly part of the UK’s unique national cultural and tourism offer; an offer which extends beyond London to include a broad body of crucial and outstanding artists and arts organisations across the country.

What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale? 18. Liverpool already provides a strong example of arts organisation working in close collaboration amongst themselves, and in a mature, sophisticated partnership with the City Council and other sectors. The arts networks include LARC (as described above), and smaller organisations joining together as part of COOL (Creative Organisations of Liverpool). This is mirrored through the Merseyside (local authority) Arts Officers Group, and developing networks of smaller organisations in other boroughs.

19. LARC partners have a particularly strong history of working together from artistic collaborations, to working on shared operational services aiming both to save money and to reduce combined environmental impact. Equally, we work with other sectors, such as health and education, in activities which often add significant value to the return on investment over and above what could be delivered if they were undertaken by one sector working on its own.27, 28 In addition, there is a growing practice of working with tourism partners, including the Tourist Board, on successful external marketing to visitors, promoting culture and heritage through destinational campaigns, visitor-focused guides and websites.

20. Artistic collaboration and sharing has been at the heart of Liverpool’s success over the past few years, as shown through Liverpool 08, and through the extensive artistic collaborations that are still continuing. The Liverpool Biennial is a prime example of partnership working, involving all the major visual arts organisations in delivering this major international event.

21. In terms of operational costs, cultural organisations are already lean operations—they are charities and, predominantly, SMEs with minimal room for duplication, already limited “back office” functions and each quite distinctive in character and shape.

22. Nevertheless, in Liverpool we have been working for some time to foster greater operational collaboration. Our Chief Executives, Marketing, Education, HR and operational managers all meet regularly to share knowledge and support each other in effective working and identifying savings. We are now considering how we can take this collaboration to a new level in order to provide more sustainable models of operation for the long term.

25 Ghost Stories is currently running in the West End, and The Caretaker has completed a three-month West End run and is about to commence a commercial tour of the US. 26 Uncle Boonmee Who Can Recall His Past Lives was awarded the Palme d’Or at this year’s Cannes International Film Festival. The film was made as part of Thai artist Apichatpong Weerasethakul’s Primitive Project, which was co-commissioned by Arts Council England regularly funded organisation FACT for the inaugural Abandon Normal Devices (AND) Festival of New Cinema and Digital Culture. 27 One example of how the arts have added value to health provision is a project undertaken by FACT in partnership with Alder Hey Children’s Hospital, in which an installation based on Birdsong had a proven impact on patient anxiety and is now forming the base for long term study on reducing needle phobia in patients. 28 Another example of ground-breaking collaborative working is the Creative Apprenticeships scheme, led by Tate Liverpool working with all LARC partners and Liverpool Community College to support skills development in young people giving them greater access to working in the creative and cultural sectors. In 2008–09 the first 10 Creative Apprentices in the UK were placed in all the major arts organisations in Liverpool. In 2010 the scope of the hosting organisations has broadened significantly with 20 young people currently in post. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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What level of public subsidy for the arts and heritage is necessary and sustainable? 23. Cultural organisations all have very differing patterns of public investment, earned income and donated income. It is hard to be specific therefore about a generic level of public investment which is necessary, as it will depend on the purpose and focus of the organisation. However all the major arts organisations in Liverpool work on a mixed economy, and in many cases, where the nature of their work allows for earned income, public subsidy represents a minority proportion of overall turnover. 24. Certain activities, particularly those with social development or artistic innovation at their core do not always have an immediate economic return and require specific and focussed financial support to realise their long term benefits in both economic and social terms. These activities are often supported on a time- limited basis and are not given time to engender real social change. Geographical areas receive support, and then lose momentum as the initiatives end and the funding moves to other problem agendas. 25. There should be a long-term strategy for the embedding of cultural delivery into public services, (education, health, environment), for the development of initiatives that bring long term benefits, creating new audiences for culture and benefiting a wider range of people.29, 30 26. We would also argue that public funding for culture and heritage should not be seen as subsidy but as investment that can stimulate a local economy. Liverpool’s success as European Capital of Culture (ECoC) demonstrated this with substantial returns across the social, economic and physical fabric of the city,proving a substantial return on public investment. It attracted 9.7 million additional visits to Liverpool, generating a direct economic impact of £753.8 million of additional visitor spend in the city region and region. These included 2.6 million visits from Europe and the rest of the world, 97% of which were first-time visitors to the city. These additional visitors generated 2.43 million staying visitor nights in the city region. Subseqeuently, over 1,000 new hotel rooms have opened in Liverpool city centre in the last year, on the strength of the leisure weekend break market. 27. This positive effect is continuing with an underlying upward trend in audiences, and continuing strong performance in the visitor economy. Local Enterprise Partnerships will be ideally placed to ensure the development of effective and positive collaborations that can have real impact, and that investment continues to support genuine economic growth and development. 28. Cultural investment has helped to make the city economically and socially viable again, but the pillars of the city’s recovery remain relatively fragile. We still lack the commercial and private wealth that, in other major cities, helps fuel cultural success and the city’s smaller cultural organisations particularly suffer as a result, particularly in relation to fundraising from individual and corporate partners.

Whether the current system, and structure, of funding distribution is the right one? 29. In the run up to 2008, DCMS, ACE and Liverpool City Council (LCC) worked together in their approach to the cultural infrastructure in Liverpool to be strategic in their investment, and to support the significant rise in investment from LCC. DCMS were particularly crucial and forward-thinking in their support of Liverpool and in recognising and investing in the breadth of potential benefits. This joining-up has paid significant dividends, but if national partners significantly reduce their funding, key local partners will be unable to fill that gap. 30. The regional and sub-regional role which ACE NW has played in Liverpool in the last decade has been invaluable beyond its relationship with LCC. This capacity for regional and sub-regional knowledge and for using that knowledge to inform strategic investment—whether large or small—must continue. 31. There has already been a significant impact from the loss of RDA tourism-focused investment, affecting our ability regionally to support significant international arts activity and facilities development which has been proved to generate substantial tourism gain for the region. This is not only about the loss of investment, but also the loss of promotional campaigns run at a regional level which have directly benefited Liverpool and other parts of the North West.31 32. In funding terms, it is important that the mechanisms which support a city region approach can guide and develop city region ambition. We will seek to work with our Local Enterprise Partnership when it is formed to ensure that the relationships and mutually supporting activities which have already been developed between the cultural offer and the area’s economic growth are not lost.

29 The Royal Liverpool Philharmonic’s In Harmony programme is a strong example why cultural organisations should be supported through mainstream education budgets, given the real impacts that can be achieved. Inspired by the Venezuelan El Sistema model, In Harmony is supporting a three-year programme between the RLP and the local primary school and the community in West Everton, one of the most deprived areas in the UK. Interim evaluation results demonstrate strong improvements in numeracy and literacy rates. The percentage of children improving by two national curriculum levels or more in SATS tests in reading has increased from 36% in 2009 to 84% this year, and in numeracy from 35% in 2009 to 75% in 2010. 30 The Bluecoat engages directly with current social care agendas through provision of high quality services for learning disabled people in a mainstream arts venue. Participants in the programme have significantly increased their confidence, for example now travelling independently to the project, and joining in volunteering activity. This scheme is currently funded through Area Based Grant. Funding cuts will affect delivery in 2010–11 and the future is uncertain for this award-winning programme. 31 In 2007, 746,000 visitors were estimated to be directly influenced to visit the city by specific marketing from the tourist board; a further 101,000 visitors were indirectly influenced by marketing to make their visit. Some 112,000 staying visitors were influenced by marketing; these visitors spent £24.6 million on their visits. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations? 33. We welcome the Government’s commitment to restoring the original principles of Lottery distribution but firmly believe that the real impact will depend on how it is distributed in practical terms.

34. There must be a fair balance between cultural and heritage beneficiaries, and between investment in projects and investment in infrastructural development and maintenance. In addition, Liverpool city region and its cultural offer has benefited significantly from lottery funds distributed by Arts Council England. This approach to investing lottery money strategically—rather than only through open competition—has been crucial to a real balance in terms of the impact which lottery funding can have, and has supported organisations to take risks and fundamentally move forward.

Whether the policy guidelines for National Lottery funding need to be reviewed? 35. Lottery funding must be managed strategically and in a way which properly understands an area’s long-term needs.

36. Policy guidelines on capital support must be structured to ensure development of new/refurbished buildings where they are most needed and to make sure that infrastructure is not allowed to crumble at the expense of funding for projects. The emphasis should be on the capital needs of existing successful organisations whose ambition is cramped by inadequate or dilapidated buildings, rather than on new initiatives, unless there is a really compelling case for why a new organisation and a new building is needed.

37. Policy guidelines will need greater flexibility, especially in terms of match funding requirements, as smaller organisations will struggle to meet those requirements in a reduced funding environment.

The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council? 38. From the experience and success which we have had with European Capital of Culture 2008, and more generally over the last decade of redevelopment in Liverpool city region, we believe that it is important that the Arts Council should maintain genuine regional/sub-regional and art-form knowledge, in order to be relevant to tax payers, needs and assets in our area; and that it should be enabled at a regional level to be strategic and support regional/sub-regional aspirations.

39. We are also concerned about changes to MLA which may affect both training in the museums sector, and the Renaissance in the Regions programme, which has, thus far, been very successful in the North West. We consider it crucial that that strategic approach to investing in the regions not be lost.

40. Finally, we welcome the Prime Minister’s recent comments on the value of the tourism industry, and wait to see the potential impact of changes to tourism agencies and support bodies. We are concerned that a balance should be struck between locally responsive activity,and a broader, strategic view. The relationship between the RDA and the local city region body—The Mersey Partnership—was crucial to the tourism success and impacts of the European Capital of Culture 2008.

Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level? 41. LARC partners are already engaged in a range of relationships with businesses and philanthropists, and firmly believe that there is a long-term role for both to contribute to funding the arts, in balance with public investment and earned income, as well as to continue the other kinds of contributions they also make through bringing their expertise to board membership, and engaging in other kinds of mutually responsive partnerships.

42. It is important, however, that, in promoting philanthropic giving, government recognises that the local environment plays a fundamental part on the potential availability of philanthropic partners. Liverpool is classified as “vulnerable” in the recent Private Sector Cities report from Centre for Cities.32 The city currently has a very limited private sector and individual wealth base. It has also suffered in recent years from the trend of consolidation of professional services businesses, with locally and regionally-based firms being bought up by national and international conglomerations, and the decision-making power

32 The index of England’s stable cities looked at Liverpool’s declining population, limited real GVA growth, limited private sector jobs growth, low average house prices, high average JSA and Incapacity Benefit Rate and low average wages. Neighbouring Birkenhead, within the city region area, appears on the index of England’s struggling cities. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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subsequently moving out of the city. Arts and Business reported that private investment in arts in the North West was down 27% in 2008–09 on the previous year, and accounts for only 3% of the total private investment received in the UK arts sector.33, 34 43. There is significant competition already for the available philanthropic resource in Liverpool, not only from within the arts sector, but also from heritage, higher education, faith-based organisations and other charities. Whilst a number of arts organisations in Liverpool have well-developed partnerships and initiatives, smaller organisations are not necessarily equipped with the expertise or resource to engage in significant fundraising activity. 44. Whilst we feel that there may be opportunities in the future to grow the level of philanthropic giving in Liverpool, we believe that it is likely to be at a lower level than in other, more economically prosperous cities. This is also likely to affect the potential for undertaking fundraising for endowment funds, as a limited market for fundraising will necessarily have an impact on all areas of fundraising (revenue, capital and endowment), and potentially bring them into competition with each other. 45. Finally, in encouraging greater philanthropy it will be important to recognise that there is a limited culture of philanthropic giving in the UK at present, which goes beyond the experiences and endeavours of the arts sector. The university sector in the UK has only recently benefited from significant government matched funds, to help promote greater philanthropic giving. In moving towards greater philanthropy, small-scale giving must be appreciated as much as larger gifts, in order to foster that greater giving culture and habit.

Whether there need to be more Government incentives to encourage private donations? 46. Introduction of incentives to encourage private donations would be welcome, in particular in relation to “Lifetime giving”, whereby a donor gifting a work of art retains some ownership of the item, is enabled to share it with the public through an arts organisation, and gains the benefits of both a tax benefit and being recognised as a donor within their lifetime. In Liverpool, where there is a limited pool of potential individuals who may have money to give, finding other ways in which to support giving—such as the giving of objects— will be particularly important. September 2010

Written evidence submitted by English Heritage (arts 74) Summary — Our heritage is at greater risk as a result of the recession. — Tackling heritage at risk is dependent on public funding and resources, both national and local. — Cuts to public funding, added to other impacts of the recession such as restrictions on credit and the liquidation of developers and construction companies, will make it more difficult to find solutions for heritage at risk. — Over the past 13 years, English Heritage has received real terms cuts in our grant in aid. This contrasts with increases in funding to the DCMS and to other DCMS bodies. — English Heritage has already made significant efficiency savings which limit our ability to make further efficiency savings over the next four years. — If there were further cuts to English Heritage funding, depending on their level, we would aim to protect our core services, target our resources more effectively and generate more income from other sources (depending on our capital allocation from government). We are already working more creatively with other organisations and we aim to do more. — We hope that the government will allow English Heritage to use income generated from other sources to complete the Stonehenge project for 2012.

33 http://artsandbusiness.org.uk/Media%20library/Files/Research/pics0809/pics0809 fullreport.pdf 34 Brenda Parkerson, Regional Director, Arts and Business North comments: “The North West continues to have an extraordinary cultural life. We need everyone to understand how hard cultural organisations work to secure private money to make this cultural life flourish. Many of our cultural partners are showing a real willingness and ability to adapt to the new funding environment and Arts & Business is with them every step of the way. It is not about ‘quick fix’ fundraising, arts organisations need to help foster a culture of long-lasting relationships. We know it can be harder to raise private money here in the North West than in other parts of the country. London arts bodies receive more than three times as much private investment as in the England regions—and 88% of all individual giving is concentrated in London. Arts and Business’ analysis also reveals there is a vast difference in levels of private investment received by large and small organisations. Large and major organisations (with an annual turnover of £1 million !) receiving approximately £602 million, while medium and small organisations (with an annual turnover of under £1 million), collectively receive around £59 million. The UK model of public and private investment is working and while under severe threat, must not be allowed to falter. Collectively we must do all we can to champion and grow the contribution of the private sector in this region to make our cultural world succeed.” Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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— Public subsidy will continue to be necessary to address the market failure in funding heritage which provides a public benefit and to conserve and maintain the historic properties which English Heritage cares for on behalf of the nation. — English Heritage is happy to consider any structural changes which result in better services for the public and reduced costs. — Changes to the Government’s rules on End Year Flexibility would help us make greater use of private philanthropy.

Q. What impact recent and future spending cuts from central Government will have on heritage at a national and local level. 1. English Heritage is the UK Government’s statutory adviser and a statutory consultee on all aspects of the historic environment and its heritage assets. This includes archaeology on land and under water, historic buildings sites and areas, designated landscapes and the historic elements of the wider landscape. 2. English Heritage monitors and reports on the state of England’s Heritage. Each year we publish the Heritage at Risk survey which is an Official Statistic. The condition of our heritage and the recent trends, including the impact of the recession, provide the context for the consideration of the impact of reductions in funding. 3. In 1999, one in six buildings on the Heritage at Risk Register was fully economic to repair. In 2010 that figure has fallen to just one in eight. The “conservation deficit”—the difference between the cost of repair and the end value—of these 1,218 buildings is now estimated to be £465 million, a 10% rise on the 2009 figure. Public funding and resources are critical to ensuring these, our most important national assets, are brought back into viable economic use and are not lost to future generations. Reductions in public funding alongside restrictions on credit, falling investment returns and the failure of development companies will make it much harder to find viable solutions for our heritage at risk. 4. There will be impacts at national and local levels, both in the resources available to look after publicly owned historic properties and in the support public organisations give to private and voluntary sector owners. 16% of the properties on the Heritage at Risk Register are in public ownership and public resources, in the form of advice as well as grants, are also vital in bringing back into use properties owned by the private and voluntary sectors.

Impact on Publicly Owned Historic Properties 5. A significant part of England’s heritage is owned and managed by public organisations. Reductions in public spending are likely to affect their ability to maintain the heritage in their care. We have already seen evidence of this in the withdrawal of the Higher Education Funding Council’s dedicated funding stream for historic buildings in university estates. 6. There will be increasing pressure to dispose of property regarded as superfluous to requirements— Finsbury Health Centre being one example. This could lead to an increase in sensitive buildings and sites coming on to a flat property market at a time when investors with the capital and experience to take on challenging restoration projects have become increasingly scarce. At the same time, voluntary and charitable organisations may have more limited ability to take on such projects as a result of the falling value of their endowments.

Impact on Public Sector Support for Private and Voluntary Sector Owners 7. Public bodies provide a range of practical support to maintain our heritage. English Heritage grants to historic places although modest (about £25 million per year) are carefully targeted and enable us to help owners of heritage at risk in ways that other organisations cannot by removing enough of the risk to make it worthwhile for the private sector to invest. For example: — We invested £250,000 to keep the roof on the Roundhouse in Camden at a time when no long term solution was in prospect. This helped to attract the philanthropic investment which has secured the future of the building and provided new cultural facilities for London and the local community. — In August this year a £50,000 grant was made to save the lead mining centre at Grassington Moor in the Yorkshire Dales where water erosion had caused such severe damage that the site was on the Heritage at Risk Register. This relatively small sum will pay for emergency repairs and a management plan to ensure a long term future for this important part of our industrial heritage which would otherwise be lost. When necessary we can make grants available very quickly to save buildings at urgent risk. However, the value of our grants has declined with the real terms reduction in our grant in aid over the past 13 years. This trend will continue if our grant in aid is cut in the next spending round and without our “last resort” assistance, historic buildings and sites will be lost forever. 8. Because our heritage is part of the fabric of our daily lives it is generally maintained by funding from organisations whose primary purpose is not conservation, including for example the Regional Development Agencies’ place-based funding programmes and DEFRA’s Environmental Stewardship programme Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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(administered by Natural England) which is the largest source of funding for heritage in rural areas. English Heritage is concerned that pressures on the budgets of other organisations may result in them no longer supporting heritage projects. 9. At the local level, over £1.1 billion will be cut from local authority funding for the financial year 2010–11, with further reductions to come across the course of the next spending round.35 Reductions in local authority funding will affect their ability to support heritage. Local authority budgets for taking statutory action for repairs and urgent works notices to historic buildings are also likely to be reduced. Partnership schemes involving owners, local authorities, English Heritage and third parties have been particularly successful in tackling some of the more intractable cases, but are now themselves at risk from budgetary cut-backs. 10. The number of heritage staff employed in local authorities has declined by 14%36 since 2007, a trend that could accelerate as council budgets are squeezed and local authorities look to make cuts in non- statutory services. Conservation and archaeological officers play a vital role in identifying solutions and putting investors in touch with owners and identifying and pursuing funding opportunities from organisations such as English Heritage and the Heritage Lottery Fund (HLF). Without their expertise the task of removing buildings from national and local “at risk” Registers will become much more difficult.

Impact on English Heritage Funding History 11. English Heritage’s recent funding history affects our ability to sustain further cuts. Since 1997 EH has received grant settlements of below inflation, resulting in a real terms reduction of £130 million. EH funding was cut when DCMS received above inflation increases. Some of the other DCMS Arms Length Bodies have received increases significantly above inflation over recent years. Over the last 10 years, Arts Council England experienced real terms growth of 41%, Sport England experienced 182% growth while English Heritage received a cut of over 11% in real terms.

% Change in Core GIA Allocation DCMS v English Heritage (**Excluding Olympics & Tote) 130%

125%

120% DCMS % Change 115% EH % Change

% Change Inflation 110%

105%

100% 2005/06 2006/07 2007/08 2008/09 2009/10

12. The reduction in our funding over the last 13 years has had a significant impact, including the reduction in the value of our grants referred to above, exacerbated by the fact that construction industry costs have risen above the rate of inflation during that period. English Heritage cares for 420 historic sites and monuments put together since the 1880s as the national collection of historic places and we now have a maintenance backlog at our properties of over £50 million. 13. Against this background, we have made significant efficiency savings and generated more income to enable us to continue to provide our services. For example, we have relocated our finance department out of London and reduced its cost by £800k per annum. Our admin cost has fallen by 16% in the three years since 2006–07. The scope for additional efficiency savings is limited because of what we have already achieved. 14. English Heritage has been highly successful at generating more income and achieved 7% year on year growth in recent years. The income we generate helps to sustain the heritage in the care of the nation and reduces the burden on the taxpayer but our ability to increase income is dependent on being able to invest to improve our offer to visitors. For example, at Kenilworth Castle we invested around £3 million which

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has taken the property from a deficit of £395k in 2004–05 to a surplus of £414k in 2009–10. We are keen to continue to increase the income we generate but this is dependent on the level of capital we are allocated by government.

In year Cuts 15. Government funding for English Heritage has been subject to an in-year cut of £4.24 million. To deal with this, we have introduced a series of measures including an immediate recruitment freeze across the organisation, the withdrawal from our successful bid to the Future Jobs Fund and a cut of £1 million to our Heritage Protection Reform budget. Further efficiency measures are also being introduced but given the savings that have already been achieved in recent years, each further saving is more of a challenge to achieve.

Future Cuts 16. Despite our funding history, English Heritage is realistic that further cuts are likely as part of tackling the national economic problems. If we are faced with further cuts our response would be to: — protect our core services, especially our expert staff who advise on planning, so that we can be most effective in supporting local authorities and owners; — target our resources more effectively using the National Heritage Protection Plan we are developing to prioritise the resources we (and others) put into the understanding and protection of the historic environment and our Asset Management Plan which will enable us to direct resources towards the most pressing conservation and maintenance needs in the historic properties we care for directly; — generate more income from other sources, where we have been very successful in recent years (as outline above). Subject to the capital allocation we receive as part of the Spending Review we will continue to invest in our sites. We want to dedicate as much of our resource as possible to improving the experience for visitors to our properties. We will therefore be looking hard at which of our assets could release income which we can use to reinvest for greater public benefit; and — increase partnership working, including working more closely with the voluntary sector and other public bodies (this is explored further in the section on working together more closely)

Stonehenge 17. English Heritage was bitterly disappointed at the Government’s decision to withdraw Government funding for the Stonehenge Environmental Improvement Project. As the House of Commons Public Accounts Committee concluded in 1993 the presentation of Stonehenge is a “national disgrace.” Stonehenge is an iconic site, familiar to millions all over the world. 71% of current visitors to Stonehenge are from overseas and we expect numbers to increase in 2012. In the context of the very considerable investment being put into the London 2012 Olympic Games and Paralympic Games, English Heritage believes it is vital that Stonehenge offers visitors a high quality experience, worthy of the significance of the monument. We therefore hope that the government will allow us to use income generated from other sources to complete the project for 2012.

Q. What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale 18. English Heritage already works closely with other organisations and we aim to do more of this in future. For example, we already run a joint scheme with the Heritage Lottery Fund for Repair Grants for Places of Worship. We will continue to explore how we can work together more effectively using English Heritage’s practical expertise to help communities identify, prepare and implement projects that can secure HLF support, and ensure that their funding is used efficiently and effectively. 19. Sharing services in back office functions is being promoted across the public sector. In the light of this, the Commission for Architecture and the Built Environment (CABE) recently requested that English Heritage provide them with a full range of finance services. CABE and English Heritage have sought DCMS approval with a view to starting this arrangement through a service level agreement from December 2010.

Q. What level of public subsidy for the arts and heritage is necessary and sustainable 20. Some level of public subsidy is necessary to sustain parts of our heritage, reflecting its the public value and the fact that market solutions will not always be possible. 21. As already mentioned above, our Heritage at Risk Register estimated the “conservation deficit” to be £465 million. This is the difference between the cost of repairing designated heritage at risk and the end value, ie the funding necessary to attract private investment. 22. A level of public subsidy will continue to be necessary for the maintenance and conservation of the 420 historic sites and monuments put together since the 1880s as the national collection of historic places and cared for by English Heritage. As already stated above, there is a maintenance backlog at our properties of over £50 million. Our Asset Management Plan provides us with evidence that if investment in the Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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condition of our sites and properties continues at the current level, the maintenance backlog will increase. If we were able to increase the £14 million we currently spend on our historic estate by £6 million we could reverse the decline in the condition of the properties.

23. Excluding the costs of conservation and maintenance, we have worked hard to reduce the cost of to the taxpayer of opening the properties we care for to the public by cutting our costs and generating more income. In 2009–10 we made an operating surplus of £2.5 million compared with a deficit of £2.4 million in the previous year. This is partly due to the increase in visitors due to people holidaying at home but also reflects efficiencies and investments in improving the quality of our sites.

Q. Whether the current system, and structure, of funding distribution is the right one 24. On 26 July 2010 DCMS announced that it is looking at its responsibility for heritage and the built environment, and considering the role and remit of English Heritage, the Heritage Lottery Fund and the National Heritage Memorial Fund. English Heritage is happy to consider any structural changes that would result in better services to the public and reduced costs. We are working closely with the Department for Culture, Media and Sport to see what opportunities there might be.

25. In considering the relationship between English Heritage and the Heritage Lottery Fund it is helpful to understand the differences between the grants made by English Heritage and those made by the HLF. As outlined above, our grants are targeted on heritage at risk and we do not require projects to meet multiple objectives. English Heritage grants safeguard important buildings so that they are not lost while a solution can be found by the market, removing enough of the risk to make it worthwhile for the private sector to invest. Around 20% of English Heritage grants for repairs to buildings at risk go to private owners. Almost half go to charitable organisations. When necessary we can make grants available very quickly to save buildings at urgent risk.

Q. What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations 26. The Lottery is a vital source of funding for heritage. Against the background of the impact of past and future public spending cuts outlined above, it is very welcome that the government has made a commitment to redistribute Lottery resources to the original good causes, including heritage.

Q. The impact of recent changes to DCMS arm’s length bodies—in particular the abolition of the UK Film Council and the MLA 27. The structures for channelling public funding are a matter for Government to decide. English Heritage hopes that the future will be secured for important functions currently carried out by the MLA, notably the Museum Accreditation Scheme and the Government Indemnity Scheme. We also note the Government’s decision to abolish the Advisory Committee on Historic Wreck Sites. We will work with DCMS to identify options for securing the functions of the Committee which is currently administered by EH on behalf of Government.

Q. Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level Q. Whether there need to be more Government incentives to encourage private donations 28. English Heritage raises around £3.5 million (net) from major benefactors, legacies and smaller donations and corporate fundraising (the latter is relatively small). Philanthropic organisations and individuals have played a significant role for a number of years, but more so in the larger London-based cultural organisations. A mixed economy of public and private funding is preferable but there will be a limit to what can be raised through philanthropy as organisations will be competing against each other.

29. There are two reforms Government could make which would improve our ability to take advantage of private giving:

— Releasing Arms Length Bodies which receive philanthropic donations from End of Year Flexibility requirements would make an enormous difference. This would allow for a much greater degree of coordination across projects and forward planning and would respect the fact that donations are not public expenditure.

— Reform of the Gift Aid scheme in order to simplify the process for both membership and admissions would be of benefit to the heritage sector. September 2010 Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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Written evidence submitted by Arts & Business (arts 75) “On stage and screen there is a constant message of imagination, radicalism and challenge to the status quo. But in the way it runs itself, the arts world is one of the most unimaginative and conservative industries in Britain.” David Lister, Arts Editor, The Independent, 24 August 2010. “Arts & Business is the most successful arts-funding organisation this country has ever known. When it started, there was barely any private giving to the arts in Britain. In 2008, the figure was £686.7 million, falling slightly last year to £654.9 million. By 2016, the figure will be £1 billion, according to A&B’s forecasts.” Bryan Appleyard, Cultural Commentator, The Sunday Times, 29 August 2010.

Executive Summary 1.1 With 70% of arts organisations seeing private investment as more important to them over the next three years, and with the private sector due to recover faster than the public sector, the Government has an opportunity and responsibility to review its strategy on cultural philanthropy and private sector investment into the arts. The DCMS and the Arts Council need to consult carefully with their strategic partners and funded bodies to clearly define objectives, roles and outputs. Only together can we augment public funding with new and innovative private sector models. 1.2 We have identified the two priority aims for government, business and the arts sector in terms of increasing private sector investment: to expand the earned income base and increase private giving. 1.3 Arts organisations need to work harder in innovating new income. Making a greater use of existing intellectual property rights or the potential of digital engagement with audiences are tangible examples of how this can be done. Arts & Business has worked for 34 years to produce some of the most innovative cultural-business partnerships. 1.4 The way that Arts Council England funds the arts needs to change. We need to move away from a grant-giving model to rewarding innovation and diversity in funding over the 2011–14 period. Targets around innovation and private sector investment must be set in order for the vast amount of organisations which do not bring in sizable private sector investment to work towards. Arts Council England must then work with its partner Arts & Business to raise the sector to the next level. 1.5 Individual giving must be further encouraged and existing fora used to promote giving (Arts & Business’ Cultural Champions programme is a leading example). There is a need for further clarity in the existing tax laws, as well as the preservation of the higher rate of benefit directed to the donor under the present gift aid system. Also HMRC need to be more donor-orientated and understanding of the needs and motivations of giving. 1.6 The arts sector must see itself as part of the wider third sector where it has a great role to play in the development of the Big Society.

What impact recent, and future spending cuts from central and local Government will have on arts and heritage at a national and local level? Whether the current system, and structure, of funding distribution is the right one? What level of public subsidy for the arts and heritage is necessary and sustainable? 2.1 Given the proposed public spending cuts of between 25–40% never before has there been a greater need for the UK government to adopt a coherent policy to promote private sector investment into the arts. Arts & Business has 34 year experience in channelling private sector investment from companies, foundations and individuals into the arts as well as working with arts organisations to facilitate, innovate and celebrate initiatives giving a more entrepreneurial sector. Arts & Business arts members receive four- fold more private sector income than non-members. 2.2 The Chancellor challenged the nation to a dialogue on prospective cuts. Arts & Business with the National Campaign for the Arts responded by creating the Forum for Arts, Culture & Heritage with our combined arts memberships of over 1,650 cultural bodies, to identify the impact of where cuts might fall, where growth can come and how we can build a robust and sustainable cultural sector in the future. 2.3 The Forum notes that very few arts organisations work on an equal mix of third public, third private and a third earned income—according to Arts & Business’ Private Investment in Culture 2008–09, the average UK arts organisation receives around 53% of its income from public funding, 32% from earned income and 15% from private investment. Most of the larger publicly funded arts organisations already earn more income than they receive in public subsidy, but most grassroots organisations need to expand—if not double—their earned income as a priority. For instance Arts & Business research has recently found that around 40% of the sector currently receives no private investment and from the organisations that do, only 8% have a legacies programme. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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2.4 Generally, organisations outside London find it harder to raise private income. Arts organisations working in the public arena such as health and criminal justice rely extensively on public service contracts and funding. Regional arts organisations also face a double-whammy in that local authority budgets are even more vulnerable, as all local authorities face cuts of at least 25% if not more and they tend to cut culture first. 2.5 What does this mean for private investment? Arts & Business’s recent research into regional private investment found:37 — 50% of business investment in England goes to the regions outside of London and this £77 million of business investment received in the regions accounts for 38% of their overall private income). — Individual giving continues to rise in the regions—it increased by 38% in 2007–08—two years after Arts & Business’ individual giving training was rolled out across the country—and by a further 4% in 2008–09, rising to £42 million, despite the drop in the UK private sector investment of 7% overall. The Forum noted that public sector cuts should be back-loaded with deeper cuts coming at the end of the 2011–14 spending period.

The Private Sector Policy for the Arts 3.1 Given the threats to public spending in the arts, Arts & Business believes we have a once in a lifetime opportunity to rewrite and reboot the arts economy and grow private sector investment. This is the motivating driver behind the five initiatives which make up the recently published Arts & Business Private Sector Policy for the Arts. 3.1.1 Firstly a new Challenge Fund Scheme to stimulate individual philanthropy for the Arts: we believe Challenge Funds are as important as tax incentives for promoting greater giving. Arts & Business has launched a new pilot challenge fund for the arts with an initial fund of at least £500,000 working with 145 registered arts organisations. In partnership with UK philanthropist Alec Reed and his Big Give initiative, Arts & Business has designed The Big Arts Give as a model dramatically reanimates individual cultural philanthropy in this period of economic difficulty and looks to raise £3 million by Christmas 2010. 3.1.2 A Legacy Campaign for the Arts: many arts bodies with an annual turnover of under £5 million have little or no knowledge on how to plan fundraising from non-public income streams over a three year period. Many do not have, or have only just started to think about, a major gift programme. Furthermore, according to Arts & Business latest Market Trends survey (August 2010) 68% of respondents don’t currently have a Friends/members scheme. The majority of arts organisations are also under-exploiting the potential of legacies within their fundraising activity. Out of 783 arts and cultural organisations that responded to the Arts & Business “Private Investment in Culture 2008–09” survey, only 66 reported that they had a legacy scheme from which they received financial support. The total (extrapolated) value of this support to the sector was approximately £65 million. 3.1.3 A Matching Fund to encourage corporate giving to the arts: respondents to the Arts Council’s Great Art for Everyone consultation requested help with identifying alternative sources of funding and were keen to see brokerage of commercial sector investment in the arts sector. We do not believe that it is practicable for a public body to deliver sponsorship brokerage in the volume required for individual arts organisations, however we believe that other forms of “brokerage” and incentivizations are feasible. The revival of the Arts & Business matching sponsorship grant scheme was the top recommended activity as voted for by arts respondents to our survey. Further evidence (from A&B Scotland research) suggests that matching public funds drive increased business support. Given the current economic climate, however, and desire to make every public pound deliver maximum value for the sector, we propose to deliver a matching fund financed jointly by government and existing regional business supporters of the arts, who wish to encourage other new sponsors to follow their example by offering them a pound for pound matching scheme. This tried and tested model, run by our Sponsors Club for Arts & Business in the North East region, has been running successfully on a regional scale for 10 years. Now with government investment, we propose the national roll-out of an enhanced model, with upwards of a minimum initial investment of £250,000; which we would use to raise an equal sum from regional business to create a matching fund of £500,000, which is in turn used by arts fundraisers to develop new or returning sponsorship relationships on a £2 for £1 basis; delivering a leveraging ratio of public investment of £1:£5. We would welcome partnership working with ACE on the distribution of such funds. In our recent consultation with the sector through our 2010 Have your Say survey, 67% of arts organisations have chosen one of the two “Matching programmes” outlined above as their primary priorities for Arts & Business to deliver, exemplifying the extent to which incentives are seen as important to encourage more business investment and individual giving.

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3.1.4 Greater understanding and reform of cultural tax incentives to underpin a vibrant arts mixed economy: over the past two months Arts & Business has worked in partnership with Ernst & Young to produce clear and definitive recommendations on tax. Too few people understand gift aid or the present HMRC rules affecting high donors. — The composite rate of gift aid is not adopted. Given that 80% of higher rate gift aid tax relief is currently claimed the composite rate would destroy this incentive and therefore much high-level giving. As a counter, we would recommend that instead light touch steps are introduced to ensure that the remaining 20% is actively sought out. — That the system of valuing benefits within Gift Aid is clarified, possibly through a clearer “split payment” system or the abolition of the “aggregate value test.” — That appropriate changes are made to enable philanthropists to create light touch private foundations to help facilitate their philanthropy. — That tax breaks should be introduced on the gifts of works of art, heritage, or archive items to the nation. — That the US model of Lifetime Legacies (or Charity Gift Annuities) be adapted and then adopted in the UK. As the only representative body of the arts on the Treasury tax group on charitable giving we are proposing our tax recommendations on behalf of the sector.

What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale? 4.1 Arts & Business argues that there is a need to increase the final third or earned-income element of the arts funding ecology. Arts organisations need to work harder to “sweat their assets” as well as collaborating together when possible to reduce costs and maximise access to audiences and new income streams. 4.2 Mergers and acquisitions are just two ways to reduce duplication and make economies of scale for instance joining back office functions and structures is a particularly sound strategy—according to Arts & Business’ most recent Market Trends survey (August 2010) with 250 arts organisations representative of the whole sector, 32.1% are considering merging/ collaborating with other similar organisations and 13% are already merging/collaborating with other similar organisations. This exemplifies that a number of arts organisations are proactive in this area and are already considering how this can best be done. Two immediate examples. 4.2.1 The museums model of hub and spoke organisations in the regions, funded via MLA’s “Renaissance in the Regions” programme. 4.2.2 And joint purchasing models such as the consortium of London museums which has negotiated a bulk purchase deal for electricity. 4.3 Underlying this is our need as a sector to work harder to understand the relationship between public and private funding. The production of the Woman in Black took £5k subsidy and turned it into £8 million of Treasury income after becoming a blockbuster West End hit. 4.4 The best of the arts world is formed through ongoing partnerships with business which deliver private funding—but also the business methods, planning and ethos of the private sector. Bridging the divide between the two has been one of Arts & Business’s key priorities for the past 34 years. 4.5 A further highly commended example of this partnership in action is that existing between Lanson Communications and HighTide Theatre Company. Since 2008, Lansons Communications and HighTide have enjoyed a relationship that is unique between an arts charity and business. Lansons Communications donate to HighTide office space, IT support, meeting rooms, and reception services. What the charity saves annually on administrative overheads is reallocated towards achieving its charitable aims through the production of more theatre. Lansons also contribute business planning and strategy services.

The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council? 5.1 We believe the concept of so called “arms-length” bodies should be reviewed. This was a proposition introduced to prevent political interference in the arts when the Arts Council of Great Britain was established in 1946. 5.2 Our Forum for Arts, Culture & Heritage agreed that the swift and stark announcements of the abolition of the Museums, Archives and Libraries Council (MLA) and the UK Film Council were decisions taken without an apparent clear plan for understanding which functions should simply cease and which should be absorbed by other organisations. Arts & Business believes in the interests of transparency and accountability more consultation with the arts and creative industries is need before decisions like this are taken. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level? Whether there need to be more Government incentives to encourage private donations? 6.1 At present individuals give £363 million to the cultural sector. 48% of this is paid as membership to Friends schemes and other structured giving programmes. 18% is in the form of legacies and the remaining 34% are donations. Businesses currently contribute around £157 million, mostly through sponsorship, and according to an Arts & Business survey in November 2009 with key businesses already working with the arts; by 2013 all respondents expect to either increase or maintain their levels of business investment to the arts.

6.2 Looking at the UK wide-picture, cultural organisations outside of London are only raising 20% of income from philanthropy. We argued in at point that 2.6 that regional organisations raise 50% of the total business support given to the arts in this country. This year, cultural organisations outside of London were responsible for 46% of the nominations for The Prince of Wales Medal for Arts Philanthropy, which celebrates cultural philanthropists of national significance.

6.3.1 Arts & Business believes that this form of support from individuals will be able to play an increasingly important role in the future funding of the cultural sector. However, this will only happen if the cultural sector is seen as a success. Individuals are unlikely to support organisations seen as failing—even if that failure is solely the result of a cut of its public funding. Indeed the cultural sector must become better able at asking for money and maintaining their subsequent relationships with their donors (“donor care”).

6.3.2 Vital parts of this much-heralded “American style of philanthropy” include effective donor care, a tax environment that continues to send the important message that giving money to charity is a good thing and a society which better encourages and celebrates those who choose to support the arts at whatever level.

6.3.3 Arts & Business will achieve this through:

— The Prince of Wales Medal for Arts Philanthropy given to five nominated couples or individuals this year.

— Celebrating people across the UK who support their local cultural organisations through the Cultural Champions programme.

— Sharing best practice through case studies and events.

— Training cultural fundraisers in the skills they need to develop this income (see appendix).

— Ensuring both cultural organisations and their donors understand—and take—full advantage of the tax incentives available.

— Undertaking targeted impactful research to determine how best these organisations can develop income from individuals.

6.4 “The Arts & Business Cultural Champions initiative provides not only a real sense of pride for those already passionately involved and being recognised as champions by the scheme, it also helps others open their eyes to the big and small ways they too can support their local arts and cultural organisations. Whether it’s giving their time, money or skills, anything that gets more people involved, particularly in the current recessionary environment, is a win for the arts organisations and the communities they belong to”.

Simon Inch, Cultural Champion for the Tobacco Factory Theatre, Bristol

The Big Society “If the Big Society means we aspire to create more civilised places where humanity prevails, and the individual spirit thrives, then artistic and cultural activity is not just indispensible, it must sit at the core, and national and local government must work together in one cause. Sir Andrew Motion—15 July 2010.

7.1 Arts organisations are great community assets and place-makers uniquely able to bring together the community and facilitate social change.

7.2 They also can provide an alternative to the Big State by providing opportunities for work, commercial development, the creation of social enterprises using the arts as a conduit back into education particularly for hard to reach NEETS and volunteering opportunities for the wider locality.

7.3 Arts centres should be further encouraged to combine their highly sought after attributes: venue, form, appeal to wide sections of the community as well as good links to local businesses and patrons both high net worth and medium level givers so that they are recognised as key elements of the Big Society initiative. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations? Whether the policy guidelines for National Lottery funding need to be reviewed? 8.1 Arts & Business welcomes the recent consultation on the National Lottery Distribution Fund changes which will lead to at least £50 million a year extra into the arts by 2012. 8.2 In fact Arts & Business would support the proposal to increase the share for the arts to 20% to be made by 2011 rather than the 18% proposed by DCMS thus bringing in an additional £50 million a year to the arts in 2011. We have argued that this funding should be used by the Arts Council—in partnership with Arts & Business to establish challenge funds to motivate further regional individual giving around the country—much in the style of The Big Arts Give.

APPENDIX AReminder of Arts &Business’Value: — For every £1 received by A&B, we help lever between £4 to £6 from the private sector. — Total private sector income for A&B arts members is 24% to 30% higher than for non-members. — Equates to an additional £65 million to £79 million received by A&B arts members over and above that received by non-members in 2008–09. — RFO non-A&B arts members generate only 1/12th of the private sector income of A&B arts members.

Arts &Business Key Facts: As the leading agency training the arts community: — Arts & Business delivered 965 free advice sessions to the cultural sector in 2009–10, an increase of !21% on 797 delivered in 2008–09. — In 2009–10 we ran 197 training sessions for 2,166 participants; an increase of !185% and !177% respectively on previous year when we ran 69 sessions for 782 participants—that equates to an almost three-fold increase in training participants. — The effectiveness of Arts & Business training is rated at 93% by participants. September 2010

Written evidence submitted by The Heritage Alliance (arts 76) Summary — Heritage-led tourism alone generates a return four times as great as the whole DCMS budget and many, many times greater than central government expenditure on heritage. — Heritage missed out on the “golden age” for the arts and culture. DCMS funding for heritage fell by 19% 2000–10 while spending on arts rose by 42%. — The Heritage Alliance recommends a proportionate approach to Departmental public spending cuts given that DCMS is the Government’s second smallest Department and that much of the heritage economy lies outside DCMS control. — The Heritage Alliance recommends focusing this comparatively small public expenditure judiciously and creatively: — to support the broader heritage sector to deliver economic, environmental, social and educational benefits; and — to attract public, commercial and private investment as well as civil society action.

Introduction The Heritage Alliance is the largest coalition of non-government heritage interests in England. Together its members own, manage and care for the vast majority of England’s heritage. Established in 2002 by the voluntary heritage groups themselves, the Alliance brings together 83 major organisations from specialist advisers, practitioners and managers, volunteers and owners, to national funding bodies and organisations leading regeneration and access projects. Their specialist knowledge and expertise across a huge range of issues is a highly valuable national resource, much of which is contributed on a voluntary basis for public benefit. They are supported in turn by thousands of local groups and around five million members, with a huge volunteer input—some 485,000 a year. The Heritage Alliance believes that our heritage offers a firm foundation for economic and social recovery: Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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— Heritage tourism contributes £20.6 billion to GDP a year supporting a total of 466,000 jobs.38 The Prime Minister acknowledged that “Heritage is a key reason why people come to Britain; we should play it up, not play it down.” (Serpentine Gallery, 12 August 2010) — Increased visitor numbers have mitigated the impact of the recession even at this stage in the economic cycle, and tourism is expected to grow by 3.5% between 2009–18—well above the general prospects for growth.39 — The Lake District initiative found that every £1 expenditure on farm building repairs resulted in a total output of £2.49.40 — On the basis of repair costs over 30 years, the cost of repairing a typical Victorian terraced house is between 40 and 60% cheaper than replacing it.41 — Local businesses positively rate historic environment regeneration schemes for raising pride in their local area, enhancing community identity and encouraging more people to come to the area.42 — In a survey of historic environment regeneration areas, over 90% of people who lived and worked locally agreed (and over 30% strongly agreed) that these projects had improved their quality of life.43 — Our heritage continues to inspire: the number of voluntary archaeology groups active in the UK has doubled since 1987 representing over 200,000 individuals44 and across England there are hundreds of thousands of volunteers actively engaged in caring for their local historic environment which adds to the public sense of wellbeing. — four out of five young people aged 11–14 say that knowing more about buildings and places around them makes them and their peers behave better.45

Inquiry Questions 1. What impact recent, and future, spending cuts from central and local Government will have on the arts and heritage at a national and local level 1. The main sources of heritage funding are: — Private investment by owners/managers, including the development/tourist industry, in maintenance as well as regeneration and enhancement programmes, and investigation and interpretation work to enhance public benefit. — The National Lottery, specifically HLF funding but also Arts Council funding and BIG for community projects; National Heritage Memorial Fund. — Private philanthropy, including independent trusts and foundations; non financial philanthropy— in-kind donations and volunteering. — Central government, primarily through DCMS, CLG, and DEFRA, their agencies and sponsored bodies; local government and partnerships. 2. The DCMS budget of £5.3 billion for 2008–09 amounted to 0.8 % of total government spending, and the architecture and history element is just 4% of that (£0.23 billion). As much of the heritage economy operates outside DCMS direct control, any reduction in funding will have a much greater impact than this tiny figure suggests. 3. DCMS funding to English Heritage (EH) supports the heritage protection regime and the wider heritage industry to achieve public policy objectives. DCMS figures show EH funding was cut even when DCMS itself received above inflation increases and when other DCMS Arms Length Bodies received increases (Arts Council England (!41%), Sport England (!182%), Museums, Libraries and Archives Council (!199%). So heritage missed out on the “golden age” for the arts and culture. 4. Since 1997, EH has received grant settlements of below inflation, resulting in a real terms reduction of £130 million. As a result, past economies have squeezed the grants made by EH, now £32.3 million (2009–10). Heritage projects are rarely wholly publicly funded with most forms of grants attracting private funding, usually much more than the grant itself. They support local businesses not only in the repair and development stage but subsequently by attracting other investors in turn so the impact of cutting EH grants is far greater than the sums disbursed.

38 HLF/VisitBritain: investing in Success, March 2010. 39 Deloitte and Oxford Economics; The economic contribution of the visitor economy: UK and the nations 2010. 40 EH etc, Building Value: public benefits of historic farm building repair in the Lake District, 2005. 41 HM Government: the Government’s Statement on the Historic Environment for England 2010. 42 Amion/Locum Consulting/English Heritage (unpublished) : The impact of historic environment regeneration, June 2010. 43 Amion/ Locum Consulting/English Heritage (unpublished): The impact of historic environment regeneration, June 2010. 44 CBA: Community Archaeology in the UK, 2010. 45 Engaging Places: Unforgettable Lessons, July 2010. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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5. Previous cuts may have been partly masked by the property boom, but the legacy of the recession together with the increase in VAT from 2011 is going to put enormous strain on this remaining resource. Cutting the few funds available to historic fabric, especially those “at risk”, regardless of ownership, will make the sector even more heavily dependent on HLF project-orientated funding which is not assured after 2019 and which is not available to capital projects in the private sector.

Cutting English Heritage support to buildings on the Heritage at Risk register by 40% would have resulted in the loss of up to 460 Grade I and II* buildings during the period 1999–2010.

6. Executive capacity is also under scrutiny. Our recommendations for English Heritage’s strategic priorities 2010–15 identified its key responsibilities as being the formal adviser to government and in supporting the sector through grant giving, advocacy and professional expert advice. For English Heritage to do more for less, it needed to work more effectively in partnership. We recommended that English Heritage would be wise to invest strategically in partnership working, in order to deliver more of its objectives in the longer term. DCMS operates through a range of smaller NDPBs. These, frozen like English Heritage under the last government, have already taken a 3% cut this year and are vigorously pursuing independent revenue. If cut too far, too soon, they will not have the capacity to develop alternative income streams.

7. Turning to non DCMS funding, one significant source of heritage funding is the Common Agricultural Policy (CAP) for the way it affects countryside management. DEFRA funding for heritage within the £3.9 billion Environmental Stewardship Scheme 2007–13 is essential in drawing down the European commitment and stimulating private sector funding. It illustrates again that without government intervention, some significant sources of funding could be put out of reach.

Without the dedicated £8 million per annum funding for traditional farm buildings under Rural Development Programme for England (RDPE), it is estimated that 300 buildings per annum and, over the seven years of the RDPE (2007–13), 2100 buildings would become derelict through lack of maintenance, to the detriment of our historic landscapes and their economies.

8. Local government involvement in heritage—non-statutory leisure and cultural services as well as planning and historic environment services—is absolutely critical in generating the local identity and civic responsibility that are the twin foundations of localism. So much is in a state of flux that predictions are difficult but already we are seeing plans for across the board redundancies and closures in non statutory cultural resources such as museums.

9. Regular research into the provision of historic environment staff in local authorities has been carried out by the Institute of Historic Building Conservation (IHBC) and ALGAO with English Heritage.

The IHBC survey of building conservation staff shows a continued and dramatic decline from 2006 to date. In 14 months from November 2009 to January 2010 the numbers of building conservation staff in local authorities has declined by 6.9%. This decline in staffing resource is almost double the rate of loss over two years between 2006–08 and highlights the negative impact local authority cuts are already having on the protection of our heritage. Current reports from Local Authorities show that this trend is continuing even more steeply.

Only with a trained workforce can we ensure the historic environment attracts that all-important inward investment through the planning system. We urge the case for proper resourcing for historic environment services in the forthcoming review of local authority finance, and secondly for DCMS and English Heritage to have sufficient resources to work alongside CLG in integrating heritage protection and its resourcing within the new planning regime. It is essential that local authorities have the appropriate resources to inform and operate the planning system for example through Planning Policy Statement 5 (PPS5) to ensure that full public benefits are unlocked.

10. Central and local government funding affects non government heritage bodies, some of whom— including The Heritage Alliance—benefit from EH’s National Capacity Building programme. National and local groups deliver especially strongly on the two main strands of the Big Society concept—social action and community empowerment. The grassroots nature of most heritage organisations means they are an important part of civil society,well used to making small amounts of government money galvanise voluntary action and philanthropy to transform their communities. The heritage sector can point to the Building Preservation Trust movement over the past 30 years as leading the way in mobilising the Big Society. For many of these community groups, local authority support—valuable in itself—unlocks other sources of funding.

11. Big Society can’t just be about cutting funding and expecting others to deliver projects instead of Government. Targeted investment in partnerships with non-government bodies stimulates national and local activity, endorses the shift towards civic responsibility and is a legitimate subject for public subsidy. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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2. What (arts) heritage organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale. Non government heritage sector 12. Given the diverse interests and huge voluntary input in the heritage movement, co-ordination is more appropriate than amalgamation. There are successful mergers, shared offices and hubs, but the majority of the Alliance’s 83 members and their local organisations are sustained by voluntary effort where diversity and autonomy is an asset. 13. Most generic groups have a national umbrella body. There are a number of sub-sectoral forums such as the Joint Committee of National Amenity Societies, The Archaeology Forum and Placesofworshipwthealliance that work together to reduce duplication of effort and make economies of scale. The Historic Environment Forum (previously known as HEREC) the overarching forum, brings together government and non government interests. The History Matters Campaign in 2006 demonstrated a novel national partnership led by English Heritage, Heritage Lottery Fund, The Heritage Alliance, the National Trust and Historic Houses Association to celebrate public enthusiasm for our heritage. Due at least in part to the Alliance’s success since 2002 in promoting collaborative working, heritage organisations inside and outside the public realm are working together far more closely than ever before.

Public heritage bodies 14. In reconfiguring our public heritage bodies the aim should always be to optimise outcomes rather than necessarily preserve the status quo. Better co-ordination between Government Departments responsible for heritage is something The Heritage Alliance has been calling for since 2004. The Secretary of State Jeremy Hunt told us in March 2010 that once in government he would ensure regular ministerial meetings between DEFRA, DCMS and CLG. It is vital that such a small Department as DCMS has the expertise and capacity to integrate heritage interests across other Government Departments. 15. The “agencies of place”—English Heritage, CABE and Natural England—might explore efficiencies by working more closely together. An amalgamation of English Heritage and the Heritage Lottery Fund seems somewhat mismatched on grounds of geography and their different remits (historic environment/ heritage including biodiversity) but the two most critical issues are: — their objectives—sustaining the historic fabric, support to infrastructure, property manager (EH) compared with fixed-term project funding (HLF); and — public money is not the same as government money. Whatever firewalls might be invoked, the real danger is of eroding the independence of HLF: indeed, already prevalent is the idea, put forward by two Government Ministers, that HLF with its enhanced funding after 2012 can somehow compensate for the loss of the Government’s Listed Places of Worship Grant Scheme. Any such convergence between lottery funds and the Government’s regulatory functions and grants should be avoided. Any review of relevant public bodies should always include proper consultation with the sector and an assessment of the impact of previous organisational change.

3. What level of public subsidy for the arts and heritage is necessary and sustainable 16. Public subsidy, direct and indirect, comes via many channels. There is no global figure for public and private investment in our heritage so what we are examining here is more a new balance between state, market and civil society. A “funding follows function” approach is more likely to result in a sustainable solution than salami slicing all budgets.

4. Whether the current system, and structure, of funding distribution is the right one 17. We welcome the intention to restore the original shares in the National Lottery, but the Heritage Lottery Fund alone cannot solve the national deficit. Similarly philanthropy is not a magic bullet, nor can civil society take on government functions without additional resources. A mixed economy is the most sustainable model, where Government accepts responsibility through funding as well as legislation and policy. 18. Public subsidy comes under two broad categories:

Direct funding: — Regulatory powers: operating the heritage protection system with related advice; — Providing and encouraging the necessary evidence base; and — Specialist capability to work with other government departments/agencies and partners on legislation, policy and funding. Enabling funding that supports others—private investors, owners, philanthropists, the non government heritage movement—to achieve public policy outcomes including Big Society as well as cultural and economic objectives: — Providing incentives for action: grants and fiscal incentives; and Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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— Support for implementation. The Alliance recommends a shift from direct funding, with Government retaining unique, statutory responsibilities but avoiding duplicating front line services, towards a more enabling framework, including tax incentives as well as subsidy, so that more is delivered by a mixed economy in the longer term. 19. EH is already in discussion with heritage groups over transferring certain functions. Our difficulty is that although we can perhaps deliver services more cheaply than our government colleagues, we can not take on additional roles without financial support which means the efficiency savings are relatively small. Secondly there are certain functions—such as policy guidance, research and evaluation—that require formal government status and are simply inappropriate for a non government organisation.

5. What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations 20. The current proposal to restore the lottery to the original good causes by 2012 could give HLF an extra £50 million a year. This welcome uplift will conserve and enhance more of our heritage for social and economic benefit. It will increase public access and understanding and help sustain traditional and specialist conservation skills. It will generate social capital by supporting the professional development of the not-for- profit sector; increasing the level of self-help by enabling more voluntary sector organisations to rescue historic buildings and to find viable, new, community, uses for them; develop community engagement skills with emphasis on underrepresented groups and areas; and increase volunteering opportunities and support to community organisers. It is also likely to bring not-for-profit heritage organisations into innovative partnerships with private and public bodies. 21. We are, however, concerned that the related proposal to cap the Lottery distributors’ administrative costs at 5% could lead to fewer larger grants rather than the smaller grants, which are proportionately more costly to administer but which “grow” the voluntary and community sector. We also value the HLF professional research function which enables it to review the social and economic impacts of projects undertaken by a diverse range of recipients. One such figure is the £20.6 billion that heritage-led tourism generates. Other figures relate specifically to the voluntary and community sector: again HLF uniquely has the data and professional expertise to extract the community benefits of heritage investment.

6. Whether the policy guidelines for National Lottery funding need to be reviewed 22. Increased lottery funding, however timely, is not a universal panacea. Lottery money should not be allowed to become a substitute for funding that would normally fall to mainstream Government spending and we would welcome Government commitment on this. To have a clear idea of the make-up of all Lottery Distributors’ grant-giving and the proportion going to the voluntary and community sector, it would be helpful to see this figure published annually. 23. Much of our heritage is in private hands. Sustaining the quality of place—the villages and streetscapes, the gardens and historic landscapes on public view—is at the discretion of many private owners, who derive no direct financial return. We accept that the HLF does not usually grant aid private owners but it may be timely, subject to national consultation, to review the eligibility criteria.

7. The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council 24. Museums are a key route for the public to access interpretations of our heritage, and house many important heritage collections. With the abolition of the MLA there needs to be an appropriate body tasked with providing strategic leadership for museums. Its loss creates uncertainty about programmes and jobs funded through the Renaissance programme. We would like to see an urgent clarification of the future of the Portable Antiquities Scheme.

8. Whether businesses and philanthropists can play a long-term role in funding (arts) heritage at a national and local level 25. We believe that businesses and philanthropists can play a long term role in funding heritage but the different drivers for philanthropy for heritage and arts should be considered when devising incentives. The long gestation of capital projects, and the nature of maintenance and access work compared with say productions and exhibitions, may not be as attractive to some philanthropists who want to see a more instant return. “Red carpet” opening nights, concentrated in London, make attractive media coverage for arts sponsors. Projects may be more attractive to private funders than say capacity building, even though this can then unlock much more “in kind” support through the voluntary sector. In terms of promoting Big Society therefore, Government might explore incentives for this form of philanthropy. Individuals too spend taxed income on their property, their cottage or vintage motorbike—not always but often—regardless of commercial return. That sense of stewardship—for public benefit—is a form of philanthropy that falls outside the usual interpretation. Accordingly, different motives need better refined incentives. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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26. There is of course a significant financial contribution made by the development sector through PPS5 which enables an increased understanding of the historic environment and provides increasing opportunities for public engagement. In considering further reform of the planning system it will be important that the principles espoused in the PPS are supported to ensure that this investment continues.

9. Whether there need to be more Government incentives to encourage private donations 27. We support Gift Aid on donations and have taken part in several initiatives to help improve take-up. We support an extension of the Acceptance in Lieu scheme to include some form of lifetime giving for example to keep important artefacts in situ. Ways of making Heritage Maintenance Funds more attractive in order to support the conservation of historic houses open to the public are put forward by the Historic Houses Association. Adjustments to these schemes could safeguard some outstanding historic properties and their contents.

28. It may be that legacies are a significant form of donation in the heritage world. A form of lifetime giving could give the donor the benefit of an income during their life time (as well as appropriate recognition) and furthermore give the recipient charity an indication of future donations. This might have widespread appeal, and we recommend that this be considered in a review of Inheritance Tax.

10. The Committee will also examine other areas of interest that are raised during the course of its inquiry 29. VAT at 20% from 2011 will add a fifth to the cost of repairs and maintenance, adding to pressure on public and private funds yet the possibility that the UK might take up the EU option of reducing VAT to 5% on repair and renovation to private dwellings seems remote in the present political climate. The Alliance has constantly campaigned for a reduction in VAT arguing that the dynamic effect of a reduction would more than compensate in terms of jobs created and welfare benefits saved.

30. The Alliance and its places of worship grouping have campaigned with others to raise awareness of the value of the Listed Places of Worship Grant scheme which is due to end in March 2011. The loss of this scheme would be a serious blow to those struggling to keep these landmark buildings in community use, not only in financial terms but also in recognition of heroic efforts. September 2010

Written evidence submitted by Arts Council England (arts 77) 1. Arts Council England works to get great art to everyone by creating the conditions for the making of excellent art and ensuring that as many people as possible can experience the art that is produced. We support a range of artistic activities from theatre to music, literature to dance, photography to digital art, arts festivals to crafts. We believe that support of the arts is crucial to our prosperity as a nation and the wellbeing of its citizens.

2. Arts Council England has two funding streams—Grant-in-Aid, and proceeds from the National Lottery. The bulk of our Grant-in-Aid is currently invested in a portfolio of around 880 Regularly Funded Organisations (RFOs), which will receive £1.03 billion between 2008–11. RFOs include large national organisations such as the Royal Shakespeare Company and English National Opera, high profile regional organisations such as Nottingham Contemporary or Sage Gateshead, and smaller organisations such as the British Federation of Brass Bands.

3. We also invest Grant-in-Aid funding in new opportunities for the development of the arts, through programmes such as Take it Away,which provides interest free loans for the purchase of musical instruments, and the Cultural Leadership Programme, which supports the development of leadership skills for arts organisations.

4. Lottery money is invested in grass roots arts projects through our Grants for the Arts programme. The minimum you can apply for is £1,000. Grants for the Arts supports projects that engage people in England in arts activities, and help artists and arts organisations in England to make art. It is the main way we support experimentation and invest in new artists and organisations. In the period 2008–11, £154 million of Lottery investment will also see the completion of several big capital projects and some major new arts spaces. Recently completed projects include Corby Cube and Dance East in Ipswich; to come are the Royal Shakespeare Theatre in Stratford and the Visual Arts Facility in Colchester.

5. We are currently modelling for cuts of 25–30%. Any cuts need to be spread intelligently over four years so that they can be managed in the best way as sudden, large cuts will cause damage that will take many years to recover from. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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What impact recent, and future, spending cuts from central and local Government will have on the arts and heritage at a national and local level What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations 6. On 24 May 2010, the Department for Culture, Media & Sport cut the Arts Council’s 2010–11 budget by £19 million. This cut was in addition to an earlier reduction of £4 million, meaning that our 2010–11 budget was reduced by a total of £23 million. 7. We worked hard to ensure that cuts to our RFOs was limited to 0.5% but this relatively minimal reduction was only made possible by the exceptional use of £9 million of our historic reserves which we had previously been unable to access. Had we not been able to use these reserves, we would have been forced to pass on a 3% cut to our RFOs. As part of the deal to allow us to use our reserves in this way, £7 million was given to the Department. £5 million will be returned to our baseline next year. 8. In order to meet this budget reduction we also had to make additional cuts to our two highest funded organisations not directly producing art (Arts & Business; Culture Creativity & Education); make an additional £0.4 million cut to our operating costs (bringing savings on operating costs to a total of £6.9 million this year); postpone a major public engagement project, cut our audience development plans, and cut funds for partnership working with local authorities and the public sector. 9. Future cuts will have a far greater impact. Arts Council England has been asked to model 25–30% cuts over four years and we have asked RFOs to model how they would cope with a 10% cut next year. This assumes an overall cut to us in Year 1 of 15%, extrapolated from overall Treasury figures. We hope it will not be as much as this. A 30% cut would, if passed on equally, amount to a reduction in the Arts Council’s budget for regularly funded organisations of £134 million a year. 10. Combined with a reduction in funding from local authorities (a significant funder of the arts), rising VAT and a pressure on earned income and private giving, many arts organisations large and small will be lost. Even those that manage to survive what could be a “perfect storm” may find it difficult to produce the work to the quality or on the same scale that they have done previously. Evidence from previous rounds of cuts suggests that less ambitious work loses audience interest and leads to a spiral of decline in artistic standards. 11. This scaling back of arts provision and closure of arts organisations will compromise the ability for people to experience the arts. The closure of arts organisations will hit local areas hard where the arts provide a focus for tourism, education, community engagement and creative industry. 12. Cutting back on arts provision at a local level will undermine the bedrock of support for the creative economy (the fastest growing economy in the UK). The Work Foundation has demonstrated how the publicly funded cultural sector in this country supports the commercial creative sector. This is perhaps best illustrated in the relationship between West End or other commercial successes and the skills of actors, directors and those involved in production developed in the public sector. 13. In response to an anticipated reduction in Grant-in-Aid and in keeping with our new 10 year strategic framework, we have been looking at introducing new funding programmes that will be phased in to replace existing arrangements. These programmes will better reflect the different kinds of relationship we have with funded organisations, allow clearer focus on priorities and will free up opportunities for new entrants and new ways of working. This will almost certainly result in fewer organisations supported overall. 14. We are presently still in the process of developing guidance and criteria for the new programmes and want to create funding mechanisms that will work flexibly, allowing us to make best use of all our sources of income (Lottery funded programmes must be application- based so we expect to run some kind of application process for the new programmes). The new plans will be in place from April 2012. 15. Beyond cuts to arts organisations, Arts Council England would also need to cut back on the strategic projects it manages. This would limit our crucial developmental role, and inhibit our capacity to lead, support and develop the sector. Projects like the Cultural Leadership Programme, Artsmark and the Cultural Olympiad are examples of projects currently funded by us on a strategic basis. Cuts to these programmes will have a longer term impact on the sustainability and development of the sector. 16. The way in which the cuts are phased will be important. If changes to the Lottery distribution go ahead, the arts should see an increase in Lottery funding. However, Lottery cannot substitute for grant-in- aid funding under the “additionality” rule laid down by the Major Government. Furthermore, any increase in Lottery funding will only be phased in over time. Any increase in Lottery funding will therefore not mitigate the impact of grant-in-aid cuts in the early years, and Lottery cannot substitute for Grant-in-Aid funding because of the important principle of “additionality”. Over the whole four year period the effect of a 25% cut would be £112 million; extra money resulting from changing Lottery shares will deliver an extra £40 million to Arts Council England. 17. Any cuts need to be spread intelligently over four years so that they can be managed in the best way. A dramatic cut in funding in 2011–12 would hit organisations hardest in the Olympic year. Sudden, large cuts which are not managed properly will cause damage that will take many years to recover from, as our experience of the Stabilisation Programme shows us. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale 18. Working together can create benefits and opportunities for organisations that collaborate, and there are a number of arts organisations who already do so, for example the proposed merger between Cornerhouse and Green Room in Manchester, Newcastle and Gateshead Cultural Venues Forum (NGCVF), Turning Point Networks, VALE and LARC in Liverpool. 19. We are actively encouraging our RFOs to develop sharing and partnership scheme but our experience is that these projects work best when Arts Council England or another interested party makes funds available and delegates the decision on exactly what is done to the organisations concerned. This brings them to the table in a way that is often not possible otherwise. Invariably, conversations become easier over time and the entities explore their similarities and find new ways of working together. This provides a clear way in which we could encourage further ways of working together—allocate funds for collaborative projects with a general aim of finding new ways to make partnership working effective. 20. We do however need to be open about the challenges that organisations can face. — Trustees of funded organisations have a legal obligation to their organisations not to the sector or to government efficiency agendas. Trustees need to be confident that the independence of their organisation is not under threat and that savings can help them to achieve their objectives more efficiently. — Collaborative projects take time to come to fruition, since there is often distrust between entities who traditionally see themselves as rivals. — Areas where collaboration could be most productive and create the greatest efficiencies are often the source of greatest rivalry. This is particularly common for things like marketing or fundraising, where databases are seen as assets, but also for things like estate services, since the building is often synonymous with the organisation, and so contracting out its management is anathema. — Finance is often cited as a potential saving. Our experience is that organisations are generally very lean in this area, frequently having only a book keeper and a more senior member of staff who is partly responsible for finance in addition to other things. — There is always an up-front cost involved with shared services, since reorganisation and merger are complex legal operations. This means consultants and lawyers are required. Often the savings are marginal, and so the shared work only makes a saving over time. 21. There are however many examples of how our RFOs are thinking creatively to produce cost and efficiency savings. As part of the successful rescue programme, English National Opera outsourced workshops in line with many arts organisations. Where they co-produce, eg with US partners, their new contracted out arrangements are more cost-effective and sets are made in the UK. We are establishing a new Organisation Development function to make sure RFOs have access to the best expertise and advice in this area.

What level of public subsidy for the arts and heritage is necessary and sustainable 22. The arts sector recognises the need to contribute to the economic recovery—and has already sustained significant cuts (£112.5 million of Arts Council Lottery funding has been diverted to the Olympics, in addition to the £23 million in-year Grant-in-aid cuts). Our research suggests a tipping point of 10–15% for most arts organisations where current operating models will not be sustainable, leading to less original work, or in some cases closure. 23. For every £1 that the Arts Council invests, an additional £2 is generated from private and commercial sources, totalling £3 income. At a local level our investment can lever five times its worth. Arts Council investment therefore acts as the stamp of approval that draws in funding from the private sector and philanthropic sources. This mixed economy model in which public subsidy contributes roughly one-third. A sudden, or drastic, change to that level of support would threaten not only the quality of artistic life in England but also the contribution made by the arts to the future prosperity and the positive image of the country abroad.

Whether the current system, and structure, of funding distribution is the right one 24. There has been a broad consensus, since Arts Council England’s inception, that the arts should be supported through an arm’s length model. The principal virtues of this include protecting the artist’s freedom of expression from political interference, enabling peer experts to make decisions about funding and policy and allowing the criteria for funding to be focused on considerations of quality rather than other extraneous factors. We think the present structure with funds distributed by a non-governmental body is the right one but we would like a new expression of the Arms Length Principle that is re-imagined for modern times—one that verifies and realises the success of the arrangement and also recognises the existence of a Department of State. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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25. Arts Council England is committed to ensuring that public funds are used in the most cost effective way to deliver the greatest public value. In addition, we use our expertise to support artists and to make strategic interventions that build the capacity of the sector and ensure that everyone has access to the very best of the arts. 26. The Arts Council recently consulted on the 10-year strategic framework that will underpin our future investment decisions and strategic interventions. Consultation responses revealed that there is general agreement and support for our vision and proposed goals and that our framework will provide a powerful focus for the Arts Council and its partners over the coming decade. 27. To achieve this we have evolved into an efficient and outward looking organisation. We have introduced new systems of evaluation and artistic assessment and will introduce international Peer Review to National Bodies. We will look at how we ensure what we do is as transparent a way as possible. We will continue to drive down costs while maintaining the quality and effectiveness of our advice, support and expertise. Since 1 April the Arts Council’s overall operating costs are down to 6.6% (reduced from 11% in 2001–02), and of that only 3% is spent on administrative costs.

Whether the policy guidelines for National Lottery funding need to be reviewed 28. The present policy guidelines have allowed Arts Council England to support the arts sector in a flexible manner and to help achieve great art for everyone. The tone and scope of the current directions are broadly right—we would not see a great deal of benefit to changing them. We dully the ambition to keep a clear separation between the project work of grant-in-aid and Lottery money.

The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council 29. It is hard to comment on detail at this stage. We are currently in discussion with DCMS about how the current work of the UK Film Council and the MLA can be supported in the future. We believe it is important not to lose the expert focus of an arms-length body for the sake of minimal cost savings.

Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level Whether there need to be more Government incentives to encourage private donations 30. Businesses and philanthropists already do play a role in funding the arts at both a national and local level, and have always done so. Arts Council believes it may be possible for private sources of funding to increase in the future. We are currently conducting a short review of this area to see what role Arts Council and its funded bodies can be doing to support this goal, especially at a time when public funding will be reducing. As part of this review we have been conducting an informal consultation over the summer in which we have interviewed arts organisations about their needs and challenges. These have included a range of big and small organisations, based in and outside of London. 31. It is clear that creating a step-change will, as the Government itself has acknowledged, take many years and our strategy in this area will reflect this, looking at both short and long term measures to increase private giving. It will very much depend on a long term change in the culture of giving. 32. Whilst private funding is an extremely valuable source of income for the arts, we would stress the value of the mixed economy model in the UK, and the benefits this approach brings. This includes the relative stability of plural funding streams for the arts that does not exist when there is a concentrated reliance on either public or private funding sources, as is true in the European and US models respectively. Public funding also attracts private donations to the arts, and any successful strategy to increase private giving needs to acknowledge this pattern. Private giving will not replace Arts Council England public funding. 33. One thing is clear: a move to a US system should not be the aim, rather we should strengthen the private element of the mixed economy. Our consultation has confirmed that organisations outside London or other established metropolitan centres face very different challenges. This reflects a number of different circumstances including: — the reputational pull of nationally or regionally significant companies compared with more locally routed organisations; and — the different micro-economies found in the English regions compared to those found in our larger economic centres, which define the potential pool of funding available to organisations. 34. Smaller non-metropolitan organisations therefore face challenges in fundraising. Most require very different types of support. It is also clear that these organisations should expect to achieve a different level of private funding. We are looking at what type of support is most appropriate for these organisations, including the role that larger regionally significant organisations can play in supporting smaller parts of the infrastructure, and whether there are new avenues of giving which could help smaller organisations. 35. There are two areas in which Government incentives would improve levels of private giving to the arts. For the small to medium sized entities we believe the simplification of gift aid would be the most effective. Helpful changes would include establishing it as an “opt-out” rather than “opt-in” scheme; Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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changes to donor benefits; as well as simplification of the claiming process for larger gifts. For larger organisations in the business of attracting larger scale one-off gifts it would be beneficial so that it is possible for gifts of either funds or assets to be offset against tax in the donor’s lifetime. 36. We also believe that increased recognition of donations at the appropriate level of Government would provide an increased incentive for donors, and the Arts Council would be happy to help play its part in helping to identify individuals or organisations in a more comprehensive way. Those we have consulted in the sector have said that recognition could be improved through more systematic and regular use of the existing honours system, as well as through increased recognition by Government, either through the use of receptions at Number 10 or 11, or through thank you letters or meetings. September 2010

Written evidence submitted by the Museums, Libraries and Archives Council (MLA) (arts 98) Introduction 1. MLA welcomes the opportunity to feed into the Committee’s inquiry. Our submission highlights in main our concerns and aspirations for the future funding of museums, libraries and archives. 2. On the 26 July the Secretary of State for Culture Media and Sport the Rt Hon Jeremy Hunt announced as part of the Government’s Arms Length Review that the MLA would be abolished to focus efforts on front-line services, with selected functions transferred to other organisations. We are working with DCMS and other bodies on the details and timescales for these changes and look to the outcome of the Spending Review in October. In the meantime the MLA is committed to being a source of robust advocacy for museums, libraries and archives and for the people and places that depend upon them, and for assisting a smooth transition to the best new arrangements achievable. 3. It is the firm intention of the MLA Board to communicate the advantages of a coherent and integrated approach to the leadership of museums, libraries and archives, and their join-up with other cultural and learning services. We believe that these principles need to be well understood and reflected in the shape of new delivery arrangements post-MLA. We judge that it is important that expert advice, knowledge and research designed to support the development of high quality services for local people are not lost. We urge that the new arrangements must preserve the advantages of a coherent and integrated approach to the development and improvement of the sector within a wider cultural framework, and in the task of safeguarding and making accessible the nation’s most important collections nationwide.

About the MLA 4. The MLA is the government’s agency for museums, libraries and archives. Leading strategically, MLA promotes best practice in museums, libraries and archives to inspire innovative, integrated and sustainable services for all. In the period 2007–10 the MLA transformed itself from an agency with 10 separate charities and 90 trustees, to a single entity with a governance board of just 10. In the process, MLA increased its operational efficiency and realised substantial revenue savings. 5. We now work as an agency which targets its resources to where they will be most effective in order to support transformation in the sector. Working across government, and with 150 local authorities, 3,000 public libraries, 300 archives and 1,200 museums, we support targeted services for communities and the people that live in them and work on national initiatives that can’t be delivered by local councils working on their own. We have funding relationships with more than 80 bodies of varying sizes, and collaborate with other Non Departmental Public Bodies (NDPBs), and various sector and public bodies nationally and regionally. 6. MLA, through its engagement with local councils, has special knowledge of each of their circumstances in relation to libraries and cultural services. Our small but agile field team (26 home workers across the country), has enabled us to deliver some notable initiatives in support of sector transformation. Our work is underpinned by four strategic priorities: continuous improvement; learning and skills; sustainable communities and effective leadership and strong advocacy.

Future Funding of Museums,Libraries and Archives 7. Local government funding—Our main concern in relation to future funding is the position of local government. The majority of spend on museums, libraries and archives is directly in the control of councils. We believe there is a need for a place-based spending philosophy—a locally determined and joined up approach to investment which gives local partners the flexibility to move money to where it can be effectively spent locally. We have worked closely with Arts Council England and other NDPBs to encourage a joined- up approach among government agencies in the English regions. 8. However, while MLA strongly supports the principle of localism, that decisions should be made as closely as possible to the users, we do not believe that local government should be left un-supported with sole responsibility for museums, libraries and archives. Outside of the un-defined duty to provide a “comprehensive and efficient” library service, their spend is largely discretionary and therefore especially Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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vulnerable given all councils are making cuts, and are also concerned about the outcome of the Spending Review and subsequent local government funding settlement. A key challenge is to manage the relationship and respective responsibilities between central and local government. It is vital that local government is supported; with expert advice and guidance, and to form partnerships beyond their boundaries. There must be a mechanism, incentive and duty on councils to consider the wider geographical and national interest in safeguarding collections.

9. Sharper investment—MLA believes that the size of the funding pot is only part of the issue—we need mechanisms and the leadership to ensure that money is well spent, duplication is avoided, best practice spread, opportunities for levering in funding and promoting philanthropy maximised, and the national interest protected. We believe it vital that overheads within local councils are brought down to the lowest possible level, over and above savings that can be achieved by cross-boundary collaboration and sharing of services. Investment must be focused on the front line, and services modelled around the needs of the consumers.

10. Many initiatives can only be conceived of, led and cost-effectively delivered nationally, whether that is through an MLA or alternative arrangement. MLA has delivered a number of such initiatives, such as the People’s Network, Reference Online and faster broadband for libraries. A list of key current national functions that will need maintenance is in Paragraph 17 below.

11. Future of Renaissance—The MLA currently administers Renaissance—the £50 million per annum programme which delivers funding to regional museums ensuring government can effectively influence the direction and delivery of non-national museum services across the country. Our concern is to advocate that the benefits of the Renaissance programme—substantial increase in visitor numbers, educational attainment, community involvement, safeguarding and making collections accessible—must not be lost, either in the Spending Review outcome or in new arrangements put in place to deliver it post-MLA.

12. With an ambition to create “national-quality museums” across England, and in recognition of the need to deliver more for less, MLA has proposed to the Culture Minister, revisions to the Renaissance programme. We want to see a Future Renaissance programme that moves away from a model based on the granting of cash sums to the nine regional Hubs, and more based on a model that better targets the available funding to achieve world class museums nationwide in a way that achieves sustainable improvement. We have also suggested ways to improve the coordination of grant funding (including HLF and ACE) and to extend the reach of the programme to include public record offices where appropriate.

13. We believe it is also important that the partnerships and functions Renaissance supports across the country—such as the Museum Development network, are maintained in an integrated model. We also believe that the work of the Leading Museums initiative (launched by MLA in light of the Renaissance Review in 2009 and chaired by Professor Tom Schuller) needs to be taken into account.

14. Spend on museums also needs to take specific account of funding for university museums. While most Renaissance funded museums are part of our local government partnership, there is currently a direct funding relationship with the government and key university museums.

15. Libraries—with funding cuts compounded by pressure for council tax freezes, local authorities will have to take increasingly hard spending choices. There is an underlying danger, particularly in the absence of MLA or any equivalent national voice, that libraries (and museums and archives for that matter) will get squeezed into a no-mans land between funding for, say theatres, concerts, artists on the one hand, and local government core services on the other. Services should be designed around the demand evidenced by research and aimed to meet the needs of the public, rather than based on organisational boundaries if mass library closures are to be avoided.

16. As an answer to the financial challenge faced by libraries, and with the ambition to aim for modernisation and resist short-term closures and cuts, MLA, in partnership with the LGA Group, is leading the delivery of the Future Libraries Programme which will test drive new partnerships and governance models. The Minister for Culture Ed Vaizey announced on 16 August 10 projects, representing 36 authorities that will deliver this ambitious change programme in the first instance with the aim of spreading best practice more widely. The programme is currently at an early stage of its work.

17. Archives—with the archive sector being smaller and having to compete for reduced funding with higher profile sectors within arts and heritage, it will be important that the voice of the archive sector, which has benefitted from cross sector advocacy embodied in the MLA, is not drowned out in a new framework of integration with the wider arts and heritage sectors. MLA and TNA jointly developed the government’s strategy and Action Plan for Archives, which advocates better more joined-up and accessible archive services, a concept which should be taken forward in the new arrangements. (See also Renaissance, above) Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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Lines of Inquiry Role of MLA — The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the MLA. 18. This is a time for significant challenge for our sector. An economy only slowly emerging from recession and pressures on public spending provide the spur to make even greater efforts to deliver social, economic and environmental benefits for people and communities. Reflecting the times the team at the MLA have worked tirelessly and with commendable commitment to use newly focussed resources and expertise to support every locality throughout England, whilst continuing to reduce operating costs. We are proud of the range and quality of services we have overseen and are committed to these being reflected in the new arrangements. 19. The MLA administers key national functions (and services a number of arms-length expert technical panels which are vital to the task) including: — Managing Renaissance—the £50 million a year programme which delivers funding to regional museums ensuring government can effectively influence the direction and delivery of non-national museum services across the country. — Accrediting and developing museums to national standards. — Designating vital collections in non-national institutions. — Export licensing and providing an expert service to the arms-length Reviewing Committee (which recommends export bars on objects of national significance). — AIL (Acceptance of iconic objects in lieu of inheritance tax) and its arm-length panel. — Government Indemnity and national security—essential in enabling touring exhibitions. — Funding the Portable Antiquities Scheme and many smaller, but far reaching and highly valued products such as Culture 24 and Collections Trust. — The Strategic Commissioning Programme—helping to build the important relationship between museums and schools (funded through DCMS and DfE). — National initiatives such as Reference Online, People’s Network. — The Future Libraries Programme. — Working in close partnership with The National Archives to ensure that archive services are integrated into wider public service agendas with the ambition of making them more accessible to the public.

Arts and heritage funding — What impact recent, and future, spending cuts from central and local government will have on the arts and heritage at a national and local level? — Whether the current system, and structure, of funding distribution is the right one? — What level of public subsidy for the arts and heritage is necessary and sustainable? 20. With tourism being the UK’s fifth largest industry and heritage and culture being the overwhelmingly most popular reasons for visitors to come here (the UK has five of the 20 most visited art museums in the world) it makes good business sense to ensure adequate resources are invested in our arts and cultural institutions. The economic benefits of the UK’s major museums and galleries alone are estimated to be 1.5 billion per annum.46 21. The total national cultural spend amounts to only 1% of the NHS budget,47 in terms of the “quality of life” return, we feel this represents good value for money on the public purse. Cuts to spending in an area which already only represents a small slice of public expenditure, we fear will have a disproportionate affect on social outcomes. The obvious impact of cuts would include increased closures, reduced services and less accessible collections. 22. Together with other NDPBs, MLA has supported the DCMS research programme known as CASE. The data from this investment has recently begun to show real benefit in relation to a better understanding of the impact of culture and cultural engagement on—for example—public well-being, confidence and aspiration. We believe that more can be made of this evidence in planning future provision for culture and the arts. In particular, we urge the spreading of better cross-Whitehall understanding of the benefits and positive social outcomes of culture and the arts, for instance in relation to health, the ageing demographic, need for more rounded education, skills development and the development of a stronger digital strategy for all ages and socio-economic groups.

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23. We hope for cleverer investment in museums, libraries and archives which is not based on short term budget cuts but will allow greater freedom, flexibilities and stability to respond to changing public need and deliver long term benefits for all.

Joint working — What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale? 24. The MLA works closely with relevant NDPBs and other key bodies to a philosophy that says the user must be put first and that local government shouldn’t be expected to have separate conversations with government agencies when one will do. Time and money has been saved by closer collaboration at regional and national level, particularly between MLA, Arts Council, English Heritage and Sport England. The Living Places Programme is a good example of how sharing of a Programme can make the Programme both cheaper, and more effective. 25. The principles of Total Place also need to be understood and applied. Essentially, this is a call for “systems thinking”, in which assessments of demand, benefit and consumer value take priority over more traditional supply-side economics. There is evidence that “systems thinking” can bring about more efficient delivery and greater user satisfaction. Simply sharing services is not enough: Pilots have shown that the savings and benefits depend on re-shaping services. 26. For greater efficiency and user led outcomes, we have published on our website the results of work that promotes amongst museum, libraries and archives the use of new governance and delivery models which requires: — the support and involvement of stakeholders in the public, third and private sectors; — looking at ways of co-locating and integrating services; — working more effectively across local government boundaries; and — exploring public/private partnerships, trust status and community ownership. 27. For Renaissance we propose a new model of central/local funding embedded within a place-based philosophy, which should include wider organisations such as HLF, ACE and potentially others. We also need local authorities, universities and independent museums to create dynamic local partnerships across the cultural sector and beyond.

Private giving — Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level? — Whether there need to be more Government incentives to encourage private donations? 28. It is clear from international models that businesses and philanthropists could play a greater role in arts funding. Present governance models for much of the sector mitigate income generation and enterprise resulting in over reliance on public subsidy and an inability to lever in additional investment. Many trusts and philanthropists currently exclude local authority funded services because they consider them to be “primarily the responsibility of central or local government”. However, the funding disparity between successfully self-funding London-based arts organisations and those least successfully developing funds is worth £206.7 million.48 29. There are also ways in which government could change the current taxation system: — Gift Aid could be greatly simplified and benefit from a composite rate and an automatic opt-out system for tax households; — The Treasury could agree to offset the value of cultural/historic objects given to museums, against Income Tax; — the current Acceptance in Lieu scheme could be extended to allow offers to be offset against Capital Gains Tax and Corporation Tax, and — the Schedule 3 list (which allows national, local authority and university museums to buy pre- eminent cultural objects at a tax-remitted price) should be modernised to include trust and charitable bodies. This could be achieved by extending Schedule 3 status to all MLA Accredited institutions.

APPENDIX — In 2008–09 national government through DCMS and its agencies spent £553 million on museums, galleries and libraries, compared to council spend of £1.8 billion on libraries, museums, galleries and archives.

48 A&B PIC Report 2009. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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— Over three funding rounds £291 miilion has been invested in regional museums through the Renaissance programme. This year, £51 million is budgeted for, £43 million of which goes directly to the Hubs of regional museums. These museums in turn heavily rely on local government for most of their operating costs, though in some cases museums are over-reliant on the Renaissance programme for their day to day costs. This is a challenge that MLA has been confronting through its field team engagement. — The 10 phase one areas who are taking part in the MLA/LGA/DCMS Future Libraries Programme are: 1. Northumberland with Durham 2. Bolton, with Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford, Wigan 3. Bradford 4. Lincolnshire, with Rutland, Cambridgeshire, North East Lincs, Peterborough 5. Suffolk 6. Oxfordshire with Kent 7. Herefordshire with Shropshire 8. Cornwall with Devon, Plymouth, Torbay 9. Lewisham with Bexley, Bromley, Croydon, Greenwich, Lambeth and Southwark 10. Kensington & Chelsea with Hammersmith & Fulham — MLA published Sharper Investment for Changing Times, which sets out how we believe museum, library and archives services can and should change for the public benefit in the current economic climate. — More www.mla.gov.uk September 2010

Written evidence submitted by the Association of British Orchestras (ABO) (arts 125) Executive Summary — The arts have benefited from sustained public investment over the past 15 years. This public investment is tiny in relation to overall public spending. — The UK’s mixed economy model of arts funding is effective and efficient. — The maintenance of both central and local government funding for the arts is essential for the health and cultural wellbeing of the nation. — Private funding cannot replace a shortfall in public funding for the arts. — The maintenance of Arts Council England as an independent public body for the distribution of public funding of the arts is essential. — The Government’s proposed changes to the distribution of National Lottery funds are welcome.

1. Introduction 1.1 The Association of British Orchestras (ABO) is the representative body for professional orchestras in the UK. Its members range from the major symphony orchestras (including the BBC) to chamber, opera and ballet orchestras. Our vision is of a society where orchestral music is valued as a core component of contemporary culture. 1.2 The ABO is pleased to submit evidence to this inquiry as a long standing stakeholder in the full range of issues impacting upon funding for the arts. Our evidence is submitted, as a representative body, on behalf of the entire orchestral sector. 1.3 Our evidence will inevitably focus on the arts rather than heritage. However, it should be noted that orchestras to some extent have a “heritage” role, preserving the canon of great works from the past, while also playing a role in nurturing contemporary composers and artists. In effect, it is analogous to combining the role of museum and contemporary art gallery. In 2008–09 British orchestras commissioned 113 new works and put on 132 first performances. 1.4 It is important to explain the complicated mix of funding for professional orchestras. This investment has helped them not only to perform great music in the traditional concert hall but to extend their reach into schools, rural and hard-to-reach communities, as outlined in the ABO’s publication Beyond The Concert Hall, and to be in the vanguard of innovation in digital delivery and new concert formats, as outlined in the ABO’s publication Orchestras into the Future. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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1.5 Arts Council England funds eight symphony orchestras and six chamber orchestras (two of which are specialist contemporary music ensembles and one a specialist period instrument ensemble), across seven Arts Council regions. While there are four London self-governing symphony orchestras funded by Arts Council England, this funding is also intended to enable them to develop residences and tours outside London. So, for example, the Philharmonia Orchestra has residencies in Bedford, Leicester and Basingstoke, the Royal Philharmonic Orchestra in Croydon, Northampton, Lowestoft, Crawley and Reading, and the London Philharmonic Orchestra in Eastbourne and Brighton. 1.6 Over recent funding rounds in 2004 and 2007 there has been a steady decrease in the number of chamber orchestras funded by Arts Council England. These chamber orchestras have survived without public funding, albeit on a reduced level of activity. Of increasing importance has been the role played by Orchestras Live, the development agency for orchestral music in England, which has successfully enabled partnerships between and levered funding from local authorities and promoters to extend the reach of orchestras into those parts of the county not served by a resident symphony orchestra. 1.7 In Scotland, two orchestras are funded directly by the Scottish government, to a more generous extent than their equivalents in England to enable them to tour widely across the nation. A third orchestra is funded by Creative Scotland. 1.8 The BBC National Orchestra of Wales is jointly funded by the BBC and the Arts Council of Wales. Chamber orchestras in Wales have relied solely on funding from the National Lottery. 1.9 In addition, there are the orchestras of the opera and ballet companies, which are also beneficiaries of public funding through the public investment in the opera or ballet company, funded by their respective Arts Council or by the Scottish Government. 1.10 In respect of this enquiry, we are excluding the BBC performing groups from the evidence we are submitting. 1.11 Funding from local government varies from orchestra to orchestra. Some, such as the Bournemouth Symphony Orchestra, have funding agreements with multiple local authorities. More crucially, local government is often the primary source of funding for the concert halls and local promoters. 1.12 Public funding for orchestras tends to account for anything between 10% and 55% of income, depending on the orchestra. The rest is generated by a mix of earned income from ticket sales, commercial engagements, foreign tours, broadcasting fees and recordings, and private support (sponsorship and individual giving). In recent years the income from recordings has declined as record labels have suffered from the impact of illegal file-sharing and in consequence are less able to invest in classical music recordings. 1.13 There are a number of orchestras, some of international renown, in membership of the ABO which do not receive direct funding from their respective Arts Council, and which therefore rely exclusively on earned income and private support. They are indirect beneficiaries, however, of the funding for venues and from Orchestras Live, and are part of the delicate fabric of public and private support for the arts. These orchestras are concerned that their viability may be threatened by increased competition for the limited pot of corporate sponsorship and individual giving.

2. What impact recent, and future, spending cuts from central and local Government will have on the arts and heritage at a national and local level 2.1 The ABO would contend that public funding for the arts and heritage had reached a level in 2008–09 that enabled arts and heritage organisations to achieve a healthy balance between public subsidy, private funding and earned income, under the “mixed economy” model. While concerned at the number of chamber orchestras that had been “disinvested” by Arts Council England in 2004 and 2007, the ABO was pleased that investment in the symphony orchestras and opera and ballet companies had remained stable. The consequence of this sustained investment and funding model was that British orchestras presented over 3,100 concerts in 2008–09, to over 3.4 million people. 2.2 The cuts imposed in 2009–10 by both Arts Council England (0.5% to their regularly funded organisations) and by some local authorities have already led to a contraction in orchestral activity, with fewer concerts planned for 2010–11 and beyond. We have already seen the impact of public spending cuts in Scotland, with Scottish Opera proposing to halve the working hours and salaries of its orchestral musicians. 2.3 This will be exacerbated hugely by the impending spending cuts for 2011–12 through to 2014–15. Arts Council England has already written to their regularly funded organisations recommending they plan for a reduction of 10% in subsidy for 2011–12, and we await nervously what level of cuts will follow. We are working on the assumption that the total contraction in funding for the arts could be as much as 30%. 2.4 The consequence of this will be that there will be a serious contraction in the amount of concerts, opera and ballet productions available to the public. It is simply unimaginable how our members would cope with this level of cuts and the disappearance of some internationally renowned orchestras, opera and ballet companies would be inevitable. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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2.5 This of course would also have knock-on effects in terms of unemployment of artists and administrators, loss of tax and national insurance receipts and a rise in welfare payments. It is arguable that the amount saved by cutting the arts, which would make a negligible impact on reducing the national debt, would simply be offset by the increase in costs associated with rising unemployment and decline in economic activity. 2.6 It is important to note that orchestras and opera companies are in a particularly difficult position in that artists such as conductors, soloists and singers are contracted anything from two to four years ahead. They therefore have contractual obligations and a rapid decrease in public funding would be catastrophic and place them in a position of insolvency. 2.7 It is also important to point out that an orchestra carries large fixed costs in terms of human resources. An orchestra may require the employment of upwards of 100 musicians on fixed contracts, in addition to the management team. Unlike, say, a theatre company, an orchestra cannot simply choose to perform works with fewer musicians. If a Mahler symphony requires 100 musicians on the concert platform, that is the number that must be fielded. And the public, of course, expect a symphony orchestra to play the symphonic repertoire. The problem with carrying such a high level of fixed costs is that the same outlay of expenditure on human resources is required regardless of whether activity is reduced, and a reduction in public subsidy would create an imbalance in the “value for money proposition” expressed as a ratio of fixed costs to output. 2.8 Arts Council England’s Stabilisation programme made a massive contribution to the health of some our leading orchestras and other arts organisations, in response to the pressure placed on them by cash standstill revenue grants in the 1990s which had made it increasingly difficult for them to manage their business on a sustainable basis. Not only did it provide additional funding, but also developed their business planning and internal operational reform. The success of our orchestras today, and their ability to compete in a global marketplace, is directly the result of that investment of lottery funds. However, we should point out the obvious lesson that a shortfall in public subsidy inevitably leads to a build up of deficits for arts organisations such as orchestras that carry a high fixed cost in artistic personnel. 2.9 An orchestra is not just about playing great music on the concert platform. Orchestras have been pioneers in developing education and community programmes, that serve both to develop new audiences and to complement music education in schools. Much of this work is celebrated in the ABO’s publication Unlocking Potential: Education and the Orchestra, with over 400,000 young people in England and Scotland benefiting from engagement with orchestral musicians in both the classroom and the concert hall. However, it is important to stress that while the infrastructure that supports an orchestra’s education department may well be supported by the orchestra’s public subsidy, the projects themselves will often be funded by trusts and foundation or by fees from schools/local authorities. 2.10 If concert halls, venues and local promoters suffer significant funding cuts from their respective local authority, the irony could be that there continue to be British orchestras, but an acute shortage of venues in which to perform in. It is vital to recognise the delicate balance that exists between local authority and Arts Council funding. If one is cut, the other will inevitably follow. 2.11 It is also important to point out that the cuts will not just have an impact at a national or local level, but at an international level as well. Orchestras are cultural ambassadors and operate within a global marketplace, and to cover shortfalls in other areas of earned income have increased the amount of foreign touring they do. This puts them in competition with other European orchestras, which are publicly funded to as much as 85% of their income. Reducing the amount of public investment in British orchestras will put them at a commercial disadvantage, exacerbated by the recent rise in the value of sterling. Their success can be judged by the fact that in 2008–09, British orchestras played in 39 different countries and performed in 500 concerts overseas. 2.12 The arguments for the financial return on public investment in arts and heritage organisations, including orchestras, have been well-rehearsed. They are generators of income from tourism, as evidenced in Visit Britains’ recent report Culture and Heritage Topic Profile. Performing arts organisations also, of course, generate VAT receipts from ticket sales. Recent research into the impact of Welsh National Opera on the Welsh economy reveals the company contributes £22.5 million to the country—five times its current annual revenue funding of £4.5 million from Arts Council of Wales. 2.13 It is salutary to compare the UK government’s decision to cut spending on culture with the USA’s enlightened inclusion of the arts in its fiscal stimulus plan. President Obama’s remarks at the 6 December Kennedy Center Honors included the following statement of support for the arts: “In times of war and sacrifice, the arts—and these artists—remind us to sing and to laugh and to live. In times of plenty, they challenge our conscience and implore us to remember the least among us. In moments of division or doubt, they compel us to see the common values that we share; the ideals to which we aspire, even if we sometimes fall short. In days of hardship, they renew our hope that brighter days are still ahead. So let’s never forget that art strengthens America. And that’s why we’re making sure that America strengthens its arts. It’s why we’re reenergizing the National Endowment of the Arts. That’s why we’re helping to sustain jobs in arts communities across the country. It’s why we’re supporting arts education in our schools, and why Michelle and I have hosted students here at the White House to experience the best of American poetry and music.” Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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3. What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale 3.1 Although it seems tempting to assume that there is potential for significant savings from mergers and sharing back office functions, there is a body of evidence that shows this not to be case. Evaluation of Arts Council England’s Thrive programme revealed that for a successful merger to take place, significant additional one-off investment is required, for which there is no obvious source of funds. And merger does not necessarily generate a saving in subsidy or running costs; it merely enables the merged organisation to do more with the same level of subsidy. 3.2 In addition, a study of Scotland’s National Performing Companies was undertaken during 2007–08 into the likely impact of combining backroom HR and payroll services. This reported that whilst it was possible that ultimately savings could have been made through this process in future years, the cost of setting this service up was deemed to be prohibitive and contrary to the expectations of such combined working.49

4. What level of public subsidy for the arts and heritage is necessary and sustainable 4.1 The answer to this question is that it depends on the individual organisation. Arts Council England will make a judgement on the level of subsidy required based on the mission, need and quality of the organisation. 4.2 The level of funding for Arts Council England in the funding round 2008–11 was in our opinion at the right level for the long-term sustainability of its regularly funded organisations.

5. Whether the current system, and structure, of funding distribution is the right one 5.1 We are tempted to argue that if there wasn’t an Arts Council England, one would have to invent it. The model adopted in Scotland of five national performing companies, funded directly by the Scottish government, provides an interesting comparison, but it is hard to see how orchestras in England would benefit from a similar approach except for those attached to a national opera or ballet company.

6. What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations 6.1 It is important to stress that changes to the National Lottery are currently at the consultation stage and there is no guarantee the proposed return to the original shares will be adopted. 6.2 Should the arts share return to 20%, this should mean an additional £50 million of lottery funding for the arts will be forthcoming by 2012–13. 6.3 However we are mindful of the principle of additionality, and are concerned that any increase in lottery funding may not replace the decrease in revenue support for orchestras. 6.4 We believe it is important that lottery funding provides some capacity for strategic investment to allow arts organisations to develop. The Thrive programme, as an example, used lottery funding to help generate mergers, and additional investment will be required in the coming years to develop digital distribution and implement greener working practices.

7. Whether the policy guidelines for National Lottery funding need to be reviewed 7.1 We are supportive of the principle of additionality and see no need for this to be reviewed.

8. The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council 8.1 The operation of these non-departmental public bodies has no direct impact on British orchestras. However, we would be concerned if responsibility for the work carried out by these two bodies was passed on to Arts Council England without the provision of sufficient additional resources, thereby impacting on the amount available to support performing arts organisations.

9. Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level 9.1 Businesses and philanthropists already play a significant and valuable role in supporting arts organisations at national and local level. As some of the leading philanthropists have made clear, however, in recent correspondence with the Secretary of State for Culture, Media and Sport, their contribution is already generous and they would not take kindly to being taken for granted as a quick fix for a substantial cut in public funding. What a philanthropist gives can all too easily be taken away. 9.2 Corporate sponsorship has been a source of income for arts organisations for many years but evidence from Arts and Business has shown, not surprisingly, a decline during the recent recession.

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9.3 Another important source of private support is trusts and foundations. However, these have suffered in recent years from the decline in their investments and reduction in yields, reducing the amount they can make available in grants. In addition, grants can tend to be focused on education and community work, rather than on the main body of an orchestra’s work. 9.4 It is important to note that Arts Council England created the Sustain Fund in 2009 to enable lottery funding to be used to cover shortfalls in earned income and private support that resulted from the recession. This proves that private support declines during a recession, and therefore should not be seen as a stable long-term solution. 9.5 There has been much talk of endowments as a replacement for public subsidy. However, evidence from the USA has shown the danger of an over-reliance of endowments, with the collapse in the markets leading to both a reduction in the capital value of the endowments and in income. This has led to orchestras in the USA having to re-negotiate contracts with their musicians, industrial unrest, contraction in activity, and cessation of operation altogether. 9.6 This is not to say that endowments do not have their place in the UK mixed economy funding model. They should, however, be seen as one tool in the toolkit. 9.7 Arts organisations already work their hardest to secure private support and it is difficult to see how they can “redouble their efforts” at a time of funding cuts, especially as the cuts will inevitably lead to a reduction in the workforce. It is perhaps rather obvious, but for an arts organisation to raise funds, it needs to employ fundraisers.

10. Whether there need to be more Government incentives to encourage private donations 10.1 The Treasury is currently carrying out a review of Gift Aid. The ABO and its members support the retention of the Gift Aid system, in particular the retention of the higher rate tax benefit, with some simplification of its bureaucracy. We also believe “lifetime legacies” should be explored as a mechanism for helping build endowments. 10.2 There has been talk of adopting “US style” fundraising in the UK. It is important to point out that in the USA, gifts to qualifying charities (which include arts organisations) can be offset against income tax by all taxpayers, as opposed to the UK’s Gift Aid system, where there is a marginal tax benefit for higher rate taxpayers only. August 2010

Written evidence submitted by The Theatres Trust (arts 166) 1. The Theatres Trust welcomes the opportunity to comment on the Culture, Media and Sport Select Committee Inquiry and would be pleased to provide oral evidence to the Select Committee. 2. The Theatres Trust is an Advisory Arms Length Body of the DCMS. We were established by The Theatres Trust Act 1976 and The Theatres Trust (Scotland) Act 1978 “to promote the better protection of theatres”. These Acts apply to all theatre buildings in England, Wales, and Scotland. The Trust’s 15 trustees are appointed by the Secretary of State for Culture, Olympics, Media and Sport and include trustees from England, Scotland, Wales and Northern Ireland. 3. The Theatres Trust is a statutory consultee in the planning system. Local authorities are required to consult the Trust on planning applications which include “development involving any land on which there is a theatre.” The statutory instruments setting out the consultation requirements are currently: The Town & Country Planning (General Development Procedure) Order 1995, Article 10, Para 5 and Regulation 25 of The Town and Country Planning (Development Management Procedure) (Scotland) Regulations 2008, Schedule 5, paragraph 11. Theatres in Northern Ireland are covered under an administrative agreement. The Trust reports on its pre-application advice and planning application advice annually to the Department of Communities and Local Government. 4. The Theatres Trust is therefore a good example of an advisory body that works at local authority level within the areas of responsibility of both the DCMS and DCLG. We are often the only source of expert advice on theatre use, design, conservation, property and planning matters available to theatre operators, local authorities and official bodies. Given the pressures on local authorities to reduce staffing capacity in arts and cultural and planning departments, with many arts and conservation posts having been downgraded or deleted, we have been receiving an increased number of requests for our advice. 5. In its written ministerial statement of the 26 July 2010 the DCMS proposed that The Theatres Trust be declassified so it can act as an independent statutory advisory body. The Trust has been told that The Theatres Trust Act and The Theatres Trust (Scotland) Act will remain in force, ensuring that The Trust’s role continues. We have also been told that the only change that will be made will be to transfer the responsibility of appointment of the Trust’s trustees from the Secretary of State to the trustees of The Theatres Trust, thereby reducing administrative time spent by the Department on our trustee appointments. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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Our authority is vested in the Acts and in our role as a statutory consultee and it is important that these continue as instruments for the Trust to provide its advice and provide for the protection of theatres, particularly when many theatres will be facing additional pressures of cuts in public subsidy. 6. The Theatres Trust receives a £55,000 annual grant devolved for administrative purposes from the DCMS to English Heritage in 1994. It is vital that this grant remains as it is provided for the execution of our statutory work in England. Given that this grant has remained on standstill since 1994 we have already been managing annual inflationary reductions. Any further cut in this grant would seriously compromise our ability to deliver our work. It contributes directly towards the employment of an RTPI qualified specialist theatre adviser enabling us to deliver our statutory obligations to provide planning and heritage advice. In 2010–11 this included 14 pre-applications, 104 planning applications, 626 local authority Local Development Framework consultations and 59 other consultations. The Adviser also considers listed building consent applications and in 2010–11 these totalled nine pre-applications and 60 listed building consent applications. In addition the Adviser maintains a Theatre Buildings at Risk register enabling us to establish those theatres most at risk. 7. Whilst not a statutory consultee on listed building applications, recognition of our expertise in this area by local authorities means we are considered an important consultee. Our expertise was also noted in relation to the Heritage Protection Review in 2008. The Culture, Media and Sport Select Committee stated “Recommendation Four: [The Select Committee] recommend[s] that the Government ensures that the role of statutory consultees such as the Theatres Trust is properly incorporated into the heritage protection reforms in addition to their existing role in the planning system.” The DCMS released its response to recommendations from the Culture, Media and Sport Select Committee on the Draft Heritage Protection Bill on 20 October 2008. The Trust was referenced in on page 11, stating “31. The Government has welcomed comments received from organisations that have put forward a case for their greater involvement in the heritage protection system. In the case of the Theatres Trust, DCMS has been constructively engaged with them and we agree that there is scope for amendments to the Bill to enable the Theatres Trust to participate more fully in the heritage protection system. For example, a number of provisions will be redrafted to ensure that the Theatres Trust is capable of being included as a statutory consultee, in relation to processes and decisions affecting theatre buildings.” 8. We are working with civil servants at the DCMS on our declassification, but we are yet to receive any written notification of the timetable and the process. We are working to ensure that any changes in our relationship to the DCMS do not impact negatively on our capacity to promote the better protection of theatres on behalf of the nation, particularly at a time when many more theatres in the UK will be facing the prospect of managing their assets on diminishing levels of public subsidy. Please also find attached our wider response to the Committee’s specific questions [not printed].

9. What impact recent, and future, spending cuts from central and local Government will have on the arts and heritage at a national and local level 9.1 Subsidised theatres rely upon a range of different funding streams for capital and revenue support including the Arts Council, local Government, European Funding, Government regeneration funding (previously through the Regional Development Agencies and we anticipate in the future through Local Enterprise Partnerships), Arts Lottery and Heritage Lottery. Our concerns lie in the rate of the implementation of the cuts, given that Government departments, Arts Council and local Government will be looking to make savings quickly. Theatres operate on a fine financial balance and should be given time to manage any cuts and seek alternative income to offset any reductions in subsidy and capital commitments. A sudden squeeze on all these funding streams will have an impact upon the ability of theatres to function effectively on a day-to-day basis, to maintain their buildings, and to implement already planned capital improvements, and so ensure they continue to be able to maintain a high quality of service and operate sustainably for the long term. 9.2 In planning for spending cuts, arms length bodies and local authorities are already making provisions for reducing staffing levels and the cost of providing services in the areas of arts and culture, planning and conservation. They are looking at options for cutting back staff, combining service functions with other arms length bodies and neighbouring authorities, and establishing trusts or outsourcing to deliver services. The impact of this disruption on theatres cannot be underestimated and should be managed to ensure it does not cause any additional financial stress. 9.3 Theatre buildings not in theatre use are also at greater risk. The Trust is already concerned at the number of theatre buildings, particularly in the north of England, which are facing closure and demolition by Local Authorities that feel unwilling or unable to maintain them. The Palace Theatre in Nelson was demolished earlier this year, while North Tyneside Council is planning to spend a considerable sum demolishing the Borough Theatre, Wallsend and redeveloping it for commercial and residential uses, despite the efforts of local residents to save the building. The Council specifically cited reductions in public sector funding as reasons why they refused to support local residents’ attempts to save the building, considering their plans financially unsustainable. The Trust fears that these represent the start of another spate of losses of theatre buildings in towns which already have little else in the way of cultural facilities. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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9.4 Regional theatres are particularly vulnerable to reductions in Government support since they tend to be in areas which lack the profile or means to attract significant levels of business or philanthropic support, resulting in large areas of the country which are denied access to live professional theatre and performances. Regional theatres are vital components of the wider theatre ecology, enabling practitioners to develop their skills and inspiring the next generation and their loss has an impact throughout the sector.

10. What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale 10.1 Theatre owners and operators will face many challenges to maintain their competitiveness and continue to attract audiences over the next few years. Whilst there may be opportunities to work more closely with neighbouring theatres (in some areas) to promote productions jointly to audiences and to work on joint programming, this can often take as much time as working alone. 10.2 There may well be opportunities for theatre organisations to merge and for local authority-owned theatres to be devolved to trusts, but each of these options will need to be carefully examined and managed. This includes a commitment to investing resources in feasibility work to ensure that solutions do indeed provide a more economically viable and sustainable solution and don’t just transfer financial responsibilities which require similar levels of subsidy.

11. What level of public subsidy for the arts and heritage is necessary and sustainable 11.1 Theatres operate in a mixed economy, attracting earned income and subsidy to present and produce a range of work for different audiences. Most public subsidy that theatres attract is targeted towards public benefit, providing access to theatre experiences for those in society less able to afford to pay or those that do not have the family or other support that encourages participation in the arts. Protecting subsidy that goes towards providing those least able to access the arts with the opportunity to do so is necessary. 11.2 For example, larger receiving regional theatres are able to attract more income from the box office because of their size. In many of these theatres the levels of public subsidy are often lower, but targeted to providing use of the theatre by community groups who would not have the funds to afford commercial hire rates, or towards providing education programmes where theatres work with local youth services, social services and schools to create opportunities for young and other disadvantaged groups to access theatre experiences. 11.3 In smaller theatres, their smaller seating capacity seriously compromises their ability to earn income. They are often their local communities’ only access to the arts and culture, and in many places these communities are not wealthy.Subsidy that is directed towards producing and promoting work by small scale theatres that work closely with their local communities should be prioritised.

12. What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations 12.1 Theatres across the UK are still in need of a wide-reaching and coherent programme of capital investment to enable them to upgrade the basic fabric of their buildings to make them more accessible and financially viable, to improve their environmental efficiency, to increase audiences and help revitalise our tourism industry, and to act as a catalyst for urban regeneration. While the Heritage Lottery Fund has pursued a sustained and effective programme of investment in theatres, the same unfortunately has not been the case with Arts Council England Lottery funds in the last 10 years. If theatres are to engage with new audiences and continue to give life to town and city centres across the UK, it is essential that their capital needs are addressed. 12.2 While grants from the Heritage Lottery have helped to reinvigorate a number of theatres such as the Hackney Empire and London Coliseum, many theatres do not qualify as heritage assets in their own right, and the share of Arts Council funding going towards theatre buildings has declined dramatically after the first five years of the Lottery. There has also been an increasing divide growing between the experience of theatres in the commercial and in the subsidised sector. 12.3 The Theatres Trust welcomes the intention to return the Lottery shares for arts, heritage and sport to the level originally intended when the Lottery was set up. If ticket sales remain at their current levels, this should translate into an extra £50 million a year each for arts and heritage. The original “good causes” of arts and heritage have seen a diminution in the funds available for their activities not only from the reduction in Lottery shares in 1997 but also in the redirection of significant Heritage and Arts Council Lottery money to fund the Olympics. 12.4 However, we are also concerned that such re-distribution should not be seen as mitigation for wider cuts in government funding of arts and heritage projects. While we recognise the need to restore integrity to the public finances, we are anxious that the core principle of “additionality” in regard to Lottery funding is not compromised. One of the primary intentions for the Lottery, as the impact assessment document makes clear, was to provide funds for capital projects which the Government was not in a position to fund directly and to ensure that the country’s cultural infrastructure was properly restored, maintained and improved. The value of Lottery funding will be undermined if it is used instead as a substitute for core Government spending. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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13. Whether the policy guidelines for National Lottery funding need to be reviewed 13.1 The Theatres Trust would welcome a commitment to an increased level of Lottery funding going towards capital projects for theatres. One of the primary intentions for the Lottery was to provide funds for capital projects which the Government was not in a position to fund directly and to ensure that the country’s cultural infrastructure was properly restored, maintained and improved. 13.2 There are three areas that we would like to see considered further in the return of the Lottery to its original levels: 13.2 (a) A commitment to an increased level of Lottery funding going towards capital projects for theatres, particularly where these support economic and environmental sustainability, address issues related to climate change, and deliver aspirations of locally led initiatives to deliver the Big Society. Many theatres are still to benefit from Arts Lottery funds, which have tended only to focus on organisations occupying theatres that are already financially supported by the Arts Council as revenue or regularly funded clients. There are many theatres that operate in the amateur and voluntary sectors, or operate solely as receiving venues, in education and commercial sectors that provide public benefit and have been unable to access Arts Lottery funding for capital projects. The economic realities of theatre ownership are such that the return on capital invested is low in normal commercial terms, and far too low to support the sort of modernisation that is now needed. This has widened the gap between the standards the public experience in the subsidised and commercial sector. 13.2 (b) A commitment to capitalisation and the seed funding of endowments that can support the long term operational and maintenance needs, and therefore viability, of theatre buildings. For example, The Theatres Trust is keen to establish such an endowment to build its Theatre Protection Fund which would enable us to provide assistance to secure the future of theatre buildings. 13.2 (c) A recognition of the important leverage role that capital Lottery funds play in the economic, social and environmental regeneration of an area and that it has a complementary role to play in supporting theatre capital projects along with European and UK-wide enterprise and regeneration funds. The DCMS and the Lottery we feel therefore has a role to ensure that other Government Departments are aware of the implications on the Lottery of reducing capital regeneration funds.

14. The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council 14.1 In its written ministerial statement of the 26 July 2010 the DCMS proposed that The Theatres Trust be declassified so it can act as an independent statutory advisory body. The Trust has been told that The Theatres Trust Act and The Theatres Trust (Scotland) Act will remain in force, ensuring that The Trust’s role continues. We have also been told that the only change that will be made will be to transfer the responsibility of appointment of the Trust’s trustees from the Secretary of State to the trustees of The Theatres Trust, thereby reducing administrative time spent by the department on our trustee appointments. Our authority is vested in the Acts and in our role as a statutory consultee, and it is important that these continue as instruments for the Trust to provide its advice and provide for the protection of theatres, particularly when many theatres will be facing additional pressures of cuts in public subsidy. 14.2 The Theatres Trust welcomes the proposal by DCMS that we should be declassified to become an independent statutory advisory body. We anticipate that this will result in a saving of administrative time which will enable us to focus on promoting the better protection of theatres. We would welcome an endorsement by Culture, Media and Sport Select Committee of the Trust’s independent statutory advisory role. 14.3 Our advice has been instrumental in securing the future of theatres, scrutinising the suitability of works to theatres, ensuring that new theatres are fit for purpose and campaigning for the retention of theatres under threat. Our specialist advice to Local Authorities through the planning system is particularly vital at a time when they may be employing fewer numbers of planning and conservation officers. It is therefore imperative that the Trust maintains its role as a statutory advisor. 14.4 We are working with civil servants at the DCMS on our declassification, but we are yet to receive any written notification of the timetable and the process. We are working to ensure that any changes in our relationship to the DCMS do not impact negatively on our capacity to promote the better protection of theatres on behalf of the nation, particularly at a time when many more theatres in the UK will be facing the prospect of managing their assets on diminishing levels of public subsidy. 14.5 The Theatres Trust receives a £55,000 annual grant devolved for administrative purposes from the DCMS to English Heritage in 1994. It is vital that this grant remains as it is provided for the execution of our statutory work in England. Given that this grant has remained on standstill since 1994 we have already been managing annual inflationary reductions. Any further cut in this grant would seriously compromise our ability to deliver our work. We would welcome an endorsement by the Culture, Media and Sport Select Committee that our grant should continue at current levels. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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15. Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level 15.1 There needs to be a clearer understanding of why businesses and philanthropists invest in theatres and how they expect to benefit, in order to decide how extensive a role their support could play in the sector as a whole. Larger corporations are generally more likely to invest in high profile theatres and smaller groups or regional theatres are less able to attract significant levels of private investment, especially in areas of the country which are economically struggling. 15.2 Furthermore, private funding can be inconsistent and increase the uncertainty of an already volatile sector. The experience of many arts organisations in New York has been that private investment can evaporate in times of economic uncertainty, leaving them in severe difficulties. The impact of the recession last year saw many sponsors drift away from the arts. In some cases the Arts Council’s Sustain funding was able to fill the gap left, but this was a one-off injection of funds. 15.3 The Trust would be concerned at attempts to imitate too closely the American model of arts funding, without an appreciation of the many different factors which underpin it and which are not replicated in the UK, such as tax incentives, more independent regions and a different attitude to the role of central Government. There is also widespread dissatisfaction among American theatre practitioners with a system of private philanthropy which they feel does not deliver the depth or breadth of artistic excellence enjoyed in Europe. Spoken drama in London’s West End and on New York’s Broadway is now dominated by productions developed in the UK subsidised theatre sector. 15.4 Theatres already make huge efforts to attract business and private donations and it is uncertain how much more scope there is for greater involvement of the private sector without further tax incentives also being on offer.

16. Whether there need to be more Government incentives to encourage private donations 16.1 The existing system of Gift Aid is an essential fundraising element of many theatres that have charitable status. The Theatres Trust would welcome any proposals that strengthen the Gift Aid system, make it easier to claim, and which make it more attractive to the individual who is interested in giving. September 2010

Written evidence submitted by the National Heritage Memorial Fund (NHMF) and the Heritage Lottery Fund (HLF) (arts 192) 1. Introduction—NHMF and HLF 1.1 The National Heritage Memorial Fund (NHMF) was established in 1980 to save the most outstanding parts of our national heritage at risk, as a memorial to people who have given their lives for the UK. NHMF is the only dedicated source of Government funding for emergency acquisitions. It helps to acquire land, buildings, objects and collections of outstanding scenic, historic and cultural interest. An outstanding national collection has resulted from £298 million awarded. Without NHMF funding, key parts of our national heritage such as the Flying Scotsman, Orford Ness nature reserve and the Staffordshire Hoard would have been under threat. 1.2 When the National Lottery was created, NHMF’s independent board of trustees was given responsibility for distributing the heritage share as the only body with a remit for and experience of grant making for cultural, built and natural environment heritage across the entire UK. The Heritage Lottery Fund (HLF) is the largest non-government funder of the UK’s heritage, currently distributing around £205 million a year. The proposed change in the share going to the heritage Lottery good cause would mean an increase to £255 million a year in 2012–13. 1.3 HLF’s approach is driven by the nature of its funding from Lottery players. It supports the heritage that the public values, and helps people to get involved with and learn about it, thereby sustaining heritage for future generations. Lottery funding totalling £4.5 billion has been awarded to a broad range of heritage—from national icons and collections to small, neighbourhood projects; from landscapes, National Parks and Areas of Outstanding Natural Beauty to castles and piers; and from steam trains, museums and parks to oral history and local traditions. More than 34,000 projects of all sizes have been funded, with grants from £500 to over £20 million, in every part of the UK. Almost half of this funding has been awarded to voluntary and community organisations with nearly all projects involving volunteers. The need and demand for Lottery funding remains strong. In 2009–10, HLF received applications for £524 million—more than two and a half times its annual grant budget.

2. Summary of Response — The national priority of reducing the government budget deficit will inevitably mean less public money is available. Analysis suggests central and local government funding cuts of between 25% and 40% would mean a reduction in public spending on heritage of £600 million to £950 million pa across the UK. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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— A fundamental re-design of what heritage services are provided through the public sector is likely to result. Heritage organisations will need to adapt to these new financial realities. — This will not be easy. A transformation of the sector on this scale will need careful management and the adjustment will take time. There is a real risk of deterioration in the quality of physical assets along with the social and economic capital that is based upon them. It is of vital importance to protect the legacy of investment and innovation that lottery funding for heritage has made possible. — This new environment will also bring opportunities. It could lead to a sector that is even closer to local communities and is sustained by a combination of volunteering, local ownership, income generation and individual donations, working alongside continued public investment. — Additional Lottery income of £50 million a year from 2012–13 will mean that HLF will be one of few bodies able to respond to these pressures. HLF’s experience as a trusted funder of heritage, drawing in private and public investment, places it in an important position to help organisations to adapt, by investing in skills and capacity as well as assets.

3. Impact of Recent and Future Spending Cuts from Central and Local Government on Heritage 3.1 The scale of cuts 3.1.1 There will be reductions in public funding across the whole heritage sector. Central government departments including the Department for Environment, Food and Rural Affairs (Defra), the Department for Communities and Local Government and the Department for Culture Media and Sport (DCMS) are all likely to reduce funding. Changes to the funding of economic development, with the creation of Local Economic Partnership and the abolition of Regional Development Agencies, will also have an impact. The situation will be comparable in Scotland, Wales and Northern Ireland. 3.1.2 HLF/NHMF analysis of the potential scale of these cuts has assumed reductions of 25% to 40% in the budgets of both central government departments and local authorities, between 2010–14. 3.1.3 Central government departments currently provide £1.4 billion in funding for the heritage sector, so cuts here could amount to between £370 million and £580 million a year. This covers anticipated cuts of £173 million to £276 million in the DCMS budgets currently allocated to English Heritage, the Churches Conservation Trust, the Museums, Libraries and Archives Council, the nationally funded museums, the British Library and the Royal Parks. Annual cuts in Defra’s budget for natural heritage are estimated at between £193 million and £309 million. In addition, there are likely to be cuts to the sector from other parts of central government—such as funding for the National Archives, a proportion of which supports heritage. 3.1.4 Local authorities are also significant funders of heritage, with budgets for historic building conservation, museums, galleries and archives, and historic parks and gardens. HLF analysis suggests that total local authority expenditure in England and Wales for heritage was £570 million in 2009–10. A 25% cut would therefore mean a £142 million annual budget reduction, rising to £228 million pa with a 40% cut. 3.1.5 Overall, cuts to the entire heritage sector in England alone could be between £500 million and £800 million pa. With comparable budget cuts in Scotland, Wales and Northern Ireland, UK-wide cuts would be between £600 million and £950 million pa. For comparison, HLF’s funding for distribution within the sector UK-wide is currently £205 million pa. 3.1.6 These cuts will have an inevitable impact on HLF funded projects and future applications. All Lottery awards over £50,000 require partnership funding of at least 10% with awards of over £1 million requiring applicants to raise 25%. In the HLF programmes targeted at urban regeneration and public parks, the proportion of match funding from the public sector has traditionally been even higher, with nearly all match funding coming from local authorities and development agencies. HLF funded projects are finding it increasingly difficult to obtain partnership funding from within the public sector. Amongst the larger projects supported in the past two years, for example, 70% of match funding was expected to come from the public sector. But only one half of that has been secured. Some projects will therefore need to revise their funding and project plans. The situation is already worse in places, outside of the more prosperous metropolitan centres, where public sector support has tended to play a bigger role.

3.2 The impact of cuts 3.2.1 With less public funding available, the heritage sector’s financial model will have to be re- configured. Heritage organisations will need to evolve, to be flexible and to adapt to overcome the loss in public funding by revising business plans and combining greater earned income and local philanthropy with volunteer involvement. 3.2.2 In time more heritage organisations are likely to operate outside the public sector. They will become more locally responsive—operating with a social purpose and with commercial acumen. This could bring the freedom to experiment and to innovate—for example by looking after a mix of heritage assets from across different parts of the sector, or by operating across a variety of geographical areas, rather than within strict administrative boundaries. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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3.2.3 Organisations in the sector certainly have the potential to play this type of role and—judging by a recent increase in applications to HLF for projects involving asset transfer—there is an appetite for doing so. The National Trust is often held up as a model but, at the other end of the spectrum, thousands of small local voluntary groups already undertake conservation work in parks, nature reserves and historic buildings, and run sites and museums. 3.2.4 The current level of philanthropic interest in heritage can help to underpin this transformation. The most recent Arts and Business survey, for 2007–08, showed private investment in culture close to £700 million, with heritage organisations receiving £232 million. This sum mostly comprises individual donations, legacies, trust and foundation giving rather than investment from business. Heritage attractions are also benefitting from the healthy domestic visitor economy, with the boost of the Olympics to come. The growth of the knowledge economy offers further opportunities to increase income, for example through intellectual property and licensing. 3.2.5 However, there are real risks. A transformation on this scale will take time and will need to be managed. Even for an organisation that only receives a third of its revenue from public funding, replacing a 25% cut would require a 13% increase from other sources—3% a year for the four years over which cuts will be introduced. A 40% cut would mean a more demanding 20% increase. And there are many organisations in the sector that operate on a greater proportion of public funding than one third, and where the percentage increase in private finance would need to be even higher. Indeed some parts of the sector, especially those that are not visitor attractions, will always struggle to achieve high levels of earned income from commercial operations. 3.2.6 Public funding for heritage is fully justified on the well established principle of market failure— government resources are needed because no market exists for individual consumers to pay for the maintenance of heritage assets, despite the high value that people place upon them. Even where a market could, in theory, be created—charging visitors entry to a local park for example—this will frequently be highly inefficient as well as inequitable. Philanthropy, though a part of the answer, can’t be the whole answer to this market failure issue, either. Valued heritage in both inner cities and remote rural areas may equally suffer, due to a lack of donors able to provide financial support on the scale required. 3.2.8 Therefore, if the financial re-adjustment required is not managed successfully, or is simply not feasible, services will have to be cut and the real risk of loss will arise. In some areas, such as collections and archives, “mothballing” may be a feasible option for a short period, but this will mean that there is much reduced access, with educational and other services based on the collection being reduced or closed, leading, for example, to a loss of contact with heritage for millions of schoolchildren and—more widely—a reduction in the public support that sustains heritage. For historic buildings and parks, cutting back on maintenance carries the real risk of longer-term loss and damage that will be expensive to rectify—as has happened in the past. In the natural environment, a double adaptation will have to be managed—to financial and climate change. Across the heritage sector, revenue investment in public engagement will fall, and conservation expertise will be lost at both a local level and from within the relevant public bodies. 3.2.9 The deterioration of assets and curtailment of services will have a knock-on impact on the social and economic benefits derived from heritage—from the enjoyment, inspiration and opportunities for reflection that people value, to the quality of the local environment. There will be economic consequences for some areas, where heritage attractions act as important tourism anchors for local visitor economies. Cuts will hamper local regeneration and economic development. Finally, if the organisational infrastructure for managing and running activities stagnates, then opportunities for the thousands of people who are enthusiastically involved in heritage projects will be lost. Heritage volunteering, properly managed and resourced, is hugely popular, with very strong, proven benefits for the volunteer’s own well-being, as well as for the wider communities in which projects are based. 3.2.10 HLF has particular concerns that the legacy of Lottery investment of the last 16 years, which has achieved so much for heritage and people, should not be jeopardised by cuts to those parts of the sector unable to adapt quickly for good reasons, or through cuts that are made in too much haste.

4. Public Subsidy and the System and Structure of Funding for Heritage 4.1 Public subsidy is a necessary part of the mixed economy that supports a thriving heritage sector and is justified by the importance that heritage has for our society and the key role it plays in quality of life, contribution to the economy and our international reputation. 4.2 Government should continue to take responsibility for protecting heritage of national importance. NHMF is the only dedicated source of funding for emergency acquisitions, providing an essential backstop for the UK’s Treasure Act and the Export Control system. NHMF’s grant-in-aid was increased from £5 million per annum to £10 million per annum in 2007–08, following a recommendation from the 2004 Goodison Report to raise its annual grant-in-aid to £20 million. It currently has insufficient funds to respond to all the calls on it and in recent years has had to use its endowment to save Dumfries House and Titian’s Diana and Actaeon. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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4.3 NHMF and HLF play a vital role in heritage’s mixed economy. Both are UK-wide funds that cover the full range of the UK’s heritage. Funding should be equally available to all four countries of the UK, which should continue to have access to HLF’s UK-wide budget for major transformational projects. More than 50 of HLF’s awards of over £2 million have been in Scotland, Wales and Northern Ireland. 4.4 Communities also want funding bodies to have an understanding of local heritage and to take decisions as close as possible to the grassroots. Almost 60% of HLF funding is decided by locally recruited committees across England and in Scotland, Northern Ireland and Wales. 40% of HLF funding has gone to projects in the 25% most deprived local authority areas. 4.5 Funding should also be available for the whole breadth of the UK’s heritage including museums, galleries, libraries and archives; historic buildings and monuments; designed and natural landscapes; industrial, maritime and transport heritage; and the heritage of language, dialect and local traditions. HLF cuts across traditional, but artificial, heritage boundaries enabling communities to take action that brings wider benefits to local areas; for example through our successful Landscape Partnerships programme, which covers the heritage of an area that people value, whether natural, built or cultural. 4.6 Funding is needed for both large national and small local heritage projects. HLF values excellence delivered through heritage projects of all sizes, with grants from £3,000 to over £5 million. 4.7 Lottery funding for heritage must retain a people-focussed approach. HLF funding has conserved and opened up the UK’s heritage to a much wider group of people than ever before. It has given the public a greater say in its care and management with 90% of awards in the past year helping heritage projects to recruit and train volunteers. Getting people involved in heritage is one of the key ways to ensure that it will be sustained for future generations. 4.8 In order to maintain the arms-length principle, decisions about applications to both HLF and the NHMF must remain entirely independent of the Government. Furthermore Lottery distributors should fund projects that would not otherwise be funded by the government or public bodies in the pursuit of their statutory duties. But Lottery funding is not sufficient to replace all of the likely reduction in central and local government funding for heritage, of as much as £950 million pa, even with the expected increases in heritage’s share in 2011 and 2012. 4.9 Funders should continue to work together to maximise their impact and value for money across the heritage, culture and voluntary sectors. HLF currently delivers a number of funding streams with others, such as the Parks for People programme with the Big Lottery Fund, which has invested over £150 million in public parks since 2006, and the Repair Grants for Places of Worship with English Heritage, which has awarded funding to Grade I and Grade II* Places of Worship since 1996. 4.10 Heritage funders must have robust, transparent and accessible processes that are trusted by applicants, while delivering value for money. Specialising entirely in grant-making allows HLF and NHMF to work impartially alongside the wide range of bodies they fund, providing support in all areas and maintaining a strong focus on customer service. 4.11 Funding has been and must continue to be distributed in a way that leaves a legacy of heritage in better condition for future generations and meets existing heritage need. The decision to give heritage a share of the National Lottery’s proceeds in 1994 followed decades of under-investment that had left the UK’s heritage in a parlous state. We must not risk returning to that state. 4.12 Finally, funding should continue to ensure that heritage plays a role in the UK’s economic recovery. At a time when the Government is seeking to rebalance the economy, heritage is playing a vital role in supporting growing industries such as tourism. Heritage-based tourism contributes £20.6 billion to UK GDP and supports an estimated 195,000 full-time jobs, not just in London and the South East, but across the whole UK.

5. Business,Philanthropic and Private Donations to Heritage 5.1 It is important that the tax system plays its full part in supporting philanthropic giving and private donations to heritage. The Art Fund’s “Living and Giving” proposal would be one way of providing such an incentive, for example through income tax or capital gains tax. 5.2 Both NHMF and HLF awards act as an important lever for other funders, major donors and public fundraising campaigns. HLF is often the first funder to commit to heritage projects. This endorsement gives confidence to other funders and has resulted in a further £3.3 billion in partnership funding being secured for heritage projects since 1994. For emergency acquisitions, NHMF is often the principal funder supported by a small number of other funders, notably the Art Fund. Whilst trusts and foundations do contribute to NHMF-funded acquisitions, such as grants from the Esmee Fairbairn Charitable Trust and the Monument Trust for the purchase of the Siegfried Sassoon Archive, they cannot be relied upon as a sole source of funding. Most private funders expect to see some public funding contribution to acquire items for the national collection. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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5.3 Donations from high worth individuals are often focused toward large capital projects, such as the National Portrait Gallery’s Ondaatje Wing, which was also supported by an £11.9 million award from HLF. Private collectors also play a significant role: for example, with the help of NHMF Anthony D’Offay’s collection of modern art was secured for the National Galleries of Scotland and Tate for £26.5 million despite being valued in excess of £131 million. 5.4 Public fundraising campaigns can also raise money for acquisitions. However, they are quite rare and require both time and resources to succeed. Two of the most successful recent fundraising campaigns were those to secure Turner’s Blue Rigi and the Staffordshire Hoard. Both campaigns raised almost 25% of the total required from public donations, but still required a contribution of around 40% from NHMF.

6. Impact of Changes to the National Lottery for Heritage Organisations 6.1 In 2008 HLF announced an annual grant budget of £180 million pa from 2009 until the end of the current National Lottery licence period in 2019. Strong Lottery ticket sales have enabled HLF to increase that budget for 2010–11 to £205 million. The proposed change in Lottery good cause share for heritage from 16.6% to 18% in 2011–12 and to 20% from 2012–13 onwards means HLF could increase its budget by a further £19 million in 2011–12 and £50 million from 2012–13 if ticket sales remain at £5.4 billion pa. 6.2 As a result, HLF expects to support more projects and initiatives than originally expected. Additional income will allow HLF to be even more responsive and flexible in dealing with the issues arising from reduced public spending by supporting organisations through this period of change. It will also enable HLF to respond to other emerging challenges and opportunities for heritage, such as the public-policy focus on community ownership, asset transfer and decision-making at local level; the continuing development of digital technologies; the challenges of a low-carbon economy; and a growing, ageing and more diverse population.

7. Impact of Changes to DCMS Arms-length Bodies for Heritage 7.1 As new architecture is established to support a number of sectors within DCMS’s responsibility, it is important that places of worship; film, theatre and maritime heritage; and the museum, libraries and archives sectors continue to benefit from strategic leadership and investment. HLF and NHMF will work alongside any future arrangements and will continue to award funding to these important parts of the UK’s heritage. 7.2 DCMS has also stated that consideration is being given to “the role and remit of English Heritage, the Heritage Lottery Fund and the National Heritage Memorial Fund”. NHMF is working with DCMS, and other bodies involved, to ensure the best possible future for the heritage, reinforcing the importance of the principles set out in section 4 of this submission. September 2010

Written evidence submitted by Historic Houses Association (HHA) (arts 203) Key Issues — The arts and heritage play a very positive role in the UK economy and some areas of expenditure are essential if our heritage is to play its part at the heart of social and economic recovery. — The historic environment requires not only grant aid, but expertise to underpin conservation. — There is scope for the creation of public-private partnerships to pool resources and improve efficiency. — The restoration to 20%, of the shares of National Lottery funding to the arts, heritage and sport, would be very beneficial. — Government incentives are essential to optimise business sponsorship and philanthropy, whether through funding or reform of taxation.

Introduction The Historic Houses Association (HHA) represents historic houses, gardens, castles and estates mainly in private ownership, although there are a number of charitably owned houses in membership. We have 1,500 members throughout the UK, representing an astonishing variety of cultural heritage, ranging from intimate family homes to some of Britain’s most iconic buildings. Our members’ houses and gardens welcome 14 million visitors each year; 500 are open to the public, more than the National Trust and English Heritage and their equivalents throughout the UK combined. One in five of all member houses and gardens have developed education resources and programmes and welcome over 300,00050 educational visitors each year.

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Historic houses provide character, distinctiveness and a sense of place and help create pride in where people live. 87% of British people think the historic environment plays an important part in the cultural life of the country.51 Historic houses are seen as being central to our quality of life and our sense of identity and well-being. The latest English Heritage research shows that in all seven historic environment regeneration areas surveyed, over 90% of people who lived and worked locally agreed that these projects had improved their quality of life.52

The virtual disappearance of grants for the restoration of privately-owned historic houses and the loss of incentives such as the One-Estate Election, have had a significant impact. Since much of the heritage economy is in private hands and operates outside DCMS control, the impact of government funding reductions is in reality much greater than DCMS budget reductions suggest. Government has a critical role in filling the gaps that the market cannot cover.

Over the years, some houses have been sold and have closed their doors to the public, while one owner in eight has had to sell art in order to finance repairs. When art is sold to finance repairs, the chances of it ever coming back to it house of origin in the UK are very slim.

The Impact of Government Spending Cuts 1. The potential negative impact on the UK economy, of significant arts and heritage spending cuts by central and local Government, can be demonstrated by the fact that 80% of international visitors say that their principal reason for visiting Britain is connected to heritage and culture.53 Heritage tourism contributes £20.6 billion to GDP each year, supporting 460,000 jobs.54 Reductions in spending on heritage would be a false economy if they led to reduced tourism revenues, as would be likely.

2. Many historic houses and their gardens are the key players in their local economies, particularly in rural areas, where other opportunities for employment and business activity are often limited. 30,000 people are employed directly at historic houses, or in businesses occupying premises in the grounds.55 The beneficial effect that public visiting to these places has on the wider economy is estimated at £1.6 billion per annum.56 Cuts in spending on grants and advice for privately owned heritage would over time, have a significant and negative impact on the economy of rural areas.

3. The historic environment creates not only a sense of environment, but stimulating and exciting places for learning. For instance, one in five HHA properties offer educational visits. Cuts in grants and advice for privately owned heritage are likely, over time, to reduce the provision of these educational visits, by handicapping the ability of owners to restore and adapt their properties. Cuts in educational spending will also erode the ability of schools to make visits. The combined effect will be a diminished educational experience for school pupils.

4. Since two-thirds of Britain’s historic environment is privately owned and managed, its owners bear the costs of stewardship. HHA owners alone spend £139 million per annum on conserving historic buildings and their contents, with practically no public support. Even this figure falls well short of the amount needed to maintain the fabric of historic houses. As a result, the backlog of repairs at HHA houses has risen by 50% from £260 million in 2003 to £390 million in 2009.57

5. The provision of expert advice by English Heritage to owners and managers and through local authorities is of considerable importance. Without this expert advice many local authorities might, inevitably, make uninformed decisions, which cause damage to the historic environment, or avoid making decisions which are essential to the viability of historic buildings. The consequences, including the possible loss of important places and environments and the effects on quality of life could be very damaging, not just in practical terms, but in relation to loss of identity and sense of place.

6. Spending cuts in this area also pose a threat to the role that historic buildings can play in regeneration of communities and local economies. There are numerous examples across the country of the way in which the historic environment plays an essential role in regeneration through sustainable development. It can make a unique contribution to the quality of the environment and historic houses often support the regeneration of local economies, especially in rural areas, by sourcing local products and services. Castle Howard, for example, does business with 1,000 local companies.

51 Valuing our Heritage (2007). 52 Amiom Locum/English Heritage, The impact of Historic Environment Regeneration (2010). 53 British Tourism Framework Review (2009). 54 HLF/Visit Britain: Investing in Success (2006). 55 Jeremy Eckstein Associates, HHA Survey of Member (2009). 56 Parliamentary Question reply by Rt Hon Margaret Hodge MP (2009). 57 Jeremy Eckstein Associates, HHA Survey of Members (2009). Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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Economies of Scale 7. There are, no doubt, efficiency savings that may be made within the funding systems for the arts and heritage. In particular, partnership working may play an important role in husbanding resources efficiently. 8. However, a reduction in the number of agencies does not necessarily equate to a beneficial economy of scale. For example, English Heritage plays a unique role as the specialist body which advises Government on the historic environment, supporting the sector through grant-giving, advocacy and expert advice, as well as playing a critical role in supporting local authorities in championing the historic environment. 9. Any compromising of English Heritage’s (EH’s) highly professional advice service to owners and local authorities in planning and casework, or where complexity is beyond local expertise, could result in disparate standards and short-term interest outweighing the national good. As such, EH has a different geographical remit and plays a distinct role from that of the Heritage Lottery Fund (HLF) and their two sets of functions would not sit well together within a single organisation. 10. Given that EH currently provides both funding and expertise in support of the historic environment, it is important, in order to ensure the best use of public funds, that its expertise is not separated from its capacity to award grants. So even if, for example, the introduction of a single specialist agency for awarding arts and heritage grants were to appear cheaper, it would provide significantly less value for money than the current system, as a consequence of the separation of roles.

Levels of Public Subsidy 11. Cuts in heritage expenditure have potentially serious consequences, some of which can be demonstrated by examining recent history. For example, reducing EH support to buildings on the Heritage at Risk register by 40% would have resulted in the loss of 460 Grade I and II* buildings during the period 1999–2010.58 12. While any reductions in EH’s ability to deliver these services would be undesirable, it would nevertheless make strategic sense for it to invest in external partnership working in order to deliver more of its objectives in the medium to long term. Investment in the private sector could underpin strong, cost- effective partnerships which benefit the historic environment. 13. Currently, while financial support for privately owned heritage from EH is extremely limited, it is specifically excluded from HLF conservation funding. There is, however, a strong case for reviewing this policy and making HLF grants available to projects in the private sector. This case is explained in paragraph 23 below. 14. Sustainable funding sources are particularly important for the historic environment, because once neglect has set in, the ultimate expenditure required to restore a property may be much greater than if funds were available to enable early repair. 15. Some areas of public expenditure are essential if our heritage is to play its part at the heart of social and economic recovery. Certain areas need to be protected, as a consequence. These should include: — the specialist legislative capability within the DCMS to frame the legislation required to update the heritage protection regime; — proper resourcing for historic environment services in the forthcoming review of local authority finance; and — support for cultural learning opportunities for children and adults, in which heritage plays an integral part. The HHA has put these ideas forward to DCMS as part of our response to the DCMS Structural Reform plan, both on its own behalf and as part of the Heritage Alliance.

The Current Funding System 16. Public investment in the historic environment is needed for the reasons already given, but also generates employment in the tourism and construction industries. In addition, quality of environment is one of the key factors in promoting inward investment and historic buildings have an important role to play in creating places where people want to live, work and visit. The funding system has a role to play in conserving and enhancing the quality of the environment. 17. Given this and the fact that two thirds of the historic environment is privately owned, we would welcome a statement of policy from government that the privately owned heritage should be as entitled to eligibility for grant aid as historic buildings in public ownership, so long as funding is directly linked to a significant public benefit.

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18. The establishment of this principle would not undermine the current system, but could facilitate the establishment of public-private partnerships, which would enhance the existing system and enable the best use of limited resources. 19. The current system lacks fiscal incentives to support the built heritage. Proposals for these are referred to in the final section of this response.

The National Lottery 20. The HHA strongly supports the HLF as a nationwide body delivering the National Lottery for heritage organisations throughout the UK. Its funding is coordinated and has allowed for a more sensitive response to grantees, for example in the percentages of partnership funding needed, particularly for smaller projects. 21. The HHA welcomes the coalition government’s intention to increase the shares to arts, heritage and sport, restoring the original share of 20% in 2012. However, Lottery money should not be allowed to become a substitute for funding that would normally fall to mainstream Government spending and we welcome the commitment to the principle of additionally that this proposal makes, at a time when other sources of public funding will be under greater pressure. 22. Funding distributed by the HLF has had a huge impact on the historic and natural environment and has helped to generate further investment and presented opportunities for regeneration and community growth. The HHA supports the HLF’s role as investor, rather than funder, which means that grants have an effect substantially greater than the funds invested, particularly when they involve other funders and partners. 23. The HHA hopes that the increase in funding available to HLF will pave the way for further support for heritage projects supported by the private sector. Currently, privately owned heritage is, as stated in six above, specifically excluded from HLF conservation funding. We believe that there is a strong case to review this policy and to make HLF grants available to projects in the private sector, so long as the public benefit is sizeable in relation to the grant and particularly in relation to any incidental private benefit. The principle is not new. English Heritage grant aids privately owned heritage (albeit on a tiny scale compared with previous practice) and in other areas, such as environmental conservation, school or hospital building or defence procurement, it is the norm for government to purchase goods or services for public benefit or use from the private sector. 24. The HLF already devotes resources to encouraging applications from underrepresented groups and geographic areas. Increasing this role through additional funding should improve take up from these sectors. 25. The HHA shares the concerns expressed by the Heritage Alliance about the requirement for Lottery distributors to reduce the proportion of funding for administrative purposes. This could have the negative result of discouraging distributors from making smaller grants which are proportionately more costly to administer. Projects with which the HHA has been involved have often had to piece together grants from different funders for relatively modest grants and it would be a great concern if these smaller grants were not properly supported. As an example, the HHA is currently involved in a heritage outreach project which has received £36,000 of public funding but will go on to unlock a further £70,000 of partnership funding and involve a groundbreaking collaborative partnership. 26. The HHA is also concerned that HLF research resources are to be included in administrative costs. The HLF is uniquely able to undertake robust research on the social and economic outcomes of heritage investment and to provide a national UK wide perspective. The Heritage Lottery Fund’s report: Investing in Success: Heritage and the UK Tourism Economy 2010 revealed the scale of the heritage tourism industry in the UK, estimating its gross domestic produce contribution to be £20.6 billion.

Business Sponsorship,Philanthropy and Government Incentives 27. The HHA believes that a mixed economy,involving public-private partnership working and including a robust system of public funding is essential to the health of the arts and heritage in the UK. 28. A strong and unequivocal government commitment to the value of our heritage is needed, in order to avoid demotivating both potential philanthropists (including those responsible for the maintenance of our heritage) and the large number of volunteers who work on the historic environment and whose contribution is increasingly important in times of economic stringency. Such a commitment would also help to focus the attention of potential business sponsors on the benefits of supporting heritage projects. 29. If the historic environment is to meet the challenges which result from reductions in spending—if the gap in funding, and more, is to be made up from the support of large and small-scale philanthropists— practical incentives are needed. Improving the operation of the existing tax regime, for example on Acceptance in Lieu and Gift Aid, would help both to conserve historic houses and extend public enjoyment of the nation’s heritage. 30. Other mechanisms are needed too, to encourage increased and enduring funding from businesses and philanthropists. The historic environment needs schemes similar to the Big Arts Give or Arts and Business’s former Pairing Scheme, by which government support directly stimulates increased investment from private sources. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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31. For the privately-owned historic environment, the principal issue may not be reductions in public funding. A tax regime to stimulate the maintenance of historic buildings, including a reduction in VAT on repairs to all listed buildings, which properly recognises their value to society and the economy, would help significantly. 32. The greater use of Heritage Maintenance Funds would eat into the backlog of repairs referred to in paragraph 4 above and generate employment in conservation skills. However, such use will not be made without changes to the currently unfavourable tax treatment of income and capital gains generated within such funds. The HHA has made proposals for improvements in the tax treatment of HMFs, taking into account that the money generated by them can be used only for the maintenance of nationally important historic buildings, usually open to the public. The details can be found at: http://www.hha.org.uk/our- policies/tax-campaigns.html. September 2010

Written evidence submitted by the National Museum Directors’ Conference (arts 206) 1. What Impact Recent, and Future, Spending Cuts from Central and Local Government will have on the Arts and Heritage at a National and Local Level The UK’s museum sector has been hugely successful in the last 10 years. Statistics testify to museums’ success in attracting visitors: — Between 1998–99 and 2008–09 the number of visitors to national museums rose by 70%, with 40,291,579 visitors in 2008–09.59 — The Taking Part national survey of participation in culture and sport showed that 46.7% of UK adults and 68.8% of children aged five to 15 visited a museum, gallery or archive in 2009–10.60 — The top five UK visitor attractions in 2009—and eight of the top 10—were museums and galleries61 and three UK museums were in the top five most visited international art museums in 2009.62 The NMDC publication Museums Deliver contains more evidence of the success of the UK’s museums, demonstrating the wide-ranging social and economic importance of museums in the UK and highlighting their unique role in society from the global stage to the local high-street. Funding cuts will put this success at risk. As museums are front line services with large fixed costs of caring for collections and buildings, it is inevitable that cuts will impact on public service. Likely impacts of funding cuts from central and local Government include: — Negative economic impact—in particular on the UK tourism economy. Cuts will lead to the loss of the UK’s cultural pre-eminence and international reputation through losses of expertise and profile, as well as damage to the “UK brand”, all of which will have an impact on incoming tourism. — Museums play a leading role in attracting tourists to the UK and contribute significantly to the UK tourist economy, the fifth largest industry in the UK. Britain’s major museums and galleries earned the country £1 billion in revenue from overseas tourists in 2009.63 — Cuts will also impact on the UK’s creative industries—the fastest-growing sector of the economy—for which museums provide a vital resource, inspiring and showcasing creativity and the heritage on which it is built. — Risk to collections—funding cuts will mean increased difficulty for museums in the effective management and care of the national collections. Government funding is crucial—it is a much greater challenge to secure external funding for collections care work as opposed to more public facing activity. — Cuts will result in the potential loss of curatorial and research expertise. This will lead to a resultant reduction in capacity for provision of expert advice to Government, the commercial market, scholars, students and the public; risks to the nation’s scientific literacy; and risks to the ability to conserve objects, since conservation expertise is highly specialised and irreplaceable. — Funding cuts will result in a reduction in acquisition budgets, making it increasingly difficult to secure key objects for museum collections. In particular there is a danger that with the resultant difficulty in securing contemporary items, collections will not reflect today’s society.

59 Figures from DCMS Performance Indicators. 60 Taking Part: The National Survey of Culture, Leisure and Sport Adult and Child Report 2009–10. 61 The Association of Leading Visitor Attractions (ALVA). 62 The Art Newspaper, No 212, April 2010. 63 Visit Britain. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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— Reduction in access—large funding cuts have the potential to cause a fundamental reversal of building broad, democratic and universal access to culture at a national and local level. They will result in a reduction in access to the national collections, particularly outside London and for hard to reach groups. A decline in visitor numbers to museums will also mean a decline in income from ticket sales and secondary spend in cafe´s and shops. — Reduction in programming—particularly education provision and outreach work. The high fixed costs inherent to museums mean that there is very limited “discretionary” spend, meaning programming will necessarily be reduced. Loss of programmes will mean reductions in attendance, particularly of hard to reach groups, as well as a reductions in eg media profile and fundraising opportunities. — Risk to buildings—a reduction in capital funding will mean less investment to effectively and efficiently maintain the buildings (particularly the fabric of historic buildings) and plant within museums’ estates. Many museums already have a shortfall in budgets for buildings and infrastructure improvements. It will then be a challenge to maintain a world-class visitor experience, as well as to run safe and secure buildings. There will also be a loss of ability to invest in measures to reduce carbon emissions, meaning museums continue to use more energy than they need to. — A reduction in work with regional partners—and an inability to develop new partnerships, which will result in less access to the national collections for people across the UK. Funding cuts at a regional/local level and the subsequent reduction in regional museum capacity will also make it more difficult to work in partnership with regional partners. — Loss of capacity for innovation and risk-taking within the cultural sector—as organisations will be forced to focus on core business in response to cuts in resource and capacity.

2. What Arts Organisations can do to work more closely together in order to reduce duplication of effort and to make Economies of Scale — Museums are already extremely efficient—since efficiency is built into the mixed private-public funding model, and the high fixed costs of collections care mean any reductions in funding cuts must be implemented elsewhere—and so little is spent on back office functions. — Museums are already working together to make efficiency savings. Some examples include: — The V&A has shared the Natural History Museum’s combined heat and power since 2006, resulting in carbon savings to the V&A of 700 tonnes per year. — The Natural History Museum, V&A and National Museum of Science and Industry have undertaken a joint procurement exercise for a single service provider for security, worth £50 million. — The National Gallery and National Portrait Gallery jointly procure electricity and are exploring ways to share services in back-office areas and work more collaboratively. — The National Portrait Gallery is moving its storage to within a section of Tate’s facility at Southwark. — Seven national museums are undertaking joint procurement for shared market research provision—to streamline costs and also enabling the exchange of benchmarking data. — A collaborative approach is already taken by many museums. For example, the NMDC (funded by members) helps museums collaborate on projects and research, share information and best practice.

3. What level of public subsidy for the Arts And heritage is necessary and sustainable — UK museums have a successful mixed-funding model of public subsidy and earned and donated income (see section 8 below). Public subsidy is crucial to enable self-generated income to be raised. The independence, creativity and innovation afforded by the current mixed funding model is what makes the cultural life of the UK uniquely excellent. — A necessary and sustainable level of public subsidy is one which enables museums to provide core free public access whilst maintaining buildings and collections in a fit state for future generations. For a sustainable future, we would expect levels of subsidy to stay broadly at their present levels— more investment produces greater returns and public benefit (see section one above for examples of the success of sustained public funding). — Public subsidy has a direct impact on the tourism economy and is necessary if museums are to remain primary tourist attractions (see section one above). — Free admission to national museums is key to ensuring access to the national collections—and is a Government commitment. Free admission is impossible without sufficient levels of public subsidy. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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4. Whether the current system, and structure, of funding distribution is the right one — There are numerous problematic issues around the current NDPB status of national museums— including restrictions on the freedom to use self-generated income through reserves and complicated and overlapping regulations thwarting efficiency and income generation. Modest reforms would make a big difference, although more fundamental reform would be costly and could put collections at risk. — For Ministry of Defence-funded museums, the current annual funding round makes forward planning difficult. Three to five year funding agreements would give greater certainty and clarity. — Renaissance funding has been a key mechanism for improving and maintaining regional museum provision, and it is crucial that funding continues. NMDC has concerns over how this will be managed following the abolition of MLA (see below).

5. What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations — An increase to 20% would have a positive impact and would restore the imbalance resulting from diversion of Lottery funding from arts and heritage to the Olympics. — The HLF is a vital source of funding for acquisitions and capital projects—an increase in funds available will have a positive impact on museums’ ability to care for the collections they hold, to act as a vital educational resource, and to continue to attract visitors and offer a world-class visitor experience. — Lottery funding will be increasingly key as other sources of funding are reduced—however, any increase in Lottery funds should not be used to offset reduced government funding. Whilst Lottery funding is key in enabling projects and acquisitions to happen which would not otherwise be possible, it can never act as a substitute for core public funding.

6. Whether the policy guidelines for National Lottery funding need to be reviewed — Policy should reflect the implications of a reduction in government capital funding—Lottery funding will play a more important role in conserving building fabric, refreshing public offer and therefore maintaining the UK museums’ world-class reputation. — There is a need to ensure arts and heritage funds benefit the entire sector and not just community organisations—the Big Lottery has recently focussed on voluntary and community sectors, excluding statutory bodies. Funds must continue to be available to national organisations and large scale developments—which function as centres of excellence, supporting other sectors and offering broader benefits to the public. — The HLF should ensure it continues to recognise that science is an important part of culture, and be explicit in its support of this. — Reduction in bureaucracy—the HLF could reduce the administration burden by taking a lighter touch approach to project management and monitoring, and simplifying the application process.

7. The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council — NMDC is concerned over the future of MLA functions—particularly Renaissance funding, but also other functions such as Government Indemnity, Acceptance in Lieu, the National Security Advisor role and Accreditation. If these are to be absorbed into the Arts Council, will museum issues be adequately understood/represented? We need to emphasise that museums aren’t just about the arts. — The MLA has a UK-wide role in relation to various functions (including the National Security Advisor, Acceptance in Lieu and the Portable Antiquities Scheme) and as such there needs to be consultation with the devolved governments as to how these services can be handled transparently and effectively. — With MLA abolition there is an issue of the strategic leadership/policy function for the sector— particularly with loss of staff capacity at DCMS. The removal of MLA will break the link between national and regional museums from a strategic perspective. There may be a greater advisory role placed on national museums, both from Government and within the sector. — There is a need to ensure that the risk of core funding being cut under the pretence of administrative changes and efficiencies is avoided. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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8. Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level — Yes—but they cannot be a replacement for government funding. The mixed funding model is crucial. — Raising private funds is difficult for general maintenance and running costs—donors do not want to “repair the roof”. A loss of reputation and profile is also likely to affect levels of private donation—donors like to be associated with thriving, world class organisations. — The extent and timing of support from corporate sponsors and private donors means that it cannot be viewed as a truly sustainable and reliable source of income in the long term For example, the American model of reliance of private funding brings a degree of compromise and vulnerability, and a sudden downturn in private support has recently led to closures of US museums. — Opportunities for raising funds from business and philanthropy are easier to find for some organisations across the sector and in some parts of the country than others. Major donations and sponsorship are much harder to achieve and rely on outside London. Funding and internal capacity cuts make it harder. — Donors have expressed concern at the notion that their funds may necessarily be used to “replace” government monies. There are strong indications that a shift to long-term funding support would need to be achieved over an extended period and significantly incentivised, with assurance that donors were not simply underwriting organisations where the level of government support had significantly reduced and or been withdrawn. — There is an opportunity for growth but it will take time to develop for many organisations and needs Government assistance/incentives (see section 9 below).

9. Whether there need to be more Government incentives to encourage private donations — Yes—changes to the tax regime to support both regular and one-off giving to cultural institutions would help enormously. Favourable legislation to support the setting up of endowments is potentially even more valuable. — The 2008 publication by Britain’s major cultural institutions, Private Giving for the Public Good, outlines the need for greater support to encourage a culture of giving and wider recognition of the contribution made by cultural philanthropists. Specific strands of activity or policy which would fulfil that agenda include: — Incentives to encourage gifts to British collections. — Reforms to Gift Aid. — Lifetime Legacies. — Recognition for donors. — Capacity building in the sector. — The UK needs to develop a culture where people believe it is right and proper to invest in the cultural sector, regardless of tax incentives. A five to 10 year time-frame is required for the development of a better culture of giving. September 2010

Written evidence submitted by the Department for Culture, Media and Sport (arts 210) 1. What impact recent, and future, spending cuts from central and local Government will have on the arts and heritage at a national and local level This Government has sought to protect front line artistic and cultural provision wherever possible. The recent in-year cuts to cultural budgets were focused on back office and lower priority functions. Arts Council England Regularly Funded Organisations, for example, received only a 0.5% reduction in their budgets. Any future changes in funding will adhere to the same principle of protecting front line cultural provision as far as is possible. The impact of any changes will also depend on other changes at local government level, the response of the sector in further increasing self-generated income, changes to the National Lottery good cause allocations and the fostering of philanthropy. It would, therefore, be wrong to attempt to predict the impact now, particularly as the outcome of the Spending Review will not be known until 20 October.

2. What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale This Government would encourage any co-operative work between arts venues, in sharing knowledge, equipment and expertise in order to save money and increase efficiency. There are undoubtedly areas of duplication within publicly funded cultural organisations and we would encourage our Non-Departmental Public Bodies to take the lead in encouraging the organisations they fund to take advantage of the benefits Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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shared services can bring. We welcome Arts Council England’s emphasis on regularly funded organisations taking on a greater role as art form leads, which should provide the support structure for this to happen and also the work done by the National Museums and Galleries, English Heritage and CABE to share and collaboratively procure some back office and service functions.

3. What level of public subsidy for the arts and heritage is necessary and sustainable This Government firmly believes in public support for culture, supported by self-generated income and philanthropic giving. We believe public subsidy should be at a level that allows the cultural sector to operate in a sustainable way; that is why we continue to protect front line artistic provision wherever possible. The Spending Review will set the level of public subsidy for the cultural sector from 2011–12 to 2014–15 and we cannot pre-empt the outcome of that process.

4. Whether the current system, and structure, of funding distribution is the right one This Government is committed to the mixed funding model with funding coming from Government, from earned income and from other sources including sponsorship and philanthropy. We are always looking at ways in which we can improve the distribution of funding, as seen with the changes currently being made to our arms length bodies. We also welcome the changes to funding schemes that Arts Council England have recently consulted the public on, including replacing regularly funded organisation status with partner organisations and specific programme funding. This should provide a more flexible way of providing funding to organisations and individuals, reflecting the differing roles they play in the sector and how they can best contribute to delivering public policy objectives.

5. What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations “The Coalition: Our Programme for Government” states that this Government will reform the National Lottery so that more money goes into the arts and heritage, and also sport. We propose that the arts, heritage and sport should each be increased from 16.66% to 20% of the funding that goes to good causes, restoring the shares they received when the National Lottery was set up. In order to protect the voluntary and community sector funding through Big Lottery Fund, whose share would be reduced from 50% to 40%, we propose to stage the change, with the shares for arts, heritage and sport increasing to 18% on 1 April 2011, and then to 20% on 1 April 2012. A public consultation on this was run by DCMS between 21 May and 21 August 2010 and the responses are currently being analysed. Taking account of the consultation responses, we propose to introduce an Order to Parliament in the autumn. This Government believes that, in line with the principle of “additionality”, that Lottery funds are additional to core Government spending, funds should go to causes that would not otherwise receive funding. It is important and accepted that the Lottery funds arts and heritage among its good causes, sectors which are crucial to the well-being and quality of life of the public. Arts and heritage currently receive, together, around £500 million each of Lottery income a year, although amounts are currently reduced because of the transfers towards the London 2012 Olympic and Paralympic Games, amounting to a total of £322 million from the arts and heritage together over a period of five years from 2008–09 to 2012–13. These amounts are dependent on ticket sales and so vary from year to year, but income has increased and current projections are healthy. Excluding the effect of the Olympic transfers, the Government’s change would mean around £100 million a year extra for arts and heritage combined. In cash terms, therefore, taking account of the additional funds available to arts and heritage distributors after the Olympic transfers end, the increase will be greater. Under current projections, the arts and heritage together can expect to receive the following income, year by year:

APPROXIMATE CASH AMOUNTS BASED ON CURRENT PROJECTIONS

2010–11 2011–12 2012–13 2013–14 Arts £200 million £220 million £285 million £315 million Heritage £200 million £220 million £285 million £315 million

6. Whether the policy guidelines for National Lottery funding need to be reviewed Policy Directions to the UK and England distributing bodies (which are currently Arts Council England and the UK Film Council for the arts good cause and the Heritage Lottery Fund for the heritage good cause) are issued by the Secretary of State. These Directions set the broad framework within which the individual Lottery distributors work and the distributors are required to take them into account. In line with its support for the principle of “additionality”, the Government has no plans to change the system whereby funding decisions are entirely for the distributing bodies to make. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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The existing directions to UK and England arts and heritage distributors have been in place since 2007 and those for Arts Council England and Heritage Lottery Fund include the following: — Fundamental principles of the Lottery as it was set up in 1994, and which the Government has no plans to change, including the need for an element of partnership funding or contributions in kind from other sources; for projects to be for a specific, time-limited purpose; and for projects to demonstrate financial viability; and where capital funding is sought, a clear business plan to show how running costs will be met. — The need to involve communities in making policies and spending money, foster local community initiatives, and support volunteering, in line with the Coalition Government’s proposals for the “Big Society”. — The need to ensure all areas of the country have access to funding. — The need to assess the needs of the arts and heritage and the priorities for addressing them. — The need to ensure that those receiving Lottery money acknowledge it using the common Lottery branding so that the public know where Lottery money has gone. Where there are structural changes to the Lottery distributing bodies, new policy directions will be issued to successor bodies. In the arts and heritage area, the Government has proposed the abolition of the UK Film Council and is considering the role and remit of the Heritage Lottery Fund. We continue to look closely at the current directions for the Lottery in respect of arts and heritage and how they can deliver the Coalition Government’s priorities. The Government will consider issuing new or amended policy directions in any good cause if it is appropriate to do so, as has already been the case with Sport England, for a specific issue relating to Olympic legacy. The Department is currently consulting on a proposed new policy direction to the Big Lottery Fund.

7. The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council DCMS is responsible for a network of more than 50 public bodies and one of the priorities of the Secretary of State has been to examine DCMS’s network of public bodies critically with the aim of improving accountability, transparency and value for money. This forms part of the work being undertaken across Government, and led by the Cabinet Office, to restore proper accountability for activities funded by public money. Public bodies which do not meet one of the three tests outlined will be bought back into departments or devolved if their function is necessary or abolished if not. This work will reduce the number of public bodies, increase the transparency and accountability of the remaining few, and ensure more effective delivery of public services. As a result of this review, the Secretary of State announced on 26 July his intention to make a number of changes that included: — the abolition of the UK Film Council; — the abolition of the Museums, Libraries and Archives Council (MLA); — the merger of UK Sport and Sport England; — the merger of the National Lottery Commission and Gambling Commission (subject to a business case); and — the abolition of the Advisory Council on Libraries and the wind up of the Legal Deposit Advisory Panel. We will continue to explore further opportunities to improve the accountability and coherence of our public bodies landscape. The details and timing of the proposals announced on 26 July are still being finalised and are subject to discussions with the parties involved. Any necessary legislative changes will be made through the Cabinet Office Public Bodies Bill, which is due to be introduced in the autumn. Where bodies are to be abolished we will look to transfer key functions to other existing bodies so as to continue to support our sectors and preserve the necessary expertise. In the case of the Film Council, for example, this will include their current responsibilities for those key mechanisms that support the industry including the film tax relief, which is worth more than £100 million a year, which will remain in place and Lottery funding for film which is set to increase because of the changes this Government intends to make. We are now considering options to transfer the distribution of these Lottery funds to other existing bodies, with a view to reducing administrative costs; and we will maintain key priorities such as strengthening the sustainability of the UK film industry and support its diversity. We will maintain a strong relationship with the British Film Institute which plays an important role in our cultural heritage. We are discussing with the BFI setting up a direct, less bureaucratic relationship with DCMS. The decision to abolish the MLA was taken by DCMS in order to focus on front-line services, and to reduce costs and the number of its public bodies. The MLA’s key functions such as providing strategic leadership for the Museums, Libraries and Archives sectors, administering the Renaissance programme, Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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library improvement work and carrying out statutory functions for cultural property, will continue and will be transferred to other organisations. The DCMS is working closely with the MLA to ensure that the transfer of these functions takes place smoothly.

8. Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level Philanthropy and business support are key elements of the mixed funding model for culture in this country. Some of the most iconic and enduring cultural institutions were established through the generosity of philanthropists and private individuals, from the National Trust to the British Museum, from Tate to the public libraries across the country endowed by Andrew Carnegie and John Passmore Edwards. This support continues today, and is a vital strand of the mixed funding model. For example the support for the Cultural Olympiad by Premier Partners BT and BP, and Panasonic. Enlightened businesses have demonstrated corporate social responsibility through their support for cultural activity and while this has in some cases been understandably constrained through the recession, we hope and believe corporate support for the cultural life of the nation will grow as the economy recovers. The Government recognises the profound generosity of donors, whether individuals, businesses or trusts and foundations across society. The £655 million of private sector support for culture in 2008–09 formed a key element of the overall funding framework, alongside public funding from central and local government, National Lottery support and commercial revenue. We believe businesses and philanthropists will continue to play a vital role in funding the arts and heritage over the long term, alongside public funding, not replacing it and they deserve our thanks and appreciation for so doing.

9. Whether there need to be more Government incentives to encourage private donations It is right that Government should play a role in seeking to incentivise private donations to culture. Philanthropy should not replace Government funding but Government must take an holistic approach to public support for cultural activity and the broad range of business models pursued across the sector. Government needs to provide leadership and pursue a long-term strategy in pursuit of its public policy objectives, while working in partnership with the sector and other funders. Philanthropists also demonstrate leadership, strikingly so in the case of the recently announced Giving Pledge in the United States, and our aspiration for the Big Society is that all members of the public will embrace charitable giving and decide which charities to support, in their communities and nationally. Incentives come in many forms and donors have multiple motivations for their philanthropy, so Government should be cautious about being overly prescriptive, but we believe it is right that people should take informed decisions about charitable giving. We recognise there are occasions on which giving can be incentivised by the tax system, but tax measures also carry costs and it is right that the Chancellor should have primacy in that aspect of taxation policy.Government also has a role to play in ensuring effective giving and that the highest proportion possible of any charitable donation goes to the primary purpose for which it was intended. Transparency and value for money are as important to charitable giving as to any other area of public policy. We must not lose sight of the fact that while the act of philanthropy can be an end in itself, giving pleasure to the donor as well as to the recipient, or creating a legacy which may endure beyond the donor’s lifetime, it is just as importantly a means to an end. The creation, curation, performance and dissemination of great art, and the preservation of our national heritage for future generations, is the fruit of philanthropy. If we can enhance that public benefit through more incentives to encourage charitable giving, we should do so. September 2010

Written evidence submitted by the British Film Institute (BFI) (arts 211) Introduction — The BFI welcomes the opportunity to submit evidence to the Culture, Media and Sport Select Committee in its inquiry into Funding of the Arts and Heritage, as it is very timely on a number of fronts. — The BFI is at a pivotal moment in its history, when the culture of film has never been so important or more all pervasive across society as a whole—something that has been reaffirmed by Government in its recent review of Arm’s Length Bodies. — The BFI was founded in 1933 and granted a Royal Charter 50 years later. It has five objectives: — to encourage the development of the arts of film, television and the moving image throughout the UK; — to promote their use as a record of contemporary life and manners; — to promote education about film, television and the moving image generally, and their impact on society; Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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— to promote access to and appreciation of the widest possible range of British and world cinema; and — to establish, care for and develop collections reflecting the moving image history and heritage of the UK. — We are grant-in-aid funded by DCMS—currently through the UK Film Council until April 2011— receiving £16 million per annum, a grant that has remained static for the past six years, in effect going down in real terms every year. The BFI also receives an additional £1 million levy from commercial terrestrial broadcasters to fund the television element of the BFI National Archive. A further 58% of our total funding is self-generated income, up by 50% compared to five years ago. — This Inquiry is timely not just in looking at the impact of the proposed cuts to the arts, but also in the proposed restructuring of how the arts are delivered—including film. Both of these changes have a significant impact on the BFI. — Our mission is to ensure that everyone has access to the broadest choice of film. We show and distribute the sort of film that simply wouldn’t be available without the BFI’s intervention. It is this broad spectrum of world cinema presented by the BFI that acts as a catalyst to spark, inspire and influence continued development across the whole of the creative industries. — A vibrant film culture is the essential bedrock for a thriving film industry, whether that it is delivered through the BFI London Film Festival which champions creativity and originality by annually showcasing the best of contemporary world cinema, or through BFI Southbank’s dynamic programme of screenings, on-stage talks and events such as Future Film, Dark Fibre or Movie-Con. The BFI is a melting-pot for discussion and debate around film, television and the moving image. — The backdrop to this is the BFI National Archive which cares for the national film collections. It is constantly refreshed and the BFI continually drives audiences to it so people can understand and appreciate their own place in society, for instance through TV productions such as the Home Movie Roadshow recently aired on BBC 2 or a major documentary featuring a dramatic film of Scott’s Antarctic expedition due to screen on the Discovery Channel this autumn. — Equally, the Archive and collections provide an understanding of film as an art form, equal in stature to theatre, dance, painting or music. It is a unique source of enjoyment and critical appreciation for audiences, and a well of inspiration for filmmakers to gain insight to the work of those who have gone before. — The BFI’s evidence to this inquiry is given within the context of our mission and aims.

Response to Specific Issues Posed in the Inquiry 1. What impact recent, and future, spending cuts from central and local Government will have on the arts and heritage at a national and local level 1.1 In terms of the Arts as a whole, the cuts, if they are as deep as proposed (25%–40%), will have a devastating effect as it is unlikely that private or public sources can come to the rescue in such quantity fast enough. Philanthropists do not favour giving money to plug gaps in funding and there is less money around anyway. 1.1.1 With increased emphasis on financial income, organisations will be inherently risk averse leading to reduced innovation which is essential for creative endeavour. 1.1.2 At a time of recession the arts play a vital part in the confidence and international identity of the national psyche—they also bond communities which will be much needed in the proposed changes across the UK, moving from regional to local structures. 1.1.3 During the Olympics in 2010 a global spotlight will shine on the UK and with this level of funding reduction, the overall programme of artistic excellence, scope and ambition will be significantly curtailed— whether practically in terms of reduced opening hours/days, or the ambition of projects undertaken. 1.1.4 Britain’s cultural scene is a major attraction for visitors from home and abroad and it makes a significant contribution to tourism and the economy. Spending cuts are likely to result in reduced output or scope of programming in the arts, which will have a negative impact on arts organisations’ ability to generate revenue as footfall decreases. Arts organisations often work collectively to attract visitors to an area and many businesses local to that area are equally reliant on those visitors. 1.1.5 There are very specific skills that will be lost—and continuity of these skills will be under threat. One example will be conservators and curators—all organisations will be forced to reduce these—curators are the result of years of personal and professional expertise in specific areas. 1.1.6 Organisations which are delivering less, and less able to “sell” themselves will be less attractive to philanthropists. Even small donors like to invest in success. 1.1.7 Capital funding reduction will lead to revenue monies being spent to “shore-up” failing estate and systems which in the long run will be much more expensive for the public purse. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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BFI-specific 1.2 The BFI recognises that difficult decisions have to be made in these challenging times and acknowledges that it must play its part in helping to reduce public spending. However, it is important in this context that the Committee understand the BFI’s current funding position.

Self-earned Income 1.2.1 The BFI has been on the same grant-in-aid (£16 million pa) since 2004. For every £1 it receives in grant, it raises a further £1.50 in self-generated income.

Pension 1.2.2 The actuarial deficit on the BFI pension scheme of £15 million is costing the organisation nearly £1 million per annum in additional contributions.

Screen Heritage Strategy 1.2.3 A report published by the House of Commons Select Committee in 2003 said: “The BFI should take the lead within the UK film and TV archive community and champion the whole sector, particularly the regional archives, alongside safeguarding its exemplary reputation amongst international peers. An over- arching national strategy promoting both good curatorship and increasing accessibility should be vigorously pursued.” 1.2.4 In response to this, and at the request of DCMS, the BFI developed and is leading the Screen Heritage UK programme. A government capital investment of £25 million announced in 2007 is to fund three core strands: a secure storage and database; identification of significant collections in regional film archives; and digitisation for access. 1.2.5 In the funding cut announced in June, the Government reaffirmed the vital investment needed for new state-of-the-art vaults with the right environmental storage conditions to ensure the preservation and safety of the BFI National Collections. It also reaffirmed funding for regional archive collection identification. 1.2.6 However, a cut of £2.5 million was made to the digitisation and access strand of the programme and this seriously impedes the total success of the whole project in that whilst the national collection is safe and we know what material is in there and in other significant regional collections, the public cannot access the content as originally planned.

BFI Film Centre 1.2.7 The BFI’s business case demonstrates the pressing need for a landmark cultural centre that addresses its very severe and critical estate issues. It would enable the BFI to consolidate its crumbling estate and help make it more economically sustainable.

1. The British Film Industry—September 2003 1.2.8 In June 2010 the Government withdrew its funding pledge of £45 million for the BFI Film Centre, which triggered a further cut of £5 million that had been pledged by the LDA. This has stalled the BFI’s plans to replace life-expired facilities on London’s South Bank which are struggling to cope with growing public demand for access to their cultural heritage and to world cinema. Given the condition of the BFI’s estate, delaying investment will add a burden to public finances in the long term and considerable ongoing risk to income should the estate fail. 1.2.9 Furthermore, the BFI’s plans included significant partnerships across a range of organisations— from universities to venues—to ensure that the centre acted as a pivotal node in a digitally enabled network across the UK to provide the widest possible public value. The BFI’s ability to achieve this is undermined by the cut in funding for the Film Centre.

Impact of the cuts on the BFI 1.2.10 We have been asked to model 25% and 30% cuts in our grant-in-aid. Taken together with a flat cash grant for the last seven years, the effect of inflation and the additional £1 million per annum pension top-up requirement, the total cuts to be found from the BFI are 6.5 million by year four.

1.2.11 In the last six years our self-generated income has increased on average by 10% per annum but this is now flattening out. Nevertheless we are looking at new sources of income, particularly in the digital arena and exploitation of the BFI brand abroad. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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2. What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale 2.1 This must be one of the avenues to be explored, but we are uncertain of the quantum of savings possible. We are already exploring the potential for sharing common services such as Finance, Human Resources, Estates and IT. From our own experience, we are doubtful that there is significant opportunity here as after six years of driving through economies, the quantum of savings we can make in shared services is very low. 2.2 Recent analysis commissioned by the BFI from HP shows that the BFI’s support services are so old, without significant investment it is questionable whether the systems are even migratable to the modern platform needed to gain any benefit from shared services.

3. What level of public subsidy for the arts and heritage is necessary and sustainable 3.1 This is a very difficult question to answer. Public subsidy is needed to support artistic endeavour and allow such expression to find audiences—endeavour that wouldn’t happen otherwise without public intervention because at the grass root level its market value is unproven. 3.2 Sustainability has to be considered in a much wider context, outside the artistic world. The immediate value of investment in the arts is difficult to quantify, the chain of investment and effect is often long and too complex to track accurately. And yet we all know that the reputation of great cultures and great civilisations rests on the vibrancy of how that culture finds expression through artistic endeavour and the legacy that this lays down to inspire future generations. The reason we know this in this country, is precisely because we have one of the most vibrant, joined-up, wonderfully diverse and significant cultures in the world. The legacy of global reputation speaks for itself. 3.3 Investment needs to be prioritised to achieve the following: 3.3.1 It is important that Britain maintains an international profile culturally and creatively—no more so than in film. It is one of our great global successes and an economic generator. If it is to be allowed to continue to grow and provide increasing contribution to Britain’s GDP then it needs increased and sustainable investment. A vibrant film culture is the bedrock for a successful, thriving industry. 3.3.2 The national collections cared for by the BFI are a vital part of our cultural heritage. The costs of preserving and restoring—let alone distributing—such an extraordinarily complex medium are very high. Once a film deteriorates it is lost forever. However the cost of restoration is very high. 3.3.3 In this digital world there is an audience expectation that they should be able to access the collections online, which requires funding for preservation then digitisation. 3.3.4 Furthermore, it is not always possible due to rights ownership. 3.3.5 There are other things the Government could do which would not increase public subsidy but which might help organisations such as the BFI offset cuts, for example: allowing the BFI to make available “orphan works” held in its collections. Income generated from exploiting these works would be ring-fenced so that rights holders could be paid if they eventually came forward to claim their works.

4. Whether the current system, and structure, of funding distribution is the right one 4.1 With considerably less money to ago around, we offer the following considerations: 4.1.1 Streamline funding—we should ask ourselves no matter however painful the implications, how many layers of administration should there be between the money and the audience or artist? Every layer adds additional “back office” cost. Should there be need for more than two layers? 4.1.2 Consider new governance structures for organisations to be freed up so they can take a more entrepreneurial role. The BFI, in designing a new direct relationship with DCMS, is looking at the possibility of a “US” style Board structure, with a two tier Patrons for major donors and a smaller formal Trustee board. We are also seeking structures that will allow a more flexible investment/borrowing model. 4.1.3 The BFI has benefited, and could benefit significantly more, from co-productions with broadcasters. Publicly funded broadcaster partnerships should be encouraged as they enhance audience take-up, drive revenue and enhance the partner brands. 4.1.4 In seeking a “local” agenda—care needs to be taken not to splinter funds into such small pots that they cannot be sustainable or achieve anything really valuable in themselves. The other danger is that in seeking “local” rather than “regional” structures, more resource is actually spent knitting together these small pots of money. 4.1.5 Lastly, the production of statistics, target information and “proof points” of delivery are expensive. Could they be reduced? Much of the answer to this is how a greater pact of trust can be fostered with the public, where public value is achieved through actual engagement, rather than through KPIs or something similar. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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5. What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations 5.1 We refer the Committee back to answers given in response to question 4 above. However, we very much welcome the government’s commitment to increase Lottery funding by reducing overheads and providing greater direct benefit to the public with increased share going to the arts.

6. Whether the policy guidelines for National Lottery funding need to be reviewed 6.1 See answer to Question 5.

7. The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council 7.1 These are very difficult times and call for difficult decisions to be made. We have to look hard at where value is added and make sure that as much as possible goes to frontline services. 7.2. The BFI is pleased that it will from 1 April 2011 report direct into DCMS. The announcement to this effect has great significance for film culture in Britain as it allows the BFI to have a conversation at a departmental level alongside other national cultural bodies and collections, giving a much needed direct voice for film as an art form. The Secretary of State proposed in his announcement: “establishing a direct and less bureaucratic relationship with the British Film Institute.” The benefit will be a new, freer way of working that allows us to explore other governance structures. 7.3 It is interesting that the reaction from the film industry focused on the need to keep funding and tax credits intact. The BFI agrees and was relieved to see in the announcement an absolute commitment from central Government that neither the lottery funding not tax credits were ever at risk, and that going forward its cultural policy and strategy for film will have equal voice and prominence. 7.4 It is critical, however, that specific skills and expertise are not lost along with the arms’ length bodies being closed. 7.5 We refer the Committee to answers in response to question 4.

8. Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level 8.1 They already do. There are hardly any of the larger charities that don’t have a well developed fundraising department tasked with raising those funds that GiA has, in recent years, failed to cover with diminishing investment, increasing costs and higher ambitions. 8.2 We can see that raising money for projects outside of London can be more challenging, particularly when there is less available money to go around. 8.3 It is commonplace to compare the US model of philanthropy and charity giving with that in the UK. However, there are fundamental differences between the two that require a wholesale change in attitude from the public in the UK, with a tax regime that is as supportive before we are likely to see the same degree of giving. 8.4 Corporate and philanthropic donors do not want to plug gaps in funding, they want to achieve additionality. They are less attracted to investing in organisations that are threatened. They are less likely to invest in the non-attractive projects such as new roofs or drainage.

9. Whether there need to be more Government incentives to encourage private donations 9.1 We would welcome more Government incentives to encourage private donations. 9.2 A review of tax incentives that benefit private donors in a similar way perhaps that Gift Aid does to charities would help the development in the UK of a widespread culture of philanthropic giving. This is akin to the more generous personal tax relief schemes that exist in the US in the philanthropic sector. 9.3 The BFI would like to see the acceptance-in-lieu scheme extended to living donors, not just restricted to the estates of the deceased. In other areas of the cultural sector acceptance-in-lieu has brought over £250 million worth of works into the public domain. We need to ensure that film collections can be preserved intact and saved for future generations to enjoy. 9.4 A similar move should also be considered for the assignation of rights to films and film collections in lieu of tax so that that work can be exploited to provide greater public value without additional burden on public finances. 9.5 We would like to see greater Government support for projects that whilst they do not pledge public funding, the intent and commitment instils a level of confidence amongst others who may be more disposed to invest. September 2010 Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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Written evidence submitted by Renaissance South East (arts 212) 1. Summary This document outlines a preliminary response from Renaissance South East to the Culture, Media and Sport Committee inquiry and call for evidence for The Funding of the Arts and Heritage. The key points include: — Museums should be considered as part of the broader heritage sector in this inquiry. — Uncertainty of future funding models can have a negative multiplying effect. — Sector consolidation is likely to result in knowledge loss and reduced capacity to support local museums undertaking beneficial transformation.

2. Response to Issues 2.1 What impact recent, and future, spending cuts from central and local Government will have on the arts and heritage at a national and local level 2.1.1 For the purpose of this response, heritage is considered to incorporate museums. Museums are an integral part of this cultural landscape providing for the cultural entitlement needs of local communities and supporting wider tourism agendas. The Renaissance programme to date has encouraged the museums sector to transform itself into a dynamic cultural asset that contributes significantly to economic and social priorities. The South East Museum context is illustrated in Appendix A. 2.1.2 Proposed spending cuts at both a national and local level are likely to result in a reduction in the capacity of museums to sustain the quality of outreach, learning, museum support advice, training and collections care. The reductions are likely to result in staff consolidation and associated experience/ knowledge loss from the heritage sector. 2.1.3 When considering wide spread spending cuts it is necessary to consider the multiplying impact it may have in the local economy and the capacity of the heritage sector to recover in the longer term. Appendix B outlines some of the recent achievements of Renaissance South East to highlight what the opportunity cost could be. 2.1.4 The potential impact of a combination of reduced national and local investment in heritage may include: — Local Authority Museum consolidation of capacity and an associated reduction in ancillary support to independent local museums. — Consolidation of museum assets—requiring advice on ethical disposal of collections and closure of museums. — Reduce capital budget expenditure on the maintenance and enhancement of facilities and buildings. — Reduced support to museum accreditation and the sustainment of standards. — Reduced capacity for museums to undertake quality outreach and community engagement programmes. — Reduced capacity to undertake volunteer coordination and provide opportunities for volunteering in the heritage sector. — Reduced opportunity to undertake good practice sharing and continual professional development as specific interest networks become unsupported and training budgets are reduced. — Knowledge/experience lost from the sector as staff levels reduce. 2.2 What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale 2.2.1 There is scope for a number of heritage organisations to collaborate more closely to ensure the efficient use of public funding to support the sector. The short nature of a project based approach to cultural support (typically with a business case of two years) limits the substantial benefits which could be realised from considering them as part of a transformational programme for the heritage sector. 2.3 What level of public subsidy for the arts and heritage is necessary and sustainable 2.3.1 Renaissance South East has been working with museums to help them become more economically sustainable and giving them the skills to develop into thriving, cultural organisations. The programme is transitional and will take a period of time to fully realise the benefits. Investment is necessary for this transformational programme to continue. 2.4 Whether the current system, and structure, of funding distribution is the right one 2.4.1 The abolition of the MLA presents an opportunity to establish a more sustainable model of funding for museum transformation in which it directly meets the regions needs and has a low central administration. The process of transition needs to be transparent and have adequate time for local consultation. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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2.4.2 This investment must be highly targeted. We propose to build upon the achievements of Renaissance and focus on activities that strengthen the economic performance in the regions. Specifically future funding should be used to support activities that encourage national and international tourism, sustain quality of place at a local level, improve the quality of life for all residents, and encourage centres of excellence. Activities that develop a skilled workforce and that inspire Big Society. 2.4.3 The South East region is one of the greatest contributors to the nation’s economy and will be vital to its recovery. Many of the communities in the South East have high cultural participation, cutting back significantly on investment in museums and wider cultural activity in this difficult financial climate will be counterproductive in terms of economic recovery in the short and longer term. Clearly efficiencies and savings need to be made, but now is the time to continue a good degree of investment if we are to look after the reputation of the South East as a quality place to live and attract business. See Appendix A for pre´cis of the South East Museum context. 2.4.4 This investment must be highly targeted. We propose to build upon the achievements of Renaissance and focus on activities that strengthen the economic performance of the South East. Specifically future Renaissance funding would be used to support activities that encourage national and international tourism, and that sustain quality of place at a local level. Activities that develop a skilled workforce and that inspire Big Society. The programme would continue to make museums more economically sustainable, joining up with other cultural providers to maximise resources and potential. 2.5 What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations 2.5.1 Jeremy Hunt’s promise of more lottery money for heritage, that the Heritage Lottery Fund would receive an increased share of lottery profits, back to the levels it received when the lottery was founded in 1994 has been welcomed by museums. As other sources of capital funding for museum-related projects become harder to access, the Heritage Lottery Fund will become even more key to museums’ drive to revitalise their services and ensure they are relevant to modern audiences, so that they can continue to increase the public’s interest in the past and the world around them. 2.6 Whether the policy guidelines for National Lottery funding need to be reviewed 2.6.1 There needs to be an increase in the flexibility regarding match funding as other sources of funding become even harder to unlock. 2.7 The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council 2.7.1 The most significant impact of the changes is the increased uncertainly it has perpetuated in the heritage sector. The abolition of the MLA as a wider umbrella organisation for the sector increases the need for strong regional organisations such as Renaissance which can support the transformational change of the sector. 2.8 Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level 2.8.1 Yes, there is scope for greater involvement of business and philanthropists in the long term funding of the heritage sector. This approach requires further investigation to identify how external funding can be optimised to support the heritage sector in the long term. Something in here about how successful Arts and Business has been as an organisation especially within the arts sector and how this can possibly be replicated in the museums sector? 2.9 Whether there need to be more Government incentives to encourage private donations. 2.9.1 Private donations to museums will be become an increasing source of revenue, especially in larger scale capital projects. Government incentives to make private donations easier would be welcomed by the sector. September 2010

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. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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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 England.64 In 2008–09 this investment supported a total of 1,099 theatres, concert halls, arts centres and museums and galleries.65 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.

64 £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). 65 See Culture, Sport and Recreation Statistics 2008–09 (CIPFA, 2009). Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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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 and 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 £360 million in 2008–09. Funding to the same organisations from councils and local partners was £141 million 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 £177 million in the eight English regions outside of London, with councils and local partners investing £100 million; a ratio of national to local investment of Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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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 regions.66 In the East Midlands, ACE invests £23 million in RFOs with local partners contributing £19 million, 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.”67 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; and — 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.

66 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/ 67 See: http://www.artscouncil.org.uk/media/uploads/arts council stakeholder focus research.pdf Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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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

Written evidence submitted by Liverpool City Council (arts 54a) Liverpool City Council:Culture Liverpool 3September 2010 Executive Summary Liverpool’s regeneration continues to be shaped and improved by our uniquely strong cultural offer. We have a rich programme of events, community activities, performances and exhibitions through the city’s exceptional venues and festivals. Liverpool City Council (LCC) works closely with the cultural sector and currently provides annual funding of £4.2 million through our Arts & Culture Investment Programme (ACIP). The City provides a major events programme that involves our cultural sector and brings exponential benefits. Furthermore LCC is engaged with the independent arts networks that represent the sector such as LARC (Liverpool Arts Regeneration) and COoL (Cultural Organisations of Liverpool) and provides non-financial support through partnership working, facilitation and joint work to enhance delivery of cultural services. This has brought tangible and significant economic and social benefits and contributed to the repositioning of the city as an international tourist destination. We propose that: — Culture is not an “add on”—it’s an integral part of our society, but needs support and nurture to fully realise its inherent value. — The CASE Study has already demonstrated the economic and social significance of cultural activity (tourism, economy, employment, training, education, community cohesion, sense of place and identity, wellbeing). In times of economic recession and reduced spending power, cultural providers can help individuals and communities cope and improve quality of life in non monetary ways. LCC is concerned for the fragility of the cultural sector and the delicate balance of funding that is reliant upon public subsidy, and how this will impact on the regeneration of the city: 1. Parts of the sector operate close to their financial and organisational margins and are vulnerable to cuts in funding. Current scenarios and contingent plans will broadly allow changes to be managed and structured. However, further reduction in funding will impede ability to change and will lead to regression of the sector and will reduce the value and impact of their activities. Stronger strategic guidance and support is required to give the cultural sector the opportunity to respond to the (as yet) under defined requirements of national government and to enable them to refocus their activity to meet strategic aims using available resources. 2. Culture should be embedded at the core of the remit of the emerging LEPs, who should be responsible for communicating, coordinating, engaging and developing the cultural sector to meet new agendas of the Big Society. We need to embed culture firmly to fully realise the benefits to quality of life. 3. We need “buy in” at the highest levels of national and local government to the multiplying value of culture to education, health and economy, and to be able to support the cultural sector to ensure the cultural contribution to the regeneration of our city continues unabated. 4. We need more official emphasis and endorsement of the value of culture to Quality of Life and to ensure that there are socially accessible routes to these benefits. We need to ensure that resources are focussed in the areas of most need and that strategic regional support is maintained. Cities are already well equipped to be able to make decisions regarding the requirements and allocation of cultural resource. We require less complex and burdensome administration, and greater autonomy to strategically focus our programmes of work. 5. The cultural sector still has potential to deliver stronger quality of life benefits at a neighbourhood level. Value and impact can be developed using coordinated approaches to match funding for neighbourhood & grass roots projects, to encourage cross authority (or joint agency working) and to maximise the use of available assets such as historic buildings. 6. Policies need to strongly reflect that statutory and funded bodies understand and consistently espouse the value of culture to Quality of Life. Funding policies should be reviewed (along with non cultural policies) in order to provide cultural progression routes through school, employment opportunities, social activity, and built environment. Lottery funding needs to benefit those who buy lottery tickets. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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7. Provision needs to be made for support from experienced and qualified sources for both the Museum and Film sectors, to maintain and improve their successes. 8. It is not realistic to consider private sector funding as a substitute for public sector subsidy.The “culture of cultural support” is not yet embedded, and requires more development, incentive and advocacy. It is unlikely to proportionally benefit the smaller end of the sector. 9. The current economic climate will not encourage patronage without further incentives. The mechanisms for developing patronage are not as well developed as those for sponsorship. There is a challenge in meeting the desired results in certain areas of work, and in particular geographical locations.

1. What impact recent, and future, spending cuts from central and local government will have on the arts and heritage at a national and local level? 1.1 Current funding cuts and uncertainty over future funding are having a detrimental effect to the morale of cultural organisations and are affecting their ability to plan. Whilst the seriousness of the economic situation and the need to reduce public debt is understood, the cultural sector is generally pessimistic about the immediate future, and their ability to maintain effectiveness at reduced funding levels. There are fears that the progress made will be reversed and that rapid change will be forced upon them. 1.2 Liverpool is currently anticipating the arrival of the new Museum of Liverpool in 2011 which will be a major tourist attraction, we are concerned about the impact upon National Museums Liverpool (NML), and urge maintenance of support to this successful & effective organisation that brings education, engagement and visitors to the city. In the absence of a clear national vision, plan and progression route for funding of culture, there is difficulty in putting together contingency and emergent planning to ensure that the cultural sector remains relevant and has impact. The cultural sector needs better guidance, some certainty of the level of funding available, and more information about what outcomes are required. In Liverpool the sector has grown in recent years due to the European Capital of Culture in 2008 and is in the process of consolidating. It contributes enormously to the aims and objectives of the city. The Mersey Partnership have identified that tourism has the potential to grow by another £100 million and create a further 2000 jobs in the region. Culture is an essential component in ensuring that this potential is met. 1.3 However it is also a fragile sector that could be considered as under funded. Many of Liverpool’s small and medium organisations operate to tight financial margins, based on frugal management and judicious fundraising. They are a success in this respect but are vulnerable to funding cuts. Top slicing 15% or 25% will render some organisations ineffective, as this is where they are able to produce artistic programme and real impact. We have assessed our organisations and are confident of their abilities but also aware of their financial precariousness. However there is still work to be done towards optimisation of the sector and improvement of partnerships and efficient use of resources. There is a need for planning time and structured change to be “incentivised” along with a clear vision and pathway to future norms and expectations for cultural delivery. Additionally, Liverpool has an array of complex heritage assets that require sustained public investment, otherwise risk losing viability. 1.4 Parts of the sector operate close to their financial and organisational margins and are vulnerable to cuts in funding. 1.5 Current scenarios and contingent plans will broadly allow changes to be managed and structured. Further reduction in funding will impede ability to change and will lead to regression of the sector and will reduce the value and impact of their activities. 1.6 Stronger strategic guidance and support is required to give the cultural sector the opportunity to respond to the (as yet) under defined requirements of national government and to be able to refocus their activities to meet new strategic aims using available resources.

2. What arts organisations can do to work more closely together in order to reduce duplication of effort and to make economies of scale 2.1 Liverpool is well networked with major organisations clustering within Liverpool Arts Regeneration Consortium (LARC) and small medium organisations in COoL (Cultural Organisations of Liverpool). The Merseyside Local Authority Arts Officers Group (MAOG) are working with Liverpool organisation “Arts in Regeneration” to look at best practice in Arts & Health and Wellbeing across the City Region in order to identify efficiencies, proposal and develop best practice frameworks. These organisations are already building cooperation and coordination of resources to be more effective: (see footnote and LARC response68.) LCC is reviewing how it supports the cultural sector and is moving closer towards: 2.1 Facilitation: — A clearer strategic focus for activities and better communication.

68 LARC (From the Liverpool Way) : It’s about making the most of Liverpool’s remarkable cultural assets, and the major cultural organisations delivering to their individual and collective strengths, including outstanding international programmes and linking these to local communities and visitors to the city in a strong, collaborative partnership with the city council and others. It is about creating a movement for arts and culture not just monuments, about new ways of connecting creative producers, institutions, and creators to communities and social networks. It unlocks, opens up and makes visible the potential and talent in these communities and brings great art to Liverpool in a way that draws out and builds on our talent. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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— Brokering of partnerships and projects. — Better tools for commissioning. — Training for organisational development. 2.2 Advocacy and Support: — Providing a structured support programme (“Fit for the Future”) through joint working with support agencies such as LCVS, Merseyside ACME, All About Audiences and Arts Council England. — Support for enterprise such as signposting to fundraising opportunities. — Coordination of Business support. — Networking with business sector (for example through A&B, BIA, ACME, Business Link.) — Developing supportive toolkits including websites and communication forums. 2.3 Clear communications: — Marketing and Tourism advice. — Better Web presence. 2.4 Better Administration: — We will review and simplify our monitoring procedures to reduce administrative burdens. — We will consider alternative monitoring methods that enhance relevance evidence and advocacy for culture. — We will review and streamline the terms and conditions of our grant offers. 2.5 We need culture to be considered on a statutory basis by emerging Local Enterprise Partnerships, and for recognition that culture is an essential component of contributing to the involvement of our communities in “Big Society.” Cultural Organisations are ideally placed to change mindsets, engage new participants, build enthusiasm, engender volunteers, share &build skills; all the hallmarks for the building of social capital. They require structured resources and incentives to be able to do this, through clear vision and guidance towards outcomes that are sustainable. Embedding of cultural components in health, education and community frameworks will have the double effect of creating new markets for cultural activity, and improving quality of life without direct linkage to economic growth. 2.6 Culture should be embedded at the core of the remit of the emerging LEPs, who should be responsible for communicating, coordinating, engaging and developing the cultural sector to meet new agendas of the Big Society. We need to embed culture firmly to fully realise the benefits to quality of life. 3. What level of public subsidy for the arts and heritage is necessary and sustainable; 3.1 It is not possible to attribute an ideal amount to each organisation in percentage terms, as the nature of organisations varies widely.Allocation amounts are not the only issue but how the resources are allocated. In Liverpool LCCs grant funding scheme of £4.2 million generates match funding of over £20million, involves thousands of people in events and workshops, and brings millions of visitors. There is still potential for to build on the successes of these initiatives and build community involvement, enhanced visitor attractions and a better offer to our communities. The LCC Cultural Champions is an initiative that aims to bring the interface between the public, the cultural sector and the local authority together and early indications are of improved advocacy and engagement at a local level; (see http:// liverpoolculturalchampions.wordpress.com/about/.) 3.2 Liverpool is also developing a Heritage Investment Framework that will improve the dynamics of the City Councils relationship with English Heritage and the Heritage Lottery Fund. 3.3 However certain activities, particularly those with social development or artistic quality at their core do not always have an immediate economic return and require specific and focussed financial support to realise their long term benefits in both economic and social terms. These activities are often time limited (eg Creative Partnerships/Find Your Talent) and are not given time to engender real social change. Geographical areas receive support, and then lose momentum as the initiatives end and the funding moves to other problem agendas. There should be a long term strategy for the embedding of cultural infrastructure into public services, (education, health, environment), for the development of initiatives that bring long term benefits, creating new audiences for culture and involving more people. We need to change mindsets so that culture is embedded in our services, and that it’s contribution to quality of life is fully recognised. 3.4 The expectations in terms of outputs and outcomes could be simplified and standard models of evaluation should be promoted that are simple to use and explain cultural impact. Use of internet and electronic communications can help enable this and provide credible data. 3.5 We need to ensure that an understanding that quality cultural provision is essential to education, built environment, community & youth work and health improvement. Local Enterprise Partnerships will be ideally place to ensure the development of effective and positive collaborations that can have real impact. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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3.6 In terms of heritage, there are real costs associated with heritage designations (defined by Government) in addition to the costs of good stewardship and this should be balanced with some degree of state funding. 3.7 We need “buy in” at the highest levels of national and local government to recognise the multiplying value of culture to education, health and economy, and to be able to support the cultural sector to ensure the cultural contribution to the regeneration of our city continues unabated.

4. Whether the current system, and structure, of funding distribution is the right one 4.1 The system has a general clarity, but maintains a distance between arts/culture infrastructure, third sector (community services), and private sector. Partnerships are therefore driven by pro—active initiatives that have to be strategically aligned through sometimes complex multi agency arrangements and funding schemes. The complexity of these arrangements can lead to duplication or dilution of impact. For example, a time limited project in one neighbourhood, with no strategic arrangements for progression by participants or community. At the same time a similar project, funded by a different agency in a nearby area, begins, duplicating development costs. 4.2 Communication is an issue, and the tools or incentives for this should be developed so that assessment of Lottery funded projects includes current and proposed projects being visible to strategic partners and to neighbourhood stakeholders prior to assessment of new proposals. 4.3 Arts Council England’s Grants for the Arts is a clear process that has become well understood by the arts sector. It does require a certain amount of understanding and prior knowledge, and Local Authority Arts Officers provide essential support to the development of successful bids, providing local knowledge and strategic input and should be encouraged. ACEs efforts to involve Local Authorities in the decision making processes of GFA, (and RFO assessments) are beneficial to both partners in developing a joint approach to arts infrastructure. However a similar but wider joint approach to Lottery funded Sports/Heritage/ Community projects would benefit assessment of resource allocation. Cities are already well equipped to be able to make decisions regarding the requirements and allocation of cultural resource. We require less complex and burdensome administration, and greater autonomy to strategically focus our programmes of work. 4.4 Improvement could also be made in public perceptions of the benefits of the cultural arts to health, well being of individuals, and to social outcomes generally. Common models of evaluation and tools for measurement require standardisation. Measuring audience numbers does not give a full picture as evidenced by the CASE study. 4.5 We need more official emphasis and endorsement of the value of culture to Quality of Life and to ensure that there are socially accessible routes to these benefits. We need to ensure that resources are focussed in the areas of most need and that strategic regional support is maintained. 4.6 Cities are already well equipped to be able to make decisions regarding the requirements and allocation of cultural resource. We require less complex and burdensome administration, and greater autonomy to strategically focus our programmes of work. This will provide the individual & distinctive city characteristics that will provide both local and national strength to our cultural offer.

5. What impact recent changes to the distribution of National Lottery funds will have on arts and heritage organisations 5.1 This change is intended to bring more funding directly to arts and heritage organisations. However, reductions to Big Lottery Funding will impact on community focused or based organisations who do not have organisational infrastructure and specialist staff to develop their business. It may become more difficult for grass roots organisations who rely on support agencies to initiate projects and sustain themselves without the advice, experience and expertise of professionalised services who rely on Big Lottery funding. 5.2 This may also impact on the Equality profiles of organisations and audiences/participants, as deprived areas will suffer a lack of the right skills to access funding and management. Provision for the (non cultural) artistic support of SME cultural organisations requires further consideration. During 2010 Liverpool City Council and Liverpool Primary Care Trust have jointly funded 46 small “Grass Roots” organisations to delivery a wide programme of activities that promote and engage people in Health & Well Being. Many of these organisations rely on other sources of funding being available and this creates value for projects and for the local authority’s investment in them. Cultural organisations can fill the gaps in “professionalisation” of community involvement, but need frameworks and incentives to provide these services. There are a myriad of services currently available but structured progression routes are required to enhance the impact of this and ensure reach at a neighbourhood level. 5.3 This could be rolled out by Local Enterprise Partnerships, for example, with initiatives dependent upon community partnership and uptake in geographical areas who are currently not engaged. Greater participation working and coordination between funders and delivery organisations is required to create real impact. Greater joint working across Local Authority boundaries should be encouraged and incentives given to do this. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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5.4 Supporting the use of heritage assets by charitable developers (ie the third sector) is also a method of optimising resources, by providing a home for organisations, and keeping the historic fabric of the city in productive use, 5.5 The cultural sector still has potential to deliver stronger Quality of Life benefits at a neighbourhood level. Value and impact can be developed using coordinated approaches to match funding for neighbourhood & grass roots projects, to encourage cross authority (or joint agency working) and to maximise the use of available assets such as historic buildings.

6. Whether the policy guidelines for National Lottery funding need to be reviewed 6.1 The policy guidelines are specific in their support for “public good”, “the arts”, “the national heritage” etc. However this is a backfill approach that seeks to redress imbalances in provision and uptake. Clear messages are not given in the policy of the benefits of the cultural provision, and of the long term desirable outcomes. Agencies dilute and create mixed and complex messages that some communities find difficulty in interpreting (for example “artistic quality” is subjective based on life experience of the arts). A consequence of this is disenfranchisement and little impact on lifestyle choices. The gap between “pub and football” and “theatre and art gallery” needs to be populated with a bombardment of positivity around family and school education, youth work, health improvement and environmental changes that engender appreciation of better and healthier lifestyle choices through normalisation of cultural social activities. Lottery funding needs to benefit those who buy lottery tickets. 6.2 Liverpool has attempted to address this with a joint approach between the City Council and PCT in the 2010 Year of Health and Well Being. Initiatives such as this need time for the success to be assessed but initial findings are positive with cultural audiences and participants being given new perspectives through attractive and diverse activities. 6.3 There is a need to develop holistic cultural approaches that embed the value of culture to quality of life throughout people’s lives, so that cultural is not an alien object that needs explaining through expensive and fragmented “backfill” projects. (see footnote 69 and LARC response). 6.4 Policies need to strongly reflect that statutory and funded bodies understand and consistently espouse the value of culture to Quality of Life. 6.5 Funding policies should be reviewed (along with non cultural policies) in order to provide cultural progression routes through school, employment opportunities, social activity, and built environment. Lottery funding needs to benefit those who buy lottery tickets.

7. The impact of recent changes to DCMS arm’s-length bodies—in particular the abolition of the UK Film Council and the Museums, Libraries and Archives Council 7.1 Whilst LCC does not receive direct funding from MLA we recognise the improvements in standards that MLA have brought to Museums, and that a strategic regional context is vital, and that this should be resourced. 7.2 Liverpool City Council does house the Liverpool Film Unit and their work has ensured that film has become an important contributor to the city (and region’s) economy. If support funding is not made available to film & digital content makers, there will be an effect on the amount of productions being made in Liverpool, both indigenous and itinerant, who are reliant upon this. Several large-scale UKFC supported productions have come to Liverpool in recent years bringing substantial economic benefits. If the funding is not realigned to encourage UK film production there will be a detrimental effect. Tax initiatives in the UK have recently encouraged production studios to relocate to the UK (for example Marvel are filming Captain America in Liverpool). These incentives and appropriate infrastructure should be resourced to ensure that major productions continue to bring economic benefits. 7.3 The messages coming out from government about the Digital & Creative Sector are really encouraging: it is a growth industry, has export potential and a beacon of hope for the UK economy etc. Support through National Lottery funding and film tax credits is essential. Currently UKFC lottery funding (RIFE) is administered in this region via Vision!Media. In addition V!M are a key strategic partner in developing Liverpool’s particular strengths in the Digital & Creative Sector with a number of key actions within the Liverpool Cultural Strategy. This agency’s future is at risk as a result of the UKFC and RDA abolishment. Their absence would create a vacuum and alternative strategies will need to be put in place to ensure that our vibrant and dynamic film industry will be sustained and our filmmakers supported at every level. Key to this would be continued access to markets, skills and finance. 7.4 Provision needs to be made for support from experienced and qualified sources for both the Museum and Film sectors, to maintain and improve their spectacular successes.

69 In Harmony Changing communities through music Inspired by Venezuela’s El Sistema2, “In Harmony” is a community development project using music to bring positive change to the lives of very young children in the most deprived areas of England, delivering benefits across the wider community. The Royal Liverpool Philharmonic successfully bid to become one of three national pilots for In Harmony England between now and March 2011, funded by the Department for Education. http://www.liverpoolphil.com/193/in-harmony/changing-communities-through-music.html. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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8. Whether businesses and philanthropists can play a long-term role in funding arts at a national and local level 8.1 Business support through sponsorship, mentoring schemes, board and skills placements already contribute significantly to the cultural sector. They also receive the benefits of public awareness and support skills development through the above. Business should be encouraged to embed culture into the lives of their employees, to encourage well being, corporate social responsibility and as to consider thi s as recognition of their success. However it is difficult for small organisations to demonstrate value to sponsors, particularly for specialist projects that do not have wide public exposure. (For example a small group of artist working with a community group, is unlikely to attract significant private sector resource.) 8.2 The mechanisms for sponsorship proposals and involving business are well developed, but do require agency support (in Liverpool through Business in the Arts: North West and Arts & Business). This area of work is also extremely competitive and its development is resource heavy (upon organisations.) Support should be maintained and encouraged through funding of match schemes, and placing duties upon big organisations undertaking major programmes to consider investment in the cultural sector to encourage public benefit. 8.3 It is not realistic to consider private sector funding as a substitute for public sector subsidy. The “culture of cultural support” is not yet embedded, and requires more development, incentive and advocacy. It is unlikely to proportionally benefit the smaller end of the sector.

9. Whether there need to be more Government incentives to encourage private donations 9.1 The principles of philanthropic support are not widely formalised, and organisations such as Arts & Business are at the forefront of developing this kind of initiative. Whilst this offers potential for some, it is unlikely that philanthropy will be able to replace loss of public sector resource. American models are well established culturally and cannot be readily replicated, particularly outside London, where concentrations of wealthy individuals are fewer. 9.2 Government led incentives for private donations and philanthropy should focus on support for organisations wishing to undertake advocacy, and encouraging lower end uptake and mass participation (such as similar schemes to ACE’s Own Art). 9.3 The current economic climate will not encourage patronage without further incentives. The mechanisms for developing patronage are not as well developed as those for sponsorship. There is a challenge in meeting the desired results in certain areas of work, and in particular geographical locations.

Supplementary written evidence submitted by Alan Davey, Chief Executive, Arts Council England (arts 232) Select Committee Follow Up Thank you for your letter of 21 October following the evidence session I attended at the Committee on 12 October outlining a number of follow up questions that I said I would provide the answers to. These are outlined below, along with some additional information about the recent refurbishment at our Head Office at Great Peter Street which was also a topic of debate at the Committee. I have also asked the Arts Council Collection to provide you a separate note setting out its history, role and purpose, which I hope you will find helpful. I apologise for the short delay in responding to your letter, the response for which was due yesterday on 3 November. I hope that the information contained in this letter answers the questions you raise in your letter as well as provide some additional information for you on some of the other topics discussed at the Committee hearing.

How many diversity officers are employed by Arts Council, and at what cost? Arts Council employs three full time diversity officers at its Head Office in London at a total cost of £184,954 per annum. Their role is to ensure that the Arts Council fulfils its statutory obligations in terms of the previous equality legislation now replaced by the Equality Act 2010, but also to ensure that, in line with the recommendations in the McMaster review on excellence, we fund the arts in a way that properly reflects the talent available in this country.They work with artists from many backgrounds and have ensured that England is a leader in encouraging a broad approach to the arts in terms of gender, disability, race and ethnicity in particular, but also towards a broad approach in line with the Equality Act 2010, We believe that diversity is key to the vitality of the arts in this country. In addition to these posts, Arts Council also employs a further 13 Relationship Managers in its nine regional offices who have diversity as part of their remit. The primary role of these 13 staff is to manage relationships with our funded organisations as well as other key partners such as local authorities rather than as diversity officers. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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How much lottery funding is being used to top-up Arts Council’s pension fund? The Arts Council’s operating costs, including operating staff costs, are shared between activities funded from grant-in-aid and activities funded from the National Lottery. Arts Council is required to apportion these costs properly between the two areas on a full cost basis in accordance with good accounting practice. The costs for Arts Council’s pension scheme is therefore apportioned based on an estimate of staff time spent on each activity. The Arts Council Retirement Plan (1994) is a defined benefit scheme which is offered to Arts Council staff as part of their overall remuneration package. Other employers which contribute to the scheme are the Arts Council of Wales, The Scottish Arts Council (now part of Creative Scotland), the Crafts Council, and Creativity, Culture and Education. The actuarial valuation of the pension fund takes place at least every three years. The last valuation was on 31 March 2007. The costs of the scheme will be reviewed following the next valuation which is currently underway. As discussed at the Committee, a deficit was first identified in the financial year 1999–2000. This deficit has been reassessed and contributions adjusted accordingly during subsequent valuations. Decisions on the funding of the deficit in the plan are taken by trustees and employers and agreed with the pensions regulator. Since 1999–2000 the Arts Council’s employers’ contribution to the scheme has risen from 9.4% to 25.1%, or 23.1% for staff who joined after 1st July 2006 at the 31 March 2007 valuation. It is worth noting that at the last valuation employee contribution rates were increased from 1.5% to 3.5% to assist with the affordability of the scheme going forward. This current level of contribution is made up of two elements: an 11%–13% regular ongoing contribution towards future accrual; and a temporary deficit recovery contribution of 12.1% which runs until March 2016. The level of these contributions remains broadly in line with those organisations who buy into the Principal Civil Service Pension Scheme. £4.2 million of staff costs derived from Lottery activity has met the increased contributions since 1999. The comparative amount from grant-in aid is £6 million.

How many drinks receptions and dinners have Arts Council paid for since October 2008, and at what cost? In the past two years since October 2008 Arts Council Head Office and its additional nine regional offices have in total paid for 32 receptions and dinners with artists, arts organisations and other partners for business purposes, including a series of working dinners that formed part of a consultation on our 10 year strategy, Achieving Great Art for Everyone, published today. These cost a total of £34,774. This figure includes associated venue hire.

Will you publish the reports produced by Moss Cooper on the lessons learned from the West Bromwich arts centre project? There is a considerable amount of material on the issue of The Public held in our archive, and it is possible that these records contain a report or reports produced by Moss Cooper about the West Bromwich art centre, as referred to by Tom Watson in his original parliamentary questions on the subject. Records on this issue date back beyond five years and we believe that retrieving them in order to identify whether they contain any reports by Moss Cooper would be at disproportionate cost. I do absolutely agree however that we must look at the lessons learned from the experience at The Public, and we are looking at options to review the known literature, which is itself extensive, on this issue for that very purpose, publishing the results so that lessons are learned. I should emphasise that it would be wrong to characterise The Public as solely an Arts Council project. We were one of a number of partners and were not at any point in a position of having sole control in how the project was managed. The project at The Public presented a number of risks which, when multiplied, made it a considerably risky investment for us. It was a bespoke building, an organisation with a lack of capacity, an untested business model, and a project that, for the multiple funders, needed to meet a number of different outcomes at the same time. These included arts, regeneration, social inclusion and employment. The lessons learned in terms of our involvement in the project include clarity of who is in charge of the project, and ensuring relevant capabilities exist in the organisations running it. Also, how firm we should be as an organisation when our conditions are not met. I conclude that we were anxious to do something in Sandwell based on community arts as a result of local initiative. We did so with matched funding from Sandwell Council, the RDA and later some ERDF money. The project grew in scope, and seemed to lose its purpose. In hindsight I would suggest that: — We should have acknowledged that there was a serious question about the capacity of the team delivering it to do so, and taken action at an earlier stage when these concerns first arose. — We should have insisted on clarity before we went ahead when it became clear that the scope for the project had become confused. — We should not have allowed our decision making to be partially driven by the need to secure funding from other funders, on the basis that we had already invested valuable time and funding into the project. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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The key is to ensure we are able as an organisation to take firm action more quickly, even when we are anxious to do the best for the people involved. Since Arts Council’s involvement with The Public, it has introduced a key stage review process based on the OGC Gateway model. This process provides clarity about how projects are monitored and how decisions are taken with other funders. The process provides a clear and robust framework for investment decisions, which I believe provides a reliable context for decision making on capital and other investment decisions now and into the future. What is now in place at The Public is a facility in Sandwell based on a visitor attraction and space for creative businesses that is now well managed and is finding its purpose, attracting over 100,000 visitors since it opened.

Can you calculate the full cost of mothballing the West Bromwich arts centre project through the receivership process, and what is your reaction to reports that it cost £10 million? The Arts Council do not hold this information and the question would need to be redirected to the administrator. As I have already said, the Arts Council was not in the lead on running the project.

Why did neither the Chief Executive of the Arts Council West Midlands nor any other senior officer attend any board meeting during the build process? At the time of the funding decision on The Public the West Midlands Regional Arts Board was a separate organisation to Arts Council England. Arts Council England and the Regional Arts Boards only combined to become one organisation in 2003. Because of this the West Midlands Arts Board were not directly involved in decision making and may not, therefore, have sent representation to board meetings. The staff members involved in the project at this time have now left the Arts Council and we no longer have access to information regarding their diaries to be able to confirm whether they did or did not attend any of the board meetings. Since the funding decisions about The Public took place we have revised our internal guidance with regard to attendance of our Relationship Managers at the board meetings of the organisations we fund. This includes a responsibility for Relationship Managers to attend board meetings or equivalent as an observer on a regular or occasional basis.

Office refurbishment at Great Peter Street A further point that was raised at the hearing I attended was about the cost of the recent refurbishment at Great Peter Street and I thought it might be useful to set out some of the background to this to add to the information you heard at the Committee hearing. Arts Council England has held the lease on Great Peter Street since 1990. Soon after this date, the creation of the National Lottery and the identification of the Arts Council as a distributor of the Good Causes Fund led to an increase in staff to help deliver the very significant investment. The lease on Great Peter Street was taken for 25 years with no breaks and as a result of the increase in staff numbers it became necessary for the organisation to take additional space in two offices in Victoria and spread the organisation across three offices. Early in 2003, following the merger with the Regional Arts Boards to create a national funding organisation for the arts in England, Arts Council England, in advance of the Lyons Review and other initiatives focusing on Central London properties, embarked on a rationalisation strategy. Initially we looked to relocate all staff to a new location and targeted more cost effective areas like Kings Cross, Southbank, and the “midtown” area. We developed a proposal for a serviced office provider to take over Great Peter Street and provide a flexible office base in Westminster as this need was identified by the civil estate team at the OGC. The business case identified recurrent annual savings in the order of £1.6 million as well as significant organisational benefits by bringing all of our London based staff together in a single location. Our business case to relocate was the first to go before the Treasury in 2004 following the Lyons review which lead to a shift in policy towards central London properties, and our case was not approved. Following this decision, we decided to consolidate all staff into Great Peter Street. Having occupied the building for 15 years, we adopted an invest-to-save principle to refresh the building, taking care to repair where necessary and maximise the use of space. During this refurbishment process, we engaged the artist Lothar Goetz, as we believe it is important to reflect the sector we support in our working environments. As we needed to redecorate internally, using an artist to articulate how we went about this was a very cost effective way to achieve an artist commission in our Head Office. £13,750 was paid to Mr Goetz for this work in 2007. Since we embarked upon this rationalisation strategy, we have successfully reduced all our Central London properties to a single lease at Great Peter Street. The final portion of this strategy was achieved in the summer of 2010 as we brought across the London regional team from their previous offices in Clerkenwell into Great Peter Street in time to meet a lease break at the separate London regional office. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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Taken as a whole this rationalisation strategy has realised annual savings of £1.5 million in rent, rates and service charge alone as well as £850,000 from the sale of a freehold storage facility. In the 2009–10 property benchmarking performance report, Great Peter Street was reported as performing above the private sector benchmark average across all three measures of efficiency, effectiveness and environment. The report is produced as part of an annual civil government property data return exercise and the defines buildings in this bracket as “exceeding benchmark performance by at least 10% and delivering a positive contribution”. We remain in dialogue with the Government estate rationalisation team about opportunities to further improve in relation to the costs of Great Peter Street.

Arts Council Collection Finally, I am also keen that we provide you with some additional information about the Arts Council Collection which I hope will provide some additional detail to contribute to your enquiry and which I did not have to hand at the hearing itself. The Arts Council Collection is compiling a note to you on this which they will be submitting to you under separate cover. In addition, my Chair will be writing to set out our new funding arrangements in some detail once they are announced. November 2010

Written evidence submitted by David Lee, The Jackdaw (arts 233) Appended is my answer to the request by a member of the Culture Select Committee to justify my criticism of purchasing policies in publicly owned collections. We were discussing, I recall, the Arts Council Collection, a repository of some 7,546 works (plus 67 more bought in the last 12 months), which has no permanent home, the overwhelming majority of the work (80% according to an ACE employee, 70% according to the Chief Executive of ACE) being at any one time in store. I stated my belief that in times of financial hardship it is imprudent that new acquisitions should be made of work by artists who are either already extensively represented in its own or in other Government collections: for your information, apart from the Arts Council’s these state-owned holdings are most conspicuously the Government Art Collection (13,500 works, plus 75 new works added this year); the British Council Collection (8,500 works, plus 100 new works bought recently); and the Tate (78,000 works, more of whose recent acquisitions below). In the last year the Arts Council has acquired a work by Jeremy Deller (who is currently a serving trustee of the Tate; a gallery which awarded him the Turner Prize in 2004). It is the third work in the collection by the artist. The Tate also already owns five major works by Deller, four of which are not on display. These include his most famous work, a film and installation of the reenactment of a confrontation between police and demonstrators at Orgreave during the 1984 Miner’s Strike—a work funded by the Arts Council Lottery. The Government Art Collection has also this year bought a work from Deller; indeed it is the same work as one of the undisplayed pieces in the Tate’s collection, and also repeats the same Deller work in the Arts Council Collection. The British Council owns three works by Deller, one of them being the same work— History of the World—bought this year by the Government Art Collection and which is also in the permanent collections of the Tate and the Arts Council. Is the public trying to corner the market in this work, for it owns four copies of it? History of the World is, incidentally, a moderately amusing flow diagram relating Acid House music to Brass Bands: I suppose it would be considered impertinent nitpicking to comment that it contains not the merest thread of art. There are also ten works by Deller in the Victoria and Albert Museum. Deller has been in the forefront of the campaign by Turner Prize artists to ensure that funding for the visual arts is maintained and, if possible, increased. His support is not surprising really is it. Such duplications are obviously wasteful and indicate more generally that collections might rationalise their purchasing nationally, or at least regionally. How many national collections, each harbouring enormous quantities of unseen work do we need buying works—even the same ones—by the same few fashionable artists? You must bear in mind that the Arts Council and British Council collections were both inaugurated to make purchases from artists at the beginning of their careers in order to give them confidence and support and encourage them through the rough period immediately following art college. This seems an estimable use of scarce resources because established artists don’t need help from the state. That laudable policy has been overturned by both the Arts Council and British Council to the extent that they are now acquiring works from a roll-call of the most recognisable and successful brands in British art… Effectively, they are both duplicating the collecting responsibility of the Tate. Also this year, the Arts Council Collection bought nine works by Wolfgang Tillmans, a German photographer and also, like Deller, a Turner Prize winner and a serving trustee of the Tate Gallery. (Incidentally, why any of our British photographers don’t qualify as a trustee of our principle gallery is bewildering. Mr Chairman, your committee may at some stage decide to look into the fishy resistance of the Tate to having appointed to its Board of Trustees any but Turner Prize winners and nominees.) These Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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nine works were acquired despite the Tate already owning 63 works by Tillmans, none of which is currently on display. The British Council also owns 11 works by Tillmans. Forgive my impertinence, but what is the work of a German photographer doing in the collection of a body whose founding function is to advance the standing of British Culture abroad? Another bulk acquisition this year to the Arts Council Collection was five works by Keith Coventry. The collection already has in its vaults 23 works by this artist. The Tate also owns four works, one of which is currently on display, and the Government Art Collection and the British Council own another one apiece. I notice in passing that the Arts Council Collection also acquired this year three works by Bridget Riley to add to the 11 existing in the collection. Riley also has 30 works in the Tate (four currently on display), nine in the Government Art Collection and 30 pieces in the British Council Collection. The most expensive purchase this year by the Government Art Collection was the £57,500 paid for Cornelia Parker’s 14 crushed silver-plated objects: her ninth work in the collection. There are already 21 works by Parker in the Tate’s collection (two currently on display), one of which is from the same series as that bought by the Government Art Collection, though it is not on display. Another Parker work, also from the same series, is owned by the British Council among six works in that collection by the same artist. The Arts Council Collection owns a further nine works by Parker, one of which duplicates a work in the Victoria and Albert Museum’s print collection. I could continue like this indefinitely. Considerable savings could be made by stopping all but essential purchases and especially those which duplicate acquisitions in other national collections. Indeed, I can see no reason why the any of these four organisations (the Tate, ACE, GAC and the British Council) should make any purchases at all in the next few years because they already own far in excess of what they can ever exhibit. The works in the Arts Council and British Council collections which are never shown and never requested for loan should be given to regional museums, or otherwise sold. Additionally, there is no good reason why the Government Art Collection should not be disposed of in its entirety. The public would lose nothing by these disposals and receive positive benefits in terms of savings and capital gains. If ministers wish to borrow works for their offices why can’t they do it from the Tate which has an unseen cache of work five times the size of the Government Art Collection’s. Further on the subject of State acquisitions… The next time you hear Sir Nicholas Serota moaning about not having sufficient money to extend the collections of his exponentially expanding empire, please bear this in mind: in the last four years for which there are published records, 2006–09, the Tate has acquired 2,209 new works. This equates to one new item every 16 hours for four years. Indeed, in the last five years the Tate Gallery has absorbed more new works than the National Gallery has accumulated in its entire 186-year history—the National Gallery, incidentally, has all its works on display. If a moratorium were placed on new purchases for, say, the next five years in all national collections, visitors to the galleries would notice no difference to their experience. I wish to reiterate the following points I made to the committee: 1. The overwhelming majority of British artists would not notice the complete withdrawal of all Arts Council funds allocated to the visual arts because they are considered by the Arts Council to be “the wrong kinds of artists” and don’t benefit from the Arts Council’s existence in any way. 2. The visual arts are unlike any other discipline dealt with by the Arts Council. In drama and music, the concert halls and theatres and the canons performed in them already existed. In the visual arts the Council opened its own galleries, some of them like the Whitechapel limping relics from a former age. These have been most often directed by the AC’s own former employees who are reliably steeped in the ethos of the Arts Council. The Council then institutionalised a new species of what it calls “Challenging Contemporary Art” to exhibit in them. Everyone else who falls outside this conveniently ill-defined phrase is excluded. The Arts Council has thus established an unhealthy monopoly, indeed a tyranny, which excludes more artists and styles than it includes. This derives solely from the personal prejudices of Arts Council employees instead of upon an intellectual openness to excellence wherever it exists on what is a very diverse stylistic spectrum in current art. 3. If you were today devising from scratch a way of funding the visual arts, you would look at the way the Arts Council does it as an object lesson in how to fail the overwhelming majority of your constituency. 4. The need to rationalise in some way national and regional art collections first occurred to me in November 2006 when Bury Council sold a painting by L S Lowry from Bury Art Gallery in order to plug a gap in its annual accounts of £500,000. The painting sold for £1.4 million and the surplus was apparently used to pay for a library in Ramsbottom. Deaccessioning, as this process of selling works from public collections is clumsily called, is a thorny subject which always causes outbursts of possessiveness among museum people. The truth is that when Bury sold its Lowry and left its walls devoid of a work by this highly popular local artist, there were in public collections within a few miles of Bury 305 works by Lowry which were not on show; these included 13 in Whitworth Art Gallery, 19 in Manchester City Art Gallery and 270 in Salford’s Lowry Centre. Galleries in Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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Preston, Stockport, Bolton, Burnley and Oldham also had works by Lowry in their collections which were not at the time of the Bury sale on display. It is not that there is a shortage of works in public collections by artists like Lowry but that they are unseen in places that don’t apparently currently need them. If ever there was an argument for a centralised, collectivised management of art collections it was highlighted by the sale of the Lowry from Bury. 5. Possible immediate savings by the Arts Council: withdraw funding from the ICA, which is now functionless and incompetently managed. Remove funding from the Serpentine Gallery. The few London dealers who benefit by having their artists exhibited in the Serpentine should be encouraged to assume running control. The gallery recently staged two exhibitions in one year dedicated to Jeff Koons and Richard Prince. Both these artists are represented by dealer Larry Gagosian who has his own spacious galleries in London which are more extensive than those of the Serpentine. Why is the Arts Council funding a gallery to show works by the world’s wealthiest artists represented by the world’s wealthiest dealer when those artists could just as easily be exhibited in their own dealers’ rooms? In the last year the Serpentine has shown the elderly artist Richard Hamilton, who also has a London dealer and has already been accorded no fewer than three retrospectives at the Tate. Also it has shown the ubiquitous Wolfgang Tillmans, who naturally has his own London dealer and has also recently enjoyed a huge retrospective at the Tate, where he is now safely installed as a Trustee. A quarter of all the money spent by the Arts Council’s visual arts department (£3 million of £12 million) would be saved by allowing both these organisations to sink or swim. The overwhelming majority of the public would notice no difference. And I don’t even mention the Hayward Gallery, which is a laughing stock . . . November 2010

Supplementary written evidence from Edward Harley, President, Historic Houses Association (Arts 234) Further to my appearance before the committee last Tuesday and in response in particular to questions from Tom Watson MP,I enclose some further information on (a) the HHA’s concerns on the implementation of regulation to heritage tourism businesses, and (b) the type of projects that we believe might be deemed eligible in future for consideration for HLF funding. I would be grateful if this information could be made available to all Members of the committee. I also enclose copies of a short HHA document, “Inspirational Places—the Value of Britain’s Historic Houses”,70 which puts flesh on some points I made about the cultural, economic, educational and social contribution of privately owned heritage, the challenges that this sector faces and the policy solutions that we have proposed to government. We would, of course, be pleased to respond to any further requests for information that the committee may have.

(a) Reducing over-regulation of heritage tourism businesses: Note based on a joint representation to government by the National Trust and Historic Houses Association dated July 2010 Licensing Both our organisations support the conclusions of the Elton Review of 2006, which have yet to be fully implemented. The review called for changes to the fees structure to ensure that for larger events the fee reflects only the reasonable costs of local authorities in providing licences. This is particularly important for historic rural venues that may host only one or two major events annually, but have to compete with urban venues holding events throughout the year; both venues are charged the same fee. Elton also proposed a de minimis approach where the licensable activity was small in relation to the overall activity taking place. A good example is a small beer tent in a large event, such as a horse trial or country fair.

Tourism Signage We see both an acute problem and, as serious, an underlying absence of a national policy to use brown tourism signs actively to promote tourism, in England especially. The acute issue is that the Highways Agency and local authorities interpret the management of brown tourism signs inconsistently and opaquely. As a result, we know of instances of historic houses not being allowed tourism signs or even losing their signs (even when they have paid for them themselves), whilst we see a growing number of brown signs for fast food outlets and garden centres. In one vivid example, an HHA historic house in Yorkshire was complimented by a Her Majesty’s Revenue and Customs representative inspecting the presentation to the public of works of art which were conditionally exempt from Inheritance Tax. The only criticism made was the house was hard to find. This house has been campaigning for, and has been repeatedly refused, a brown tourism sign!

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Being denied a sign can seriously affect the ability of owners and managers to build up their tourism businesses. There is no appeal and signs may be removed without consultation, even though the attractions themselves bear the cost of signage. Local authorities’ resistance, in some cases, to temporary events signage has been perverse and damaging. Such problems will recur until there is a coherent policy towards the use of brown signs for active promotion of tourism, as happens much more widely in some other countries. The HHA and NT would readily support DCMS Ministers in discussions with the Secretary of State for Transport, the Highways Agency and local authorities to bring about such a policy. Tourism is a huge economic and regenerative driver for a region’s economy and positive signage is an important way of developing the tourism market.

Planning Issues The new Planning Policy Statement, PPS 5, is intended to bring the historic environment into the mainstream planning system. We welcome it and the aspiration to reduce complexity and delay. We also welcome the recent review of non-planning consents submitted by Adrian Penfold, and its call for the unification of the various heritage consent regimes. However, we still see unnecessary regulatory control, in particular in the way that planning applications for temporary structures, such as marquees, are handled. These structures house special events which can enrich the experience of visitors to historic places, without compromising the historic value of the site. They are temporary and reversible. However, some local authorities treat them as if they were permanent developments and do not appreciate their importance in heritage tourism. We would hope very much that the DCMS would be prepared to act as a champion for a more positive and flexible approach in its discussions at Ministerial level with CLG.

Application of Fire Safety rules to listed bed and breakfast accommodation Fire safety is, of course, paramount. However, we see examples of application of fire safety regulations to listed buildings which owe less to a concern for safety concerns than to uniformity, which is often inconsistent with the particularities of historic buildings. Requirements for small operations in listed buildings should not necessarily be the same as for large-scale new buildings. Of particular concern is the inconsistent application of regulations from one fire authority to another, which can disproportionately affect viability in certain areas.

Health and Safety The application of Section 3 of the Health and Safety at Work Act in circumstances involving natural hazards needs urgent re-consideration. It is at odds with the relaxation of occupier’s liabilities on land in other legislation, and undermines our role in opening up the countryside for public access. We also believe that a more flexible definition is needed for the term “so far as is reasonably practicable”, as deployed in Health and Safety legislation. The existing definition relies heavily on case law, and its strict application in situations around public safety in the natural or historic environment is constraining. Another burden is the considerable effort that has to be invested in ensuring that records are kept after an incident in order to provide our insurers with the basis for a defendable position. Indeed, we find that some unjustified claims proceed and are successful because it is simply uneconomic for insurers to defend some low value claims.

(b) Heritage Lottery Fund: funding projects in the privately owned heritage sector: types of project that might be considered as eligible for funding in future 1. The Historic Houses Association (HHA) enjoys a very positive and constructive relationship with the Heritage Lottery Fund (HLF) and values the funding that has been made available, over the course of the HLF’s life, to projects in privately owned historic houses that have provided enhanced educational experiences and improved outreach to new audiences. 2. It should be noted that these projects are very few in number and the necessary procedures for application can be relatively expensive and demanding for a smaller historic house. The number of projects at individual historic houses has been extremely small and partnership projects, although still very limited, have been more successful although these can be challenging to set up. Projects have focused on learning, participation and outreach, thereby deepening and widening access to and enjoyment of heritage. 3. Policy Directions given to the HLF by the Secretary of State require funding to be limited to: “projects which promote public value and which are not intended primarily for private gain”. 4. Recently, the HHA and HLF have begun to discuss whether and to what extent these Policy Directions allow for a wider interpretation than has previously been the case. The two organisations are conducting these discussions against the background of: — the HLF’s preparation of a new Strategy for its operations, to come into effect formally from 2013; — increasing pressures on maintenance of historic houses and gardens, open to the public, in the private sector; Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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— the scale of the public benefits that these places provide; — the effective disappearance of grant support for such buildings from English Heritage, its equivalents in the other countries of the UK and local authorities; and — the prospect of a significant increase in HLF funding from 2012. 5. In entering these discussions both organisations have the clear aim to focus on potential projects that would deliver significant public benefit. Both recognise that any private gain resulting from HLF funding should be incidental and minimal, or even non-existent. 6. The HHA is drawing up a list of the types of projects that it believes might be considered eligible in future. These include: — Restoration of historic buildings in the private sector which form part of a larger conservation project in partnership with local organisations in a similar way to the way in which the HLF’s Townscape Heritage Initiative and Landscape Partnerships work. — Restoration of historic buildings or objects within historic buildings that form a part of a project aimed primarily at increasing participation of new audiences in heritage and/or learning through experience of heritage. Possible examples: conversion of a building into a Visitor Centre, with learning facilities, at a historic house; restoration of a building housing a gallery or other room reserved solely or predominantly for public use (day visiting and/or events); or a room designated for school visits. — Physical improvements to historic buildings to enhance the visitor experience and help maximise the tourism potential of historic sites, eg facilities for visitors with disabilities, material improvements; and interpretation, in a similar way to which the NWDA’s innovative Heritage Tourism Improvement Scheme has operated. — Another possible area for consideration is that of an HLF contribution to enable an acceptance in lieu of Inheritance Tax of a historic object, associated with a historic house, open to the public, to be kept in the house in its traditional location, on the public route (Acceptance in Lieu in situ). The contribution would be ring-fenced for use only on the maintenance of the object in question. 7. In addition, in the case of projects solely for education or outreach purposes, which are now already eligible, the HHA and HLF are discussing ways in which applications for funding, including development of potential projects, could be made more practicable. For example, where a project relies on a number of historic houses and/or gardens collaborating, which has proved expensive and difficult for individual houses in the past, the possibility of the HHA itself being able to make the application is being considered. 8. It should be stressed that the discussions are at an early stage and the examples above do not definitively point to the final outcome of the discussions. 9. It would be very helpful if the committee felt able to support wider interpretation by the HLF of its policy directions so as to enable the types of projects illustrated in paragraph 6 above to be eligible for grant. November 2010

Supplementary written evidence submitted by the Arts Council England (art 235) 1. What is the Arts Council Collection (ACC)? 1.1 The Arts Council Collection (ACC) is the foremost loan collection of post-war and contemporary British art. With more than 7,500 artworks, it is also the most widely circulated loan collection anywhere in the country. At any one time between 25 and 30% of its works are on show somewhere in the country (this figure is high in comparison to most public collections, which typically have around 10% of their work on show at any one time). The ACC was given National Status under the terms of the National Heritage Act of 1980. The ACC is increasingly accessible online. 1.2 Established in 1946 to promote and enrich knowledge of contemporary art, the Collection continues to support artists living and working in Britain through the acquisition of their works, many at an early stage of their career, and to foster the widest possible access to modern and contemporary art across the UK. 1.3 The ACC places modern and contemporary art in a wide variety of public buildings across the UK, from museums and galleries to schools, universities and hospitals, either in the form of one-off exhibitions, or short- or long-term loans. Its travelling exhibitions tour extensively to venues and communities that otherwise have limited access to modern and contemporary art. 1.4 By exhibiting in diverse communities around the country the Collection reaches a broad demographic, not only through exhibitions, displays and loans, but also by fostering projects with young people, undergraduate and postgraduate students. 1.5 The ACC commands sustained respect among arts professionals for its excellent track record in the early purchase of artwork (ie before artists become national and international figures). As an illustration of the reputation and recognition of the important role it plays in developing audiences across the country for Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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emerging artists, in the financial year 2009–10 the ACC accepted gifts to a total value of £303,000. Important works in the collection include Head VI by Francis Bacon, Field for the British Isles by Antony Gormley, He Tried to Internalize Everything by Damien Hirst and The Simple Truth by Tracey Emin. 1.6 The ACC has a robust acquisitions process and makes strenuous and continuous efforts to avoid duplication with other UK public collections, including the Government Art Collection, British Council collection and the Tate collection. The robustness of the methodology is to the standards demanded by third parties such as the Art Fund, who insist on a review of holdings in public collections as a central part of their application process. A review of the holdings of UK public collections is also a standard part of the research process involved in considering any new acquisition to the Collection. 1.7 Aside from these primary functions, the ACC is a first resource for loans to exhibitions organised by other museums and galleries, alongside other publicly funded national collections of contemporary art. 1.8 The ACC is not only a resource for borrowing works of art, but also a repository of information about collections management, collecting and curating at the disposal of institutions across the country. It runs a successful annual programme of free professional development events (Curators Days) for curators from public museums and galleries across the UK which acts as a forum for professional networking and the discussion of current issues. 1.9 In 2009–10 works from the ACC were exhibited in towns and cities throughout the UK, including Leeds, Durham, Plymouth, Bexhill-on-Sea, Carmarthen, Glasgow, Hull, Leamington Spa, Warwick, Lincoln, Southampton, Newcastle, Manchester, Stirling, Ayr, Cardiff, Liverpool, Stoke-on-Trent, Anglesey, Derby, Tunbridge Wells, St Ives, Sheffield, Swansea, Aberystwyth, Norwich, Wolverhampton, Paddock Wood, Walsall, Coventry, Bradford, Cheltenham, York, Nottingham, Scarborough, Stockton on Tees, Lochmaddy, London, Bath, Birmingham, Rugby and Carlisle. A full list of exhibitions and loans from this period is available on request.

2. Collection storage facilities 2.1 The ACC is managed by the Southbank Centre, London, on behalf of Arts Council England and is based in the Hayward Gallery at Southbank Centre and at Longside, Yorkshire Sculpture Park. The base at Longside enables the ACC team to extend its sculpture conservation and research programmes and to increase public access to the sculpture collection. A diverse range of exhibitions from the Collection, including displays of some of the most recent acquisitions, can be seen in the adjacent Longside Gallery. 2.2 The ACC is able to offer any of its art at short notice to public buildings in the country, precisely because no part of the collection is on permanent exhibition in any one art gallery. The ACC places great emphasis on providing efficient and swift access to works, as well as providing good maintenance and management. This is dependent on high quality,well run storage. Our storage facilities at Oval and Longside are active, well-used buildings, with a high traffic of works in and out on a weekly basis, as well as a steady stream of visitors. They not only provide the correct environments for the storage of important works, but also act as venues for a number of events for colleagues from regional museums and galleries every year. 2.3 The storage facility at Oval enables efficient access to the Hayward Gallery transport for touring exhibitions and loans, as well as being an important location for the viewing of works by potential clients, curators, students and artists. The London store also provides space for cost-effective in-house work such as framing and mounting of flat works, Collection photography, and routine conservation support. This saves significant costs in transport to other professional facilities, as well as obviating the need to hire additional space.

3. What are the administrative overheads of running the Arts Council Collection? 3.1 The ACC gets its administrative support from the Southbank Centre, including HR, marketing and communications, legal, and specialist technical departments. The Collection has only 6.6FTE dedicated staff, based in London and the Yorkshire Sculpture Park in Wakefield. All staff are employees of the Southbank Centre. — The cost of storage (paid centrally by ACE) in 2008–09 was £328,087. — Operational costs in 2008–09 were £404,000. 3.2 Operational costs include all the expenditure on transport; photography; conservation; framing and material; casemaking and packing; Curators Days; the Select exhibition scheme; research; the exhibition programme at the Longside Gallery and project space; website development; and various other functions. 3.3 The cost of acquiring artwork is met through a central grant from Arts Council England, which in 2008–09 was £180,000.

4. What are the barriers to borrowing from the Arts Council Collection? 4.1 Because the whole collection is available for loan, with no permanent exhibits, there are no significant barriers to borrowing from the Arts Council Collection. Over 90% of loan requests are approved and delivered. Exhibition loan requests are considered monthly, and can be processed, approved and delivered in a short period, typically with a turnaround of three to six months. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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4.2 In the few cases where loans are declined, this is usually because: — The requested work is already committed to another exhibition at the time. — The venue cannot offer the appropriate conditions in terms of security, climate control, or invigilation. — The work is large and physically cannot be fitted through available doors/windows of the venue. — Very rarely a loan might be declined on the grounds the work is so fragile and vulnerable that we have to limit the number of occasions it is exhibited in order to prolong its life. — The loan request is received at such short notice that it cannot be agreed without jeopardizing the delivery of existing commitments. 4.3 Loans are not limited to museums and galleries; the Arts Council Collection also lends to charities, hospitals, colleges, professional associations, housing associations and churches.

5. Expanding the Use of the Arts Council Collection 5.1 In the past four years there have been new and imaginative efforts to expand the use of and access to the ACC. Projects have been run with school children acting as curators (Ryedale Folk Museum, Leeds Met Gallery, Oriel Davies Gallery and Ferens Art Gallery); stronger links with academic institutions have been fostered via collaborative exhibitions working with students of the Courtauld Gallery, and Goldsmiths College and a new curatorial competition for post-graduate students to create an exhibition from the Collection. 5.2 The ACC is working with the Hayward Gallery and Southbank Centre on their Haywired scheme, which will see it collaborating with five secondary schools across London during 2011, working with pupils and staff on placing works in the school buildings, and helping the children write their own interpretation material. 5.3 In 2009, via collaboration with the Public Catalogue Foundation (PCF), all the paintings in the Collection were photographed to the highest professional standard. More than half the cost of this photography was borne by the PCF. All the digital images are being uploaded to the ACC website (http:// www.artscouncilcollection.org.uk/gosee.do) as copyright is cleared; digital access to this section of the Collection will be further broadened in 2011 when the PCF website, Your Paintings, hosted by the BBC, is launched. The ACC will be one of the first art collections to go online with the BBC. 5.4 In the coming year 2010–11 digital photography and rights clearance will be completed for all remaining works in watercolour, photography, collage, print and drawing, so that these too will be fully illustrated on the Collection’s website, dramatically increasing access to information about the Collection’s holdings, both in this country and abroad. 5.5 In 2011 the Arts Council Collection will launch a new collaboration with The National Trust, working with the Trust’s Trust New Art scheme to place Collection works in National Trust properties around the UK. The Collection piloted the project in 2009, with a project at Nunnington Hall, in North Yorkshire. 5.6 Since 2004 the Arts Council Collection has run series of free professional development events (Curators Days) for curators around the country. These were oversubscribed and increased from three to six events annually. These events enable the Collection to update colleagues across the country on new projects, acquisitions and forthcoming touring exhibitions, and are important in generating new partnerships and projects for borrowing from the Collection. 5.7 In 2010, staff members from the following 43 institutions have attended Arts Council Collection Curators Days: The Lowry, Salford; Djanogly Art Gallery, University of Nottingham; Ferens Art Gallery, Hull; Canterbury Museum and Art Gallery; Bury Art Gallery; Oriel Myrddin, Carmarthen; University of Hertfordshire Galleries; Museum of London; Manchester Metropolitan university; University Hospitals Birmingham; Yorkshire Sculpture Park; MIMA, Middlesborough; Hatton Gallery, Newcastle; Kettle’s Yard, Cambridge ; British Council; Artsdepot, London; QUAD, Derby; Southend Museum; Huddersfield Art Gallery; The New Art Gallery Walsall; Towner, Eastbourne; Turner Contemporary, Margate; Ikon, Birmingham; De La Warr Pavilion, Bexhill; freelance, Norfolk/London; Wolverhampton Art Gallery; Plymouth Art Gallery; Baltic, Newcastle; Whitworth, Manchester; John Hansard Gallery, Southampton; Southampton City Art Gallery; Guildford Museum and Art Gallery; Holbourne Museum, Bath; Victoria Art Gallery, Bath; Thelma Hulbert Gallery, Honiton; National Museum Wales, Cardiff; John Creasey Museum, Salisbury; Bedlam Gallery, Brunel University; Anglia Ruskin University Arts; Scarborough Art Gallery; Camden Arts Centre, London; Rugby Art Gallery. 5.8 Details of exhibition loans in the UK and overseas—as well as long loans to UK bodies in the past two years—are available on request. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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6. Third Party Endorsements of Arts Council Collection Dr Adrian Locke, Exhibitions Curator, Royal Academy of Arts, London “I can only thank you for your extremely positive response to our very late petition to borrow the work. Your collegial attitude was hugely encouraging and I am conscious of having asked you and your colleagues to turn a request around at record speed.” Dr Andrew Renton, Goldsmiths College, London “It feels as if ACC has come alive with possibilities of late, and that we were celebrating those possibilities… It was a privilege to be part of it.” Hugh Player, Chief Executive, St Martin-in-the-Fields, London “We look forward to having [this] work on view at St Martin’s, to it enlightening the world for our visitors and ourselves.” Andy Horn, Exhibitions Manager, Birmingham Museum and Art Gallery “The exhibition Bridget Riley: Flashback at Birmingham Museum and Art Gallery proved the value of partnerships with the Arts Council Collection. The exhibition drew in a huge and appreciative audience, doubling the Museum’s predicted visitor numbers. Visitors in particular commented on the quality of the work and its presentation. The exhibition proved the regional public’s appetite for contemporary art and single artist exhibitions of recognised artists of the caliber of Bridget Riley.” Angela Blackwell, Curator, Thelma Hulbert Gallery, Honiton “Brilliant exhibition, great choice of works, labels and information. This really raised the profile of the gallery, attracted more visitors (many new) and everyone really enjoyed it.” Robert Hall, Keeper, Huddersfield Art Gallery “[The Arts Council Collection exhibition in Huddersfield was] very popular with the public. Also popular with students, plenty of return visitors.” Antony Gormley, artist “The Arts Council Collection is the primary national collection conserved and exhibited for all of us. It is unique in having no fixed abode and being available to museums nationwide. Many of the works were bought early in artists creative lives and for many of them (like me) it was the first sale to a public institution so the works are often seminal to a lifetime’s evolution. It is a central resource for anyone interested in the development of British Art and should be protected and celebrated as the most democratic collection we have. Field for the British Isles has been in the Collection for years and has been seen in varied venues from a department store to cathedrals all over the country as a result. The Arts Council Collection is an unparalleled national resource and should, at a time of hardship, be treasured as physical proof of our nation’s creativity.” Mark Wallinger, artist “The Arts Council Collection has made a unique and valuable contribution to the lives and careers of artists working in this country. By consistently identifying key early works by the best emerging talents it spends presciently and wisely and gives the encouragement and kudos so crucial to those struggling to make a start in a precarious profession. And that is merely the beginning. The Collection acquired my work, Angel, in 1997, since when it has been exhibited in no less than 18 different galleries the length and breadth of this country. I can’t tell you the amount of people I bump into who cite seeing this work in places I never knew it had been, for which I am very grateful.” eyton-Jones, Director, Serpentine Gallery “The Arts Council Collection is an invaluable resource for organisations like the Serpentine Gallery. Seminal works by artists Rebecca Warren, Richard Hamilton and Gustav Metzger, that may have otherwise been unattainable, have been lent to the Serpentine Gallery by the Collection in the last 18 months alone for the enjoyment of thousands of people. It has provided a vital contribution to culture for many years, and is now online for the benefit of a wider audience.” Alex Farquharson, Director, Nottingham Contemporary “Whichever way you look at it, the contemporary art market being what it is, £180,000 is an extremely modest acquisition budget for an important, public and nationally distributed collection of contemporary art. Over the years, the curators of the Arts Council Collection have produced a disproportionately high artistic and educational return on this investment through a selection process that is intelligent, responsible and imaginative. The Hockney and Bacon examples . . . illustrate this. In my experience of running public galleries in Nottingham, Cardiff and Exeter, those overseeing it have been generous in responding to requests for loans of art works from the Collection.” Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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Simon Wallis, Director, the Hepworth Wakefield “The Hepworth Wakefield has been working closely and productively with the Arts Council Collection in developing the gallery’s collection displays and exhibition programme, which opens to the public in May 2011. We see the Arts Council Collection as a vital national resource that we will be drawing from extensively and regularly to benefit the people of the region and our many visitors. Caroline Douglas is a great champion of making this expertly researched, astute and important collection widely accessible. We are delighted to be working closely with her and her team to further this wider appreciation and enjoyment of world-class art made in this country from 1946 to the present day.” Stephen Snoddy, Director, New Art Gallery, Walsall “We at The New Art Gallery, Walsall have always regarded our relationship with the Arts Council Collection as extremely positive and rewarding and our requests for loans, even at short notice have been granted, even to the extent that the Collection curators have suggested additional loans to complement the exhibition or display. As resources become more limited the Collection will be more in demand and I’m sure it will respond by reaching out across the country.” Jonathan Watkins, Director, Ikon Gallery, Birmingham “I’m writing in response to Dalya Alberge’s article in The Sunday Times (31 October) concerning the Arts Council Collection. It strikes me as a misleading account, particularly in light of the numerous loans that have been made to Ikon, enhancing our exhibitions, making them more attractive to tens of thousands of visitors. The professionalism and responsiveness of your team is exemplary as befits the nature of the cultural asset that you manage. It is valuable (beyond the sum of the values of individual works of art) and lively through the method of acquisitions, tracing an extraordinary history as well as providing wonderful aesthetic encounters. Any idea of ‘selling parts of the collection to help meet the [current] funding crisis’ would be strategically short sighted. Please know that we here at Ikon stand shoulder to shoulder with you in resistance.” November 2010

Supplementary written evidence submitted by the Arts Council England (art 237) Following the evidence session that Alan Davey attended and your letter of the 15 November I am writing to provide you and members of the committee with a complete briefing regarding our settlement, our plans for funding organisations for the duration of our funding settlement (2011—2015) and two key pieces of work; our 10 year strategic framework, and our new programme for funding arts organisations in England. I would also like to take this opportunity to update you on our emerging thinking on philanthropy.

We are absolutely committed to ensuring that public investment in the arts works as hard as it can and I am concerned to see that recent statements from the Committee regarding the Arts Council’s record on transparency and efficiency continue to arise from out-of-date information. To this end I am also setting out more detail here on our current and future plans to remain a strong, efficient and outward looking organisation. Arts Council England has consistently worked to reduce administration costs–we have cut our operating costs by 30% since 2002–03 and since 1 April 2010 the Arts Council’s overall operating costs have been brought down to 6.6% (reduced from 9.3% in 2001–02). By current Treasury definitions we estimate just 3.4% of our grant in aid is spent on administration. When combined with lottery support work the combined figure is 4.1%. We believe this to be an extremely low figure for an organisation to operate at. During the evidence session Alan Davey attended he was asked about a number of areas of Arts Council expenditure which committee members thought were too high, including attendance at party conferences (which we have not done for the last two years), and the high numbers of staff employed in Advocacy and Communications (which were reduced by 46% as part of our organisation review). I would urge the Committee to make sure that it is looking at up to date figures, and calling well-informed witnesses, as a considerable reform of our working processes has occurred over the past two years, many of which go directly to some of the concerns voiced by your colleagues. I am sure that you and the Select Committee will appreciate our continuing efforts to reduce administration costs as far as possible. We have also worked with our partners and stakeholders to develop Achieving great art for everyone, a clear set of priorities for the arts over the next ten years, and our new arrangements for funding arts organisations in England. We are confident that both will support us in ensuring a strong and resilient future for the arts, realising our vision of England as a world leading creative and cultural nation driving innovation and excellence in the arts. Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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Arts Council England’s Settlement from Government 2011–15 On 20 October the Arts Council was given a reduction of funding of 29.6% over the period of our funding settlement. This cut means that our budget will reduce from £449 million to £349 million by 2015.80% of this reduction will take place within the first two years of our settlement. This was obviously a very significant reduction that presented us with a serious challenge. However, we will ensure that over the four year settlement period the overall budget available for funded organisations will only be reduced by 14.9% In our conversations with the arts sector we had made clear our commitment to make funding decision for this period in two stages which I outline below. In addition, we have also been asked to reduce our administration costs by 50% over the course of our settlement. Our National Council has expressed concern at the potential impact on our Charter responsibilities but we will work hard to maintain the quality and effectiveness of our advice, support and expertise, and to ensure that value for money continues to be secured from the investment we make in the arts.

Transitional Year—2011–12 In anticipation of our move towards a new programme for funding, to replace the current regularly funded system, we have put in place transitional funding for 2011–12. Regularly Funded Organisations (RFOs) will receive a year-on-year reduction of 6.9% during this transitional year 2010–11. This transitional year will mean that organisations who currently receive regular funding will have the benefit of secure funding for one year, and a full year’s notice of significant future changes to their funding. It will also allow time for discussions with co-funders and partners to minimise damage. We are now asking organisations to apply, through a very simple on-line process, for funding from 2012 onwards. All applicants will be notified of the outcome of their application to this new funding programme in March 2011. We have limited the reduction to our budget for front-line arts organisations through significant reductions to two bodies we currently fund—Creativity, Culture and Education, who administer the Creative Partnership and Find Your Talent schemes, and Arts & Business, who both received a 50% reduction in funding. The government’s complete cut to the Creative Partnership’s programme as part of the Comprehensive Spending Review meant that we had to reassess the level of support we gave to CCE. Children and young people continue to be a priority for us and we will still provide leadership in ensuring that the resources invested across the sector are used to achieve a high quality arts offer for children and young people. I understand that the Committee has expressed a strong interest in the work of Arts & Business, an organisation that has received around £4 million a year over the course of our previous funding settlement (2008–11). This will be reduced to £2 million for 2011–12, and we have informed them that they will not be eligible for regular funding beyond 2012. We have taken this decision as we believe our funds are best used to support front-line organisations directly engaged in the production and provision of art and that it is unsustainable for us to continue to provide core funding for Arts & Business in such a challenging financial climate. We are looking to move towards a private giving strategy that is owned and led by the sector and to which a number of specialist organisations—quite possibly including Arts & Business—will contribute on an openly tendered basis. We will also be reducing our development (or ‘managed’) funds by 64% in 2011–12. These funds are used for a range of projects that help us to create a resilient arts sector through work on audience development, partnership working with local authorities and the private sector, and projects including the Manchester International Festival (2010–11 funding—500k) and the Cultural Leadership Programme (2010–11 funding—£3.3 million).

2012–15: National Portfolio Funding and Achieving Great Art for Everyone During the process of putting together our 10 year strategic framework, Achieving Great Art for Everyone we have consistently made clear our intention to move to an application process for organisations that receive funding on a regular basis for 2012–15. This is an important change in the way that we provide funding to organisations and will make our investment approach more flexible, more open and more transparent. We see the four major changes to our existing regular funding programme as: — an open application process for all organisations; — funds awarded will be for a fixed term of normally three years, but there will be the flexibility to have variable funding terms of as little as two years or as many as six years; — the funding agreement with individual organisations will be tailor-made, based on the delivery of shared goals and clear criteria; and Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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— the funding agreements will be based around “strategic” and “programme” relationships with organisations, rather than a “one-size-fits-all” relationship. All funding decisions will be made against a set of published criteria, with organisations demonstrating how they will help us meet at least two of the five goals set out in Achieving great art for everyone. The five goals are: working to ensure talent and artistic excellence are thriving and celebrated; that more people experience and are inspired by the arts; creating an arts sector that is sustainable, resilient and innovative; ensuring the arts leadership and workforce are diverse and highly skilled; and that every child and young person has the opportunity to experience the richness of the arts. A list of the criteria against which we will be judging applications is contained within the guidance notes for applicants, and I have attached a copy for ease of reference. We will of course continue to support financially well-run organisations under the new application process as happened under the previous funding arrangements. This move will help us to ensure that funded organisations help us to realise the long-term vision for the arts that we have articulated in Achieving Great Art for Everyone, and to manage demand for funding at a time of diminished resource. All existing regularly funded organisations have been invited to apply through a straightforward online process. Organisations not currently funded by the Arts Council will also be eligible to apply. Following the closing date on 24 January, applications will be assessed and we intend to let organisations know of their funding for 2012–13 onwards by the end of March 2011. As I pointed out, this will give organisations at least a year’s notice of any significant changes to funding. Our funding decisions will be made in the context of the more limited resources available. This will of course mean that will have to make some very tough decisions. There will undoubtedly be good applications that we are unable to support. I would also like to reassure you that we do not anticipate a significant increase in the amount of bureaucracy surrounding this new process. Application forms will be light touch and on-line. “Box-ticking” will be minimal. Organisations will be asked to explain in their own words how they contribute to one or more of our stated goals. This is a fair and rigorous process that will enable us to provide funding in a transparent and open way.

Philanthropy Philanthropy has always been important to the arts but we now need a step change in the level and nature of the contribution from private giving. We do not underestimate the challenge this presents and the Arts Council will shortly be producing a report which we shall share for with the Secretary of State which will set out how together we can achieve this. As part of this work we have been conducting an informal consultation with a cross-section of arts organisations, philanthropists, and organisations that specialise in fundraising, and a review of the levels of philanthropic giving that funded organisations have received over the past five years. Following some very productive conversations with leading arts fundraisers about how they might help to mentor their colleagues we are confident that in the future advice and guidance can be generated from within the sector as well as working to pull together major partnerships. We also anticipate that we will launch Challenge Funds designed to incentivise donors and to direct support to the arts and cultural organisation to build their capacity. Many people within the art sector were pleased that the Select Committee chose to initiate an inquiry in funding for arts and heritage and are looking forward to a report that makes afresh case for continued investment in the arts and creative industries, properly examines the mechanisms through which that funding is provided, and makes constructive recommendations about how organisations, government and Arts Council England can work together to increase private giving. We have been disappointed that our engagement in this inquiry continues to be dominated by the particular concerns of one committee member, using out of date information that has been exhaustively aired in parliamentary questions mostly focussed on several years back. Of course Mr Watson has a perfect right to raise any matter of concern and Alan and I remain accountable for the Arts Council even in matters before we joined it. However, after six months and 120 Parliamentary Questions I would hope we could now come to focus on the present and future rather than the past. Alan Davey and I have continually attempted to engage with Mr Watson directly but so far our invitations to come and discuss his concerns about our work have been declined. We are ready to provide the committee with any further information that will be helpful to your inquiry and look forward to a constructive report that will help us tackle the challenges for the cultural sector caused by the current financial difficulties. December 2010 Processed: 28-03-2011 15:36:29 Page Layout: COENEW [O] PPSysB Job: 005777 Unit: PAG1

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Supplementary written evidence submitted by Dr Simon Thurley on behalf of English Heritage (arts 238) Subsequent to my appearance before the Committee on 19 October, there have obviously been a number of important developments with regard to the funding of English Heritage and the wider heritage sector as a result of the Comprehensive Spending Review. I thought it would be worthwhile outlining the implication of these, and the actions that English Heritage proposes to take in order to maintain and protect the services we provide. Government announced on 20 October that English Heritage’s grant in aid would be reduced by 32%. While we have been preparing for some time for the likelihood of reduced funding, the final figure was significantly more than we had anticipated. It has necessitated some very difficult decisions on our part⁄after much discussion and analysis, the Chair and Commissioners have agreed that we should prioritise those areas that we regard as being at the core of our responsibilities and for which there are no alternative providers. These are: — Our planning advice service to local authorities. This is particularly important in the light of the likely cuts to local authority funding and services. — Designation—identifying our heritage and its protection through listing and scheduling. This is an activity that no other organisation is in a position to be able to do. — The maintenance and conservation of the properties in our case, and for which we have a responsibility to look after for future generations. This approach obviously means that we will have to seek savings elsewhere in the organisation, although given the seriousness of the cut in funding we are still at a relatively early stage in our planning. In addition to further administration and efficiency savings where possible, we intend to look closely at our overlap of activities with other organisations, reduce the total budget for our grant schemes by around one third (a reduction of approximately £11m per year) and to examine ways of reorganising our current staff structure. We expect this reorganisation to involve around 200 staff redundancies, including a number of senior managers. We are also examining further ways of saving money, including changes to our casework systems and changes to the opening hours of our properties. There is no doubt that the cut in funding will have a dramatic effect on the way that English Heritage is able to carry out its responsibilities. We are particularly concerned that when combined with the likely reductions to heritage services in local authorities this will lead to significant pressure on the historic environment. At the same time, we have had no choice but to reduce our research capacity⁄thereby reducing our ability to better investigate and understand England’s heritage. We aim to publish a Corporate Plan early in 2011 which will set out and explain what and how we will operate over the next four years. At the same time, we are discussing with other organisations how to minimise the impact of reduced funding on the historic environment. December 2010

Supplementary written evidence submitted by the Arts Council England (arts 240) Select Committee Follow-up I am writing with the additional information that you have requested following the evidence session that I attended with my Chair, Dame Liz Forgan, on 25 January 2011.

How many works in the Arts Council Collection have not been shown in the last 10 years? 4,102 pieces from the Arts Council Collection have not been displayed within the past 10 years. With a loan rate of 20–30%, we believe that the Arts Council Collection works extremely hard in comparison to other national collections and we are already looking at how we can better market the collection to ensure that more work is displayed and greatly improving digital access to the collection. We also need to ensure that at a time when we are acquiring functions for museums, that the Arts Council Collection continues to be administered with reference to the Museum Association’s guidelines governing national collections, including those about de-accessioning of art works. The de-accessioning of parts of the collection could pose financial or legal difficulties as well as compromising the integrity and reputation of the collection.

What was Moss Cooper’s severance package? Moss Cooper, Director of Capital Services, was made redundant on 30 June 2006 as part of a major rationalisation of the National Lottery funded Capital Services Team, which during 2006 was reduced from a staff team of 28 and which now comprises a Capital Services Team of four posts. As with other staff made redundant as part of this restructuring process, Mr Cooper received the statutory redundancy payment he was entitled to as outlined in the Arts Council’s redundancy terms agreed with our recognised trade union, Processed: 28-03-2011 15:36:29 Page Layout: COENEW [E] PPSysB Job: 005777 Unit: PAG1

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Unite and received no other additional payment on the termination of his employment. Due to employee confidentiality under the Data Protection Act and other legal considerations, we are not able to disclose the actual sum Mr Cooper received. I have checked and can confirm that as part of this process Moss Cooper was not commissioned to write a report about The Public in West Bromwich.

What is your assessment of “disproportionate cost”? (re: retrieving documents written by Moss Cooper) When responding to the questions arising out of my evidence session on the 12 October, we used the expenditure limit for Parliamentary Questions as an indicator of disproportionate cost, which is currently set at £850. As I stressed in my letter of the 4 November, we have five years worth of records on The Public in West Bromwich and we consider that the time and expense of retrieving these records and identifying whether they contain any reports by Moss Cooper that we don’t know about would have exceeded this limit.

You said that you would e-mail Moss Cooper to ask about the reports he wrote. Have you done this? If so, what was the response? We have contacted Moss Cooper asking whether he wrote a report on The Public as part of his leaving arrangements with the Arts Council. He thinks that there may be confusion between the writing of a “Moss Cooper report” and a major assessment milestone of what was then called C\plex (the former trading name for The Public) undertaken by the Capital Department, published in 2003–04. He also said that prior to going on sabbatical in February/March 2005 he wrote a paper for Peter Hewitt and Keith Harrison on capital projects. This was a modelling exercise looking at the likely revenue trends of the capital projects that had completed, and also that were due to complete within the next five years. Included in this modelling would have been the likely future revenue needs of C/Plex, along with the needs of many other capital projects. We are locating these within our archive and will send you copies or relevant extracts when they have been located. Please let me know if you require any clarification in response to the above or if there is any further information that I can provide you with to assist you with your inquiry on funding for the arts and heritage. Alan Davey Chief Executive 18 February 2011

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