Written evidence submitted by VAGA, The
Visual Arts and Galleries Association (arts 144)
1. Key issues:
The visual arts economic, social and
cultural contribution to the UK depends on a complex and finely
balanced mix of public and private investment and earned income.
Galleries are particularly sensitive
to cuts in public subsidy; they have the highest percentage of
local authority funding and lowest percentage of earned income
amongst the artforms.
Proposed public sector cuts and reductions
in individual disposable income will create a "perfect storm";
with lasting and irreversible impact.
Most visual arts organisations have low
levels of unrestricted reserves; cuts in public subsidy will have
Time is needed to marshall collective
resources and develop new ways of working.
Severe reductions in levels of funding
could foster adverse competitiveness rather than collaboration.
Current levels of public subsidy are
essential to maintain provision in the country's most deprived
The increase in lottery funding for arts
and heritage will only in part replace lost government investment.
National Lottery policy guidelines should
allow flexibility but should not allow "back-door" replacement
of treasury funding.
Abolition of MLA creates potential for
joined up strategy, benefiting the visual arts sector as a whole.
There is no one size fits all in investment
and subsidy. Organisations emerge and become established in response
to specific contexts.
Arts organisations have experienced a
70% downturn in business support during the recession; private
sector support is scarce outside London.
The aspiration for philanthropy to play
a long-term role in funding the arts nationally and locally is
a considerable way from fulfillment.
2. The visual arts sector is an international
success story, contributing to tourism, the knowledge economy,
our international standing and fuelling the creative industries.
Our galleries and promoters are part of a global network that
draw increasingly wide audiences from across the world.
3. Galleries, collections, artists studios,
public art and artists projects have transformed the fabric of
local communities over the last fifteen years. We believe engagement
with visual art improves individual well being and aspirations.
Research has defined the economic social and cultural impact of
the visual arts particularly in regeneration; whilst additional
research shows that contact with art and artists raises standards
of teaching and learning in schools.
4. The sector's GVA is £1.9 billion,
craft and cultural heritage add a further £4.1 billion. In
2006-07 5.2 million people visited Tate Modern making it the most
visited modern art museum in the world. Frieze Art Fair attracts
over 60,000 visitors annually, achieves sales of c £33 million
and occupies 25,000 hotel beds.
5. 15.8 million people visited regional
museums in England in 2008-09 including 900,000 school children.
Liverpool Biennial, 2008 had 451,000 visitors over 10 weeks. Nottingham
Contemporary welcomed 200,000 visitors within eight months of
opening; it is estimated that local business received an additional
£1.5 million during the opening exhibition.
The Banksy exhibition, Bristol City Museum and Art Gallery, 2009
was the eighth most popular contemporary art exhibition in the
6. Visual art makes a significant contribution
to the "Big Society"Citizen Power Peterborough,
a Royal Society of the Arts, Peterborough City Council and Arts
Council England visual arts-led project is, for example, exploring
how community action might improve networks, build local participation
and public service innovation.
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. The visual arts considerable contribution
to the UK depends on a finely balanced mix of public and private
investment and earned incomea "tripod economy"
where public funding provides the foundations upon which earned
income and private investment is built.
No two visual arts organisations have the same financial profile.
8. Public investment comes, typically from:
Local authority discretionary budgets.
Arts Council England Treasury and lottery
Higher Education galleries receive Higher
Education Funding Council support.
9. The majority of organisations are:
Not-for-profit companies with charitable
Departments of local authorities.
Within the Higher Education sector.
10. All are vulnerable to public spending
cuts, anticipated increases in the cost of living, reductions
in disposable personal income and pressure on corporate funding
and charitable trusts and foundations. The latter is due to increased
competition for grants, low interest rates and market fluctuations.
41% of the top 300 charitable trusts saw a fall in the value of
their grant-making in 2008 and a 10% overall drop in net asset
11. In 2009-10 the visual arts received
£7.6 million from ACE's Sustain programme to alleviate immediate
impact of the recession. Organisations have already:
Made operational and efficiency savings.
Improved facilities to increase earned
income (eg Modern Art Oxford is upgrading its entrance retail
spaces to increase foot fall, dwell time and shop income).
Developed mission-led income through
12. ACE regularly funded organisations have
managed a 0.5% in-year cut this year, and are now modelling a
minimum 10% ACE reduction and range of indicative reductions in
local authority and Higher Education investment for 2011-12.
13. Many visual arts organisations own buildings
and or collections but largely have:
No unrestricted reserves.
Operating reserves of under three months.
Do not have the capacity to generate
an annual surplus.
14. Lack of working capital results in vulnerability
to sudden income reduction; there is neither the financial cushion
to continue trading whilst establishing alternatives nor the ability
to invest in income generation.
15. Lack of cash reserves is a barrier to
longer-term sustainability (eg. investment in new technology to
drive up audiences or carbon reduction).
16. The proposed cuts will, therefore have
immediate rather than gradual impact.
17. Some organisations will make savings
through reducing the quantity/quality of exhibitions, outreach
and education activities, cutting staff, marketing and development
budgets and restricting opening hours. The New Art Gallery Walsall
will close on Mondays from November 2010 and Sundays from April
2011 and its estimated that attendance figures will drop by 20%.
18. Staff savings are limited, levels and
salary costs are at a minimum, pay and recruitment freezes are,
for some, already in place. 75% of the sector's 4,850 businesses
employ under five people; 60% of those employed in the sector
earn under £18,000 per annum.
19. Galleries are largely free to visit.
Earned income is based on ancillary trading, eg. catering franchises,
shops, corporate hires. In 2008-09 the average amount of earned
income achieved by ACE regularly funded visual arts organisations
was 34% of turnover, with public subsidy accounting for 55%. Earned
income has increased from 27% in 2005-06 but is still significantly
lower than all other artforms, eg theatre 53% in 2008-09.
20. Between March and September 2009 50%
of UK museums saw an increase in visitors attracted by free entry;
however ancillary sales decreased by 18% in the same period.
21. A number of visual arts organisations
have adopted social enterprise models, tendering for contracts
to deliver services for local authorities and other public agencies;
others are working to ensure that they are procurement ready.
The depth of proposed arts cuts and the snowballing impact of
cuts across the public sector mean organisations may suffer irreparable
damage before realising this potential.
22. There is concern that local authorities
are reviewing discretionary rate relief, eg. the London Borough
of Camden. If implemented this will add considerably to the running
costs of Camden Arts Centre; the venue is also anticipating the
impact of Community Transport, Out of School Learning and Youth
Services cuts on its community education programme, a proposed
50% cut in revenue funding from the borough and a minimum cut
of 10% in revenue funding from ACE. The cumulative effect will
be very damaging.
23. The impact of organisational cuts is
matched by that on individual artists. Recent data indicates that
the value of employment opportunities for professional artists
has declined by 27% in the past year.
Universities, the "top employer" of artists are set
to lose 1 in 6 posts. Artists and public art commissioning agencies
saw a sharp decline in work generated by the private sector in
2008/09 as development slowed and developers went into administration.
Studio providers are already seeing artists unable to renew leases.
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 visual arts constituency is already
considering how to collaborate and make economies of scale. The
Turning Point networks funded via ACE are a mechanism for regional
collaboration. Tate is taking a national lead, helping the sector
maintain its sense of purpose and ambition and to finds ways of
collective working. Ideas include, for example, the development
of procurement consortia for utilities, IT, shipping, storage
and display equipment and development of ways of pooling patronage
and sponsorship income to create greater investment yield.
25. The Whitworth Gallery and Manchester Museum
are restructuring to share common functions including visitor
services, learning, public engagement, front-of-house services
and collections care. This will enable the organisations, who
share a parent body in the University of Manchester, to protect
the quality and innovation of artistic, educational and outreach
programmes. However restructuring requires initial investment;
many visual arts organisations lack cash reserves to initiate
26. Time is required to marshall collective
resources and find solutions. Rationalisation is easy to advocate
but often harder to achieve with differing scales of activity,
governance models and growing local accountability. Partnerships
take time and effort to work. Severe reductions in funding could
foster adverse competitiveness rather than collaboration.
27. Umbrella bodies, given the reduction
in ACE's capacity and the abolition of MLA, are well placed to
assume enhanced roles. VAGA occupies a unique position in having
a membership that is drawn from both the contemporary visual arts
and museums sector and has a national perspective, grounded and
informed by the membership.
28. VAGA is part of Visual Arts UK (VAUK)
a network of representative bodies and agencies that collectively
represents the full spectrum of publicly funded visual arts activity
across the UK and has a joint constituency of 60,000 plus organisations
The VAUK network members provide economies of scale, build capacity
and streamline resource by sharing knowledge, providing models
of good practice, setting standards, creating connectivity and
What level of public subsidy for the arts and
heritage is necessary and sustainable
29. National funding for the arts currently
costs less than 17p per person per week. This small amount of
subsidy has enabled world class art to flourish.
30. We need a varied sector with flexible support
for artists and arts organisations. There is no one size fits
all solution, organisations flourish in response to specific contexts.
Small arts organisations and interventions at regional and sub-regional
level are vital to artistic development, support learning, social
regeneration and public engagement. They are the test beds that
keep flagship venues vibrant and relevant.
31. The New Art Gallery Walsall financial
modelling indicates that a 25% cut in public subsidy over the
next four years, followed by 4% annual increases in subsidy will
see budgets returning to current levels in 2021-22; this is without
an adjustment for inflation. A 30% cut in subsidy over four years
followed by 2% annual rises means that 2010-11 budget levels will
not recover until 2030-31. From this snapshot the venue would,
in effect, never recover from a 30% cut without a major additional
cash injection. The West Midlands is the English region most badly
affected by the economic downturn and opportunities to raise philanthropic
donations are virtually non-existent. The Gallery has over 200,000
visitors per annum. This example shows how current levels of public
subsidy are necessary to maintain provision in some of the countries
most deprived areas.
Whether the current system, and structure, of
funding distribution is the right one
32. The longstanding lack of both an integrated
structure through which visual arts funding is distributed and
of a joined-up strategy for visual arts development can be argued
as being detrimental. The diversity of public subsidy can however
also be advantageous, for example local authority investment creates
strong local relationships and the ability to partner and lever
33. The discretionary nature of local government
funding is concerning. Lack of, or reduction in local authority
funding can be seen as lack of local commitment by other funders
and undermine confidence in an organisation. This can instigate
a domino effect of support withdrawal. Trusts and foundations
are keen to ensure that they are not replacing public subsidy
and are generally not open to on-going revenue funding. The Charity
Commision's Firm Foundations report notes that trusts and
foundations are increasing their scrutiny of recipients viability
and use of grants.
34. Nationally the visual arts are split
across ACE and MLA, with the National Galleries receiving direct
DCMS funding. This has weakened visual arts' status within ACE
and led to historic underinvestment. The Turning Point
initiative sought to address this but, now at mid-point of the
ten year framework substantive change will be curtailed severely
by the impending cuts. Visual art receives the highest percentage
of income from local authorities compared to other artforms, leading
to further fragmentation and greater vulnerability to cuts.
35. VAGA has previously lobbied for closer
alignment between ACE and MLA noting the considerable overlap
between many of the aspirations of "Turning Point" and
the priorities of "Renaissance in the Regions" managed
and funded by MLA, in particular around commissioning, collections,
audience development and learning.
36. VAGA is concerned that:
The arms' length principle is maintained
and ideally strengthened in response to the trend for directive
policy from both central government and the NDPBs.
A national strategic overview is maintained
that can marry the local with the national and international.
What impact recent changes to the distribution
of National Lottery funds will have on arts and heritage organisations
37. The National Lottery has underpinned
total reinvigoration of the visual arts infrastructure supporting
significant growth in the number, size and quality of gallery
spaces across the UK and creating more equitable provision. Lottery
funding has also supported ambitious commissions and a myriad
of small projects, delivering art to all sectors of society.
38. ACE distributes approximately £350
million per annum to 880 organisations, of which 190 are visual
arts. In 2010-11 this amounted to visual arts funding of £44million,
prior to the 2010-11 0.5% in-year cut. A 30% reduction in ACE
funding to all organisations would be a reduction of £134
million per annum, which the potential increase in National Lottery
funds of c£50 million pa will only mitigate partially.
39. Proposed changes to ACE funding programmes
will bar those in receipt of either "partnership" or
"project" funding from applying for additional support
via the lottery "Grants for the arts" programme. Grants
for the arts funding has supplemented artistic and education budgets
for many organisations and this will have a detriment effect on
innovation and developmental provision.
Whether the policy guidelines for National Lottery
funding need to be reviewed
40. Given the reductions in treasury funding
ACE Policy Direction 2007 O (a) and HLF Policy Direction 2007
N (a) which restrict lottery funding to time limited projects
that have a specific purpose need to allow greater flexibility.
However we would be concerned if National Lottery funding became
a replacement for, rather than an addition to treasury funding.
The impact of recent changes to DCMS arm's-length
bodiesin particular the abolition of the UK Film Council
and the Museums, Libraries and Archives Council
41. The abolition of the MLA creates potential
for a more joined up approach to visual arts strategy and development
to be forged with Arts Council England, benefiting the visual
arts sector as a whole.
42. There is widespread concern regarding
future delivery of MLA's development role, particularly with the
administration savings that are required from the remaining NDBPs.
43. There is also concern that specialist
knowledge should be retained. ACE staff are experts in contemporary
visual arts but have limited collections knowledge. It is important
to recognise the size and diversity of the museums sector, which
is responsible for the preservation of industrial and scientific
heritage as well as historical art collections.
Whether businesses and philanthropists can play
a long-term role in funding arts at a national and local level
44. There has been a 70% downturn in business
support during the recession and most expect the recession to
impact on their fundraising efforts until 2011; the Olympics are
cited as a further barrier to securing sponsorship over the next
45. Organisations are now focusing on creating
relationships with more businesses for less money, entailing more
effort for the same or lower levels of return. Business support
is notoriously ficklemergers and takeovers or dips in profitability
can radically alter a company's willingness to sponsor or donate..
Corporate social responsibility is an area which could benefit
from government influence.
46. Private sector support outside London
is hard to secure. 3.6% of individual giving in the UK goes to
the arts, 78% of this goes to London or national organisations
with annual turnovers of £10million plus. This means that
0.79% in total goes to culture in the regions.
The aspiration for philanthropy to play a long-term role in funding
the arts at a national and local level has some considerable way
to go to find fulfillment. Visual arts are ill-placed, currently
receiving one of the lowest levels of business investment compared
to other artforms.
47. Established trusts and foundations report
increased demand for support at a time when funds are diminished;
the full extent of the market downturn is now being felt and will
continue into 2011.
Legacies are an increasing trend in individual giving, however
one in four charities expect to see legacy yields decrease in
48. Attitudes influence business and philanthropic
support. Robert Devereux a high net-worth individual and contemporary
art collector states "I don't think philanthropy should be
a substitute for government spending ... it should be a partnership."
He also notes "it's difficult as peoples wealth has been
damaged as well, which makes it harder for them to consider giving."
Whether there needs to be more Government incentives
to encourage private donations
49. VAGA would advocate for Government incentives
to encourage both business and private donations, particularly
the introduction of life time giving and moves to make gift aid
easier for donor and beneficiary.
VAGA, the Visual Arts and Galleries Association
is a professional network promoting the visual arts and representing
the interests of organisations and individuals working in all
aspects of their presentation and development. Our UK-wide membership
represents a substantial constituency of professionals and organisations
from large local authority museum services to small artist-let
project spaces. www.vaga.co.uk
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