Written evidence submitted by Paul Kelly
This submission is from Paul Kelly, Senior Lecturer
in Arts and Event Management, writing in a personal capacity.
The author spent 15 years working as an arts manager in not-for-profit
arts organisations followed by 15 years as Principal Arts Officer
for a large Local Authority (population 250,000). He is now Senior
Lecturer in Arts and Event Management at the Arts University College
There have already been cuts to arts funding
which have had an impact on services and opportunities. Further
cuts will have further impact. Whilst it is too early to identify
the extent of the impact, we think it likely that activities at
community level, in more rural areas and activities outside of
the mainstream will suffer most. It is also likely to be harder
in future to obtain arts funding and this will disadvantage people
who lack particular language or application writing skills, even
though they may have good ideas and delivery ability.
3. What impact recent, and future spending
cuts from central and local Government will have on the arts and
heritage at national and local level;
3.1 It is probably too early to try and
quantify the impact of recent central and local Government cuts
on the arts and heritage sector. But there will be impacts and
these will probably have an effect on the availability, accessibility
and affordability of arts and heritage activities and opportunities
to local people. The Select Committee should also bear the following
(a) There has been a well documented loss of
local arts services over the past seven years. [add detail of
local authority arts cuts] Forty-four local authorities have withdrawn
all arts funding over the past seven years. This accounts for
approximately 15% of all local authorities with previously active
arts services. In addition many local authority arts officers
have reported standstill budgets over the past three years. This
represents a real cut to arts budgets given that inflation has
to be taken into account.
(b) We know that one County Council is currently
examining an "exit strategy" for arts funding which
will lead to a complete loss of all arts funding, staff and services.
We are not able to put a financial figure on this at this time,
but withdrawing all arts spending will undoubtedly hit a number
of arts and social organisations in that area, large and small.
This may be an extreme case; alternatively it may be the start
of a trend.
(c) The impact is very likely to be greater in
areas of lower population densityeg rural areas.
(d) Owing to a mix of funding policies and management
practices, some arts organisations, and it could be quite a large
number, are under-capitalised and are either managing deficits
or have little in the way of tangible assets or significant cash
reserves. This makes them very vulnerable when funding is reduced
or withdrawn. It could be that reductions in grants will make
such organisations either insolvent or unviable.
(e) The impact of budget cuts could hit small
community projects hardest. These often do excellent work in making
the arts more accessible, especially to deprived communities.
But they are often low-key with low visibility and lack "sponsor
4. What arts organisations can do to work
more closely together in order to reduce duplication of effort
and make economies of scale;
Two points here:
4.1 Arts organisations often have distinctly
different artistic traditions, roles and directions, but the management
capacities to deliver theseplanning, marketing, finance
and accounting can require very similar applications. Back office
collaborations or mergers might yield financial efficiencies.
For example in one Cathedral City of around 100,000, there is
a Festival, Theatre and Arts Centre. The artistic directors meet
and talk quite often. But each organisation has its own administrative
staff. Apart from history, why?
4.2 In my experience arts organisations
treat funding and fundraising as a competitive exercise and do
not tend to share information with each other. In one sense that
is understandable. But unless and until arts organisations are
more open with each other they will not be able to work more closely
together and make economies of scale.
5. What level of public subsidy for the arts
is necessary and sustainable;
5.1 To answer this question you first need
to decide whether you are going to operate a "top down"
system or a "bottom up" system. A top down system could
be expressed as a percentage of government spending with a target
figure both for central and Local Government. I believe a figure
of 1% of government spending for the arts has been discussed as
such a target on occasions in the past.
5.2 A "bottom up" system could
identify what artistic experiences and facilities communities
should have "a right" to enjoy. It could look at these
in terms of per capita delivery. It could cost those and it could
also map what facilities currently exist, what they cost and where
they are in relation to population. Both of these are rational
ways of establishing a level of public subsidy for the arts. They
are also markedly different from the rather irrational way that
arts funding has grown.
5.3 The issue of sustainability is one partly
to do with political philosophy (especially around public spending),
partly to do with national economic performance (governments may
feel willing to spend more if the country seems to be doing well).
Sustainability is also affected by population growth and shift;
a bigger population both implies a bigger need for funding if
a per capita target is to be sustained but also bigger tax revenues.
Populations are not static (eg Thames Gateway) and that needs
to be factored into sustainability issues. The 10 year census
ought to provide useful data for review.
6. Whether the current system, and structure
of funding distribution is the right one;
6.1 My response refers solely to the arts
funding system. On the one hand the arts funding system has been
continually re-structured, Arts Council England (ACE) seems comparatively
well-led at present and further structural change at a time of
considerable funding reductions might not be wise.
6.2 On the other hand the decision in 2001
to abolish the Regional Arts Boards and to create a single national
arts funding body has led, over a period of time, to a loss of
local expertise and commitment and has, to varying degrees, weakened
relationships with Local Authorities which have been significant
investors in arts and heritage.
6.3 If the philosophy and policy of devolving
power to local level, as set out in "Building A Big Society"
is to be applied to the arts, then a further review of the system
and structure of arts funding may be needed. It may also be worth
re-examining the system that existed until 1990 of independent
regional arts bodies, that were a partnership between local artists
and arts organisations, Local Authorities and the national arts
6.4 In addition the DCMS "sponsored
body" system does not properly recognise a growing plurality
of funding and interests. It is easy to think that Arts Council
England is the arts funding system. But this ignores a
significant investment in the arts by Local Authorities. It overlooks
investment by the Higher Education Funding Council and possibly
the education funding bodies who support arts centres and arts
programmes through HE and FE institutions. It also overlooks the
more recent role taken up by the sector skills council, Creative
and Cultural Skills. All of these are public sector bodies and
all re stakeholders in the arts sector. The current system does
not recognise this or encourage these complementary bodies to
7. What impact recent changes to the distribution
of National Lottery funds will have on arts and heritage organisations;
There will be more money from the Lottery for
the arts and heritage and that will obviously be positive, unless
the increase in Lottery funding merely fills a gap created by
a reduction of Treasury funding. The nature of the impact will
also depend on whether lottery funding rules or schemes change
or notsee my response to question 6.
8. Whether the policy guidelines for National
Lottery funding need to be reviewed;
8.1 When arts Lottery funding became available
it was solely for capital projects. Between 1994 and 1997 arts
found themselves with a "revenue drought" and a "capital
flood". Between 1997 and about 2006, that flow became reversed
and the arts experienced a lottery "flood" and a capital
"drought". In addition the threshold for arts lottery
revenue and project threshold seemed to climb at both the minimum
and maximum levels.
I have four points to make here:
(a) I don't think the capital/revenue balance
is right. Even though we may be facing hard times, buildings still
need repair and improvement, and organisations need better equipment.
So, some lottery monies ought to be available for new arts capital
applicationsmaybe 10-15% of arts lottery funds per annum.
(b) One lesson from the 1990s Regional Arts Lottery
Programme is that very small sums of money can make things happen,
instil confidence and bring about some quite big differences at
(c) Within the last 18 months the arts have been
more or less excluded from the Big Lottery's Awards for All scheme
and this is a retrograde step.
(d) The arts lottery needs to introduce a scheme
for one off projects or projects lasting up to three years that
allows bids of, I suggest, between £300 and £1,000.
The application process and form needs to be simple (the Awards
for All form is actually quite complicated).
9. The impact of recent changes to the DCMS
arm's-length bodiesin particular the abolition of the UK
Film Council and the Museums, Libraries and Archives Council;
9.1 It's probably too early to say. But
I would make two points; first, perception counts for a lot and
if reports in the press are correct, some senior figures in the
film industry believe that the abolition of the UK Film Council
is a bad thing. If they believe that then the abolition does not
help the film industry.
9.2 My second point is about human capital.
People build relations with people. When I worked for a Local
Authority a constant moan I heard from arts organisations about
the Arts Council was that the staff there kept hanging. No sooner
had they built a relationship with a member of ACE, then that
person left. An institution is much more than just a financial
cost. Abolish an institution and you lose all the human capitalthe
trust, the relationships and sector-specific knowledgethat
is an intimate part of that organisation. This human capital can
be worth far more than the annual financial cost. Abolition is
a blunt instrument that may be very damaging and expensive.
9.3 In addition whilst the Government has
broadly identified ways of sustaining support for the film industry,
I am not aware of a similar announcement about sustaining support
for museums, libraries and archives. All three are vital to our
national heritage and also provide crucial source material for
our creative industries. The abolition of the MLA has attracted
far less press attention than that of the Film Council. On current
evidence it seems far less thought through.
10. Whether businesses and philanthropists
can play a long-term role in funding arts at a national and local
10.1 The simple answer to a rather simple
question is "yes", but this needs considerable qualification.
Two hallmark yardsticks of policy measurement are "efficiency"
and "effectiveness". Business and philanthropic support
for the arts may increase policy efficiency by diversifying the
funding and reducing reliance on the public sector. But suppose
we argue that an effective arts policy is one in which all people
in England who wish to can access the arts; will business and
philanthropic support for the arts serve this objective? The answer
is not necessarily. It may be very difficult to attract business
support for rural arts projects or for projects working with deprived
communities or local projects without high PR profile. Businesses
and philanthropists may wish to support specific types of arts
projects. Some areas of England will have low concentrations of
business with the capacity to invest in arts projects.
10.2 It is also not quite clear what this
questions means by the phrase "can play a long-term role".
That could imply changing the arts funding balance over the longer
term. Or it could imply investing in endowment funds that generate
annual income and thus have a long term impact.
11. Whether there need to be more Government
incentives to encourage private donations.
11.1 The British arts funding system is
often compared to its American equivalent. In America the arts
attract a much higher per capita level of private donations than
in England. Though I seen no research on this, it is popularly
believed that the high level of private donations in the USA is
partly due to the fact that they are tax-deductable. It should
also be added that America almost certainly has a higher proportion
of millionaires than England.
11.2 What will incentivise private donors
in England? Our Government incentives actual or under discussion
seem to include receptions with Government ministers and/or the
"Honours System". If that is the level of "incentives"
under discussion, it seems to me to be a bit Ruritanian.
11.3 If the Government is serious about
encouraging private donations for the arts, then it needs to reform
and market the Gift Aid systemnot widely known and complex
to operateand/or to introduce further tax benefits for
private donations. The current system is also not very egalitarian.
If you happen to have inherited an historic painting worth millions
you can negotiate to gift it to the nation in lieu of death duties.
But if you wish to support an arts enterprise or creative project
with your own hard earned cash there seems to be no equivalent
tax break on offer.