28 August 2018

Time to reform out of touch, London-centric arts funding

By Callum Price

The Edinburgh Festival, which is nearing its end for another year, is both a cultural triumph and an economic asset. It’s an important reminder that arts and culture don’t just represent an important, job-rich industry, but also go a long way to making the UK a world-leading soft power.

However, the current system of public arts funding, which is channelled mainly through the £622m annual budget of Arts Council England (ACE), is not conducive to a fair and flourishing cultural sector. Improving things for both institutions and consumers means replacing state subsidies with more private money.

At the moment, far too much of taxpayers’ money is spent in unproductive or even counter-productive ways.  Government funding should focus purely on areas where private sector investment is not initially forthcoming to ensure that the UK’s arts industry is diverse and widespread, instead of topping up the coffers of institutions that are already doing very nicely indeed.

One of the biggest issues with public arts funding in the UK is its bias towards London. In 2014-2018, 36 per cent of the recipients of funding from ACE were London-based. The 2018-2022 budget promised to shift investment away from London, but the proportion of organisations in the capital getting funding has only fallen from 36 per cent to 32 per cent.

One may protest that London’s role as a global city and the UK’s main tourist centre warrants the extra spending, but this justification is the wrong way around. We should move state funding away from London precisely because it is a global city, not in spite of it.

London is by far the most prosperous UK region and is already miles ahead of the rest of the UK in attracting private arts funding. People want to invest in London and are doing so in droves. There is simply more money in London, and more to spend on arts and culture. So why does it also receive vastly more than its fair share of public money?

The Royal Opera House, the Southbank Centre and the National Theatre are household names worldwide, attracting the best talent to put on some of the world’s most prestigious performances. They boast of the large amounts of funding they raise privately while still taking vast amounts of taxpayer money — these three institutions have taken the top three spots in ACE grants for the past six years, totaling £370.6m.

Often the argument is that taxpayers ‘should not be expected to subsidise theatres and museums that can’t stand up by themselves’. But expecting the taxpayer to subsidise institutions that would have little issue standing up on their own is even more misguided. A report into arts funding outside of London published by the Culture, Media and Sport Committee in 2016 is positive about increasing private revenue streams in the arts, and with evidence from much smaller and, on paper, less economically productive institutions.

For example, in preparing to lose their income from the local authority, some 55 per cent of their total revenue, Derby Museums found lucrative partnerships with companies such as Rolls Royce, increasing earned income tenfold in three years. If institutions in small cities such as Derby can manage it, the opportunities in the capital should be almost limitless.

But what is the advantage of private spending over public? Firstly, private money is voluntary money. This is funding that has been given willingly via donations or partnerships instead of taken by fiat from someone’s pay packet. This alone is a compelling reason to swap public funding for private wherever possible.

Secondly, private funding is more responsive to consumer interests. Money given willingly is given where there is interest and enthusiasm – the arts and culture people are most enthused by flourish.

Public funding relies on government officials deciding what deserves money and what doesn’t on an arbitrary basis. By relying on private income streams – rather than the tastes of those that run ACE – art institutions are forced to provide something that is appealing, making the arts more focused on the public they are meant to serve.

This does not mean that there is no role for state funding. In 2011, when ACE announced cuts of up to 15 per cent to the biggest arts institutions in the UK, Tony Hall, then Chief Executive of the Royal Opera House, said: “I think it is right we share some of the burden of ensuring some of the smaller less well-funded companies survive and grow”.

This is the right sentiment and is important for artistic diversity. Why should the taxpayer sink £155,000 per performance into the English National Opera, an artistic medium considered too posh even for the majority of Classic FM listeners, when there are hundreds of young artists struggling to find funding for new and exciting things across the country at festivals like Edinburgh, which are often much more accessible?

By cutting public funding where it is replaceable, we can better support institutions that provide value to local arts scenes which are not yet attractive enough to rely purely on private income. With the savings from the money that is currently channelled to cultural behemoths, there will be more room to fund a wider array of smaller institutions and organisations that may struggle to get off the ground initially.

Of course, it is always important to spend public money well. Channelling it out of London towards burgeoning cultural hubs around the country, where the taste for arts is proven and where there is a local identity to foster, would ensure that government support adds real value. State funds should be given on a time-limited basis, with a view to withdrawing from institutions once they are off the ground and able to find private revenue.

The reforms outlined here require a shift in the culture around arts funding, away from a de facto reliance on the government. Arts institutions should be more acutely aware of their charitable status and act appropriately in order to encourage private sources of revenue, instead of being encouraged to lean on the taxpayer.

Once this begins to happen, and the state withdraws, more private money will begin to flow in. Many investors are deterred from contributing to institutions when they receive substantial government funding. This is the same for large corporations and donors as it is for the average individual donor looking to make a small contribution. Why should I give up some of my income to a theatre that I already pay for through my taxes?

A pivot in our attitude towards arts funding will save the taxpayer money and open up opportunities for more valuable state investment outside of the M25. An arts industry funded in this way will be fairer for the taxpayer and more responsive to the consumer.

Callum Price is Events Manager at the Centre for Policy Studies