Arts Council England has found itself between a government rock and an arts hard place, struggling to survive in its current form.
From the point of view of potential beneficiaries, drastic funding cuts and questionable decisions, often influenced by political considerations rather than artistic excellence, have drawn widespread opprobrium. At the other end of the equation, the current government appears to have doubts about the effectiveness of the funding body, Culture Minister Lisa Nandy having instituted a review process.
Given the pressures on government at the moment, there must be concerns that the intention of those behind the review is to cut costs, either making Arts Council England sleeker and cheaper, perhaps obliged to cut staff or move to some far-flung part of the British Isles? In a worst-case scenario, it could even be closed down as a cost-cutting measure, although that seems unlikely.
In this climate, it may not be entirely coincidental that last week the body issued a report entitled Leading the Crowd. This introduces a new concept of “Crowding In”. For the uninitiated, that is the idea that public investment in the arts encourages the private sector to follow suit. This may sound unintuitive and some may question its validity, but the report is reasonably convincing, aided by a series of small-scale case studies.
You can feel ACE supremo Sir Nicholas Serota’s frustration, in an interview that he gave to The Guardian on the launch of the report. “The arts have been on standstill funding since 2010 and [organisations] have shown themselves to be enormously inventive and resilient in finding new sources of funds and working in new ways. But there is a limit to what can be achieved.
“It would be a tragedy if we were not able to maintain momentum.”
The report itself is introduced in bullish fashion: “this report provides evidence that public investment in England’s arts and cultural sector plays a pivotal role in attracting further income from private and earned sources—commonly referred to as ‘Crowding In’. This effect underpins the mixed economy model that sustains most cultural organisations in England, combining public funding, private investment, and earned income.”
Some of the conclusions in the report might initially seem counterintuitive but are presumably based on detailed, supportable research. It identifies six ways in which public investment enables “Crowding In”, benefiting cultural organisations in:
- Delivering capital projects
- Generating private investment
- Driving additional commercial income
- Encouraging innovation
- Developing new activity
- Building organisational resilience
This draws on that mixed economy model, assuming that most cultural organisations draw on the three income streams: public funding, private investment and earned income. In the two years leading up to the pandemic interregnum, the last of these provided about half of the income, public funding around 30% and private investment the last 20%.
The controversial news arising from this report is the theory that public investment actively encourages and facilitates both the generation of commercial income and philanthropy / sponsorship. In addition, it is required to promote greater financial stability, artistic risk-taking, broader access to culture and entrepreneurialism.
The problem comes when the public funding tap is turned off or severely limited, as has happened over the last decade. If the theory is correct, then it would seem to follow that, as a result of facing reductions in public funding, cultural bodies will naturally also lose income from sponsors and the punters. This seems open to question, given that since the advent of the pandemic, large arts organisations have survived thanks to seeking other sources to fill, at least in part, cuts from government and ACE.
There is a true sense of irony in some of the case studies chosen. Given ACE’s shabby treatment of the English National Opera, cutting off its funding and then forcing it to relocate to Manchester, it seems an exceptionally bad example to take.
In slightly less drastic fashion, the National Theatre has also lost out badly to funding cuts in recent years and been obliged to expand its commercial fundraising activities, at the same time as increasing ticket prices substantially in an effort to survive, let alone make ends meet.
A further example is the English National Ballet, which has reached financial stability raising £31.9 million for a capital fit and a lease premium. Only £7 million (£6 million from ACE) of this came from public funding, £14.3 million from the sale of a lease and the balance from private donations. That is hardly a strong endorsement of ACE’s support, unless you buy the theory that without the £6 million, the rest including the property sale wouldn’t have come along.
We shall have to see what the government concludes from its review of ACE, but few can anticipate that it or a successor will be flush with funds any time soon.
Next week, this column will follow a similar theme, taking a look at a new report just released by the Society of London Theatre and UK Theatre warning of rising costs and shrinking support for the sector despite record audiences.