Following Culture Minister Maria Miller's recent speech about the need for the arts to make the economic argument for subsidy, Arts Council England has published a detailed report from the Centre for Economics and Business Research (CEBR) on the economic value of public investment in arts and culture.
This wide-ranging report looks at the impact of the arts on society in a number of different ways, some more easily quantifiable than others. It concludes that businesses in the UK arts and culture sectors contributed approximately £5.9 billion gross value added (GVA—GDP with taxes paid added and subsidies deducted to give a truer value of total contribution to the economy) which has grown since 2008 despite the turnover of those same businesses shrinking by 3.5 per cent. Earned income is still the largest source of revenue over subsidy and charitable donations.
The industry employs nearly half a per cent of the UK workforce, nearly a third of which are employed in the performing arts, paying 5 per cent more than the median UK salary, but every £1 paid in salary generates £2.01 in the wider economy. The report also argues that the proximity of cultural activities can result in higher wages and productivity and has a positive impact on house prices, stating, "being located in an area with twice the average level of cultural density could be associated with an average £26,817 increment on the value of housing".
Tourism always plays a large part in any economic arguments for the arts; here CEBR estimates the total spending of visitors to the UK that can directly be related to the arts to be £856 million. Conversely, British cultural institutions can produce a flow of income from abroad, examples given including the Natural History Museum's exhibitions that have been seen in 65 countries, small Newcastle gallery Vane's showcases of British art at trade shows in New York and the National Theatre production War Horse's successful runs in New York and Toronto plus tours of Germany and Australia.
The impact of the subsidised sector on commercial organisations is investigated in many different ways, from placements for graduates and other professional training provided by nearly three quarters of ACE-funded organisations to mentoring and business support to creative inspiration, such as the fact that many fashion designers draw on the archives of the Victoria and Albert Museum for inspiration. Local investment in the arts can see an impact on the local economy as a whole, such as Liverpool's Capital of Culture in 2008 increasing the number of creative businesses located in the city by 8 per cent, with similar impacts on Margate following the opening of the Turner Contemporary Gallery and through the Newcastle-Gateshead cultural development project.
The report also strays into the area of education, in the wake of criticism of Education Minister Michael Gove for not including arts subjects in the various incarnations of his plans for reforming the education system. The report states that "Continual innovation and creativity in knowledge‐intensive activities are imperative to maintain growth", but admits that such things are difficult to measure. It also stresses the important contributions made to research projects with higher education institutions.
Also difficult to measure in economic terms but with observable benefits in some cases is the role of the arts in "improving wellbeing", with examples given of reducing anxiety in cardiac patients, improving employability of the long-term unemployed and work with young and disabled people.
ACE Chief Executive Alan Davey said, "With this report we can confidently confirm the impressive scale of the arts and culture industry and its distinctive strengths and contribution. It is an undeniably vibrant sector with strong links to the wider economy and a key part of our economic future.
"The next step must be to consider how the UK can capitalise these strengths. We need to ensure Government can speak with one voice to the arts and culture industries in regards to tourism, exports, our Industrial Strategy and the education system, as well as having a clear sense of its true value, and that this value beyond its GVA is properly woven into policy."