Bringing the curtain down on state-funded culture?

By Lucy Phillips

11 August 2010

As the public deficit grows, so do grumbles about arts subsidies – and the culture secretary has been dutifully wielding the axe. So what does the future hold for the UK’s museums, galleries and theatres?

A chill was sent through the arts world as soon as the Conservative-led coalition came to power. Labour has traditionally been more generous to the sector and before the election there had been much Tory talk of encouraging greater private philanthropy.

And last month the prospects for theatres, museums, galleries and many more artistic institutions up and down the country took a turn for the worse. Staffing cuts of up to 50% were mooted at the Department for Culture, Media and Sport, along with a move to smaller, shared premises.

This followed the axing of swathes of the department’s quangos, including the UK FilmCouncil and the Museums, Libraries &Archives Council.

Culture Secretary Jeremy Hunt stressed the role of private sponsorship. ‘We will create a culture of giving, so that more of us have a connection with the things we care about... I want our major cultural institutions to be freed from government control so they can raise more money and spend it as they see fit,’ he said in the DCMS’s July structural reform plan.

Such proposals have also raised the age-old debate about whether the arts should receive any public subsidy at all. Currently just over half the income received by the sector comes from the public purse, but in the context of an unprecedented squeeze in public spending, the DCMS – which has one of the smallest departmental budgets at £2.1bn a year – looks increasingly vulnerable. 

Martin Smith, former chair of London’s Young Vic theatre, tells Public Finance that many of the country’s national arts organisations could probably absorb hits of 10%–15% to their budgets, but anything more than that would be ‘disastrous’. In such an event, support for new and cutting-edge projects would be the first to go, he claims, because they tend to be funded from discretionary spending. This would make it far harder to replace public funds with corporate sponsorship, ‘sabotaging’ the government’s own objectives.

‘Cuts of 40%–50% would be self-defeating because it would stop these organisations from being able to deliver the very new work that is attractive to private sponsors,’ he says. There would also be a ‘disproportionately damaging’ effect on English regions such as the Northwest, Northeast and West Midlands, where private philanthropy is already much less common than in the capital.

Smith, who is now managing director of West Bridge Consulting and policy adviser to Ingenious Media, is the author of Artsfunding in a cooler climate. This report called for a new Office of Cultural Economics to help the arts sector better make its case for public subsidy. The body would be funded on a joint public/private basis and would create and collate evidence on the impact of the arts on the UK economy.

Smith believes ‘there is no doubt’ that the wider creative sector, which employs just under 2 million people and accounts for 6.2% of the economy as a whole, would be damaged if public funding to the arts and heritage sector were cut to the extent that has been suggested.

‘I do not propose that money should be spent on the arts when money is going to be taken away from schools and hospitals… My plea is simply that cuts should not be made on the basis of arbitrary arithmetic without an attempt to understand the consequences,’ he adds.

But as the public deficit grows, arguments against public subsidy for the arts are gathering pace. Free-market thinkers have long asserted that the system is bureaucratic, inefficient and politicised, unequal between regions and focused mainly on those who could afford to attend such activities without taxpayer help.

Tom Clougherty, executive director of the Adam Smith Institute, tells PF that ‘government should not really be poking around’ in arts funding even during the best of times. ‘Going beyond that and looking at the state we are in at the moment, it’s pretty clear that the government should not just be cutting a little bit here and there. We have run out of money so it needs to look at what things we should not be doing at all – and arts funding should come pretty high up that list.’

The same goes for council-run museums and arts activities, according to Clougherty. ‘There’s a general principle that it’s not the proper thing for local authorities to be doing and that they should focus on the things that are absolutely necessary, not things which offer the least bang for their buck and help the least people,’ he says, admitting that ‘casualties are inevitable’.

An alternative model would be based on charging people more and encouraging private donors. ‘Experience in the US is that they get vast amounts of private financing rather than relying on public funding. The more something is publicly subsidised, the less private sponsorship we get because people think the government is doing it already,’ he says.

In a more welcome move to those supporting public subsidy for the arts, the government has pledged to ‘return the National Lottery to its original good causes of art, sport, heritage and the voluntary sector’, with arts and heritage eventually expected to benefit from £50m extra a year.

Smith gives a tentative welcome to the changes. Lottery money has been mainly restricted to capital projects and refurbishments, but in the current climate it would only be of value if it could be used to support everyday operations, particularly in newly built venues that are expensive to run, he says.

‘The splendid new cultural establishments that we have obtained as a result of the Lottery are at risk of being mothballed unless some of the money returned to the arts can be used to pay salaries and wages,’ Smith adds.

All departments have been asked by the chancellor to plan for cuts of up to 40% and the DCMS is quick to point out that final decisions are yet to be made. By proposing an early settlement, Jeremy Hunt has earned a place in the government’s ‘star chamber’ of ministers, set up by the Treasury to scrutinise other department’s spending.

We have yet to see what influence he has gained. But, whatever happens, the cuts won’t be met lying down by a public accustomed to low-priced theatre tickets and free entry to museums and galleries, or by those who make a living out of spectacles and song and dance.