Do arts venues in the UK need public funding?

Read J.J. Charlesworth's column, from the September 2013 issue

It’s June, it’s summer (sort of), it’s time for another government comprehensive spending review – and another instalment of the phoney war being waged between government and the arts sector over funding cuts to the arts. As the Conservative government (with a bit of help from their Liberal Democrat coalition buddies) gnaws away at the fiscal deficit with little or no sense of where they’re headed, making cuts to welfare, healthcare and much else, the funded arts sector has also been feeling the pinch. 

In June, the government announced further cuts to the Department for Culture, Media & Sport (DCMS), and its client body, Arts Council England (ACE). As it turned out, the DCMS was hit with a cut of eight percent, with ace having to cope with a five percent cut in its grant from 2015. Now, much as this will put further pressure on core funding for the Arts Council’s client organisations (its ‘national portfolio organisations’, or NPOS), this is not the end of the world.

As ACE’s core funding declines, its duty to dish out the lottery loot effectively drives the government’s agenda of reinventing arts venues as private-sector organisations

But the story of these latest cuts, and the noisy but predictable PR campaign against them conducted by ACE during the spring, is becoming increasingly unreal, given the peculiar shift taking place in ACE funding. As noted previously in this column, while ACE’s core government grant has fallen since the Tories took over, its share of proceeds from the National Lottery just keeps going up.

In 2009/10, ace’s government grant was £453 million, while its share of lottery revenue was £172m. By 2011/12, following the first government cuts, its grant fell to £394m, but its lottery funds had grown to £210m. And while ACE’s core funding continues to fall – £360m in 2012/13 – lottery revenue has exploded. Interim figures suggest that ACE will receive around £270m from the lottery in the same period. In other words, ACE has more money to hand out today than four years ago.

Of course, lottery revenues are unpredictable (although projections suggest a continued upward trend); in a recession, however, it seems that people are eager to gamble their way out of austerity. And ACE is in the odd position of complaining about cuts while having to hand out more cash. But because lottery funding cannot be used as a substitute for normal government spending, due to the principle of ‘additionality’ established when the lottery was set up, it has to fund activities that are supplementary to ace’s core funding.

As lottery money has grown, ACE’s various strategic funding initiatives have become more significant, through schemes designed to develop arts organisations’ ‘resilience’ and ‘sustainability’ – with the intention of making NPOS increasingly less dependent on state funding, and therefore realise the government’s vision of a privately funded arts sector. 

The last year has seen announcements of £50m in capital funding, £7m for the ‘capacity-building’ Catalyst Art scheme, £30m of match-funded grants to found endowment funds and, among other schemes, £500,000 to support young musicians in developing their careers in the pop industry – an odd incursion into commercial culture that may indicate a degree of confusion at ACE about what its role in supporting ‘the arts’ actually is.

ACE, perhaps, protests too much. While it makes all the right noises against cuts to core funding, it is doing the government’s bidding by preparing organisations for the brave new world of patrons, private philanthropists and corporate sponsorship. Ideologically, anyway, ACE long ago seems to have gone soft on the idea that funding activities that might not survive in the market was a principle worth defending – a principle, ironically, on which the Arts Council was founded. 

In practice, the corporatisation of the NPO sector is resulting in the concentration of resources among a predictable roster of trusted, institutionally well-connected venues: £3m of endowment funds to the already heavily corporate Serpentine Gallery and £1m to the Whitechapel, with Catalyst funding turning up for respectable outfits such as Camden Arts Centre, the South London Gallery, the Chisenhale Gallery and so on.

Maybe arts venues don’t need public funding. This is, after all, a question of political principle. As ACE’s core funding declines, its duty to dish out the lottery loot effectively drives the government’s agenda of reinventing arts venues as private-sector organisations of a certain scale and character, however much it complains to the contrary. 

Choices are made, and that lottery funding could just as easily be directed to a greater support of small-scale, temporary projects and commissions, even venues – precisely the grassroots, artist-driven activity that has withered as the economy of small commercial galleries has succumbed to the recession. But that is a possibility ACE seems unwilling, or incapable, of imagining: between 2008 and 2011, Grants for the Arts (GfA), the small-scale, open-application grants, fell from £67m to £51m, only bouncing back to £68m in 2012. But on closer inspection, as a share of total lottery revenue, GfA dwindled from 46 percent of funds in 2008/09 to not even a third of lottery funding in 2012. Small may be beautiful, but for the moment, biggest is best.

This article was first published in the September 2013 issue.