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Arts and Cultural Organisations

Volume 752: debated on Wednesday 12 February 2014

Question for Short Debate

Asked by

To ask Her Majesty’s Government what plans they have to help arts and cultural organisations thrive in the current financial landscape.

My Lords, the arts are currently facing two significant challenges: first, cuts to arts education in schools; and, secondly, cuts in funding, especially from local authorities. This difficult financial landscape within which arts and cultural organisations now sit is seen by some as an irresolvable crisis. For others, however, there are opportunities to create more innovative and entrepreneurial approaches that can enhance and expand arts and culture. I would like to suggest that a new, more entrepreneurial approach is now essential if many arts organisations are to survive and thrive. Worryingly, the evidence suggests that this is not happening at either the pace or scale that it needs to. We must ask ourselves why.

Numerous evaluations demonstrate that the arts have a profound impact, especially on disadvantaged children. I know this first-hand from 30 years of work in east London, where the largest artistic community outside New York lives. I have worked with many talented artists and musicians over the years, developing successful projects and business start-ups with local children and residents in some of the poorest housing estates in this country. Arts organisations are essential to the well-being of our society, and let us not forget that the arts and culture industry is also central to our economy’s well-being. In 2007, the cultural and creative industries accounted for 7.3% of the overall economy of this country—comparable in size to the financial services industry. I and many colleagues working in the arts believe that a vibrant arts and cultural sector relies on a mixed economy and that intelligent public investment is a part of that mix. As the economy shows signs of recovery, I hope that the Government will prudently adopt a long-term approach and constantly review public support of the arts.

What of the present? The majority of arts organisations across this country are struggling to adapt to the Government’s cuts in statutory funding, especially at the local authority level. The Government urgently need to do more to encourage and support arts organisations to think as creatively about their business models as they do about their art. One of the most significant changes in our society over the past 30 years is the rise of the wealthy individual. We are told that 1% of the population now pay one-third of all income tax, yet 40% of the cultural and creative industries receive no private investment. While larger organisations such as the Royal Opera House and the National Theatre, which also receive the largest amounts of subsidy, are successfully cultivating high net-worth donors, smaller arts organisations often do not have the infrastructure to attract this type of donor. They also understandably feel that they do not have a product that is high profile enough for large donors to be interested in.

I understand that one of Baroness Thatcher’s regrets was that the increase in personal wealth during her time in office did not translate into an increase in giving. We all know that the story is very different in the US. It seems that few British arts organisations have the practical knowledge to harness opportunities, such as social investing, to rethink or enhance their business models. We must help them to broaden their appeal beyond trusts, foundations, government and big business to focus on coming up with innovative ways to encourage individuals to support arts and culture, through both philanthropy and social investment.

It has consistently been my experience that individuals involved in building practical projects speak far more effectively on our key social and economic issues than many of our politicians and so-called experts. Perhaps, then, the way to part-address our current cultural crises is to raise the profile and disseminate the practice of arts organisations that have been successful in taking entrepreneurial approaches to diversify their income base. They include organisations such as the Derby Theatre, partnering with the University of Derby as a live venue and training centre; the Albany in south-east London, which bids for contracted services and is now running the library; and the Live Theatre Company in Newcastle, which uses innovative development of capital assets to provide sustainable income streams. These organisations are bucking the trend and taking on board a more entrepreneurial approach.

I am proud to have been recently involved in one such innovative arts project—the Conservatoire in Blackheath, south-east London, and here I declare an interest as chairman of the trustees. I thought that it might be helpful if I shared with the House the journey that this organisation has undertaken during the past year, the lessons we have learnt and the key practical outcomes that we have delivered. I was asked to chair the Conservatoire in Blackheath 14 months ago. This arts charity was founded in south-east London in 1881 and is the city’s oldest multi-arts venue, offering music and art lessons to local children and adults. Each week, around 100 talented tutors teach music and art to more than 1,600 people, ranging in age from six months to 90 years.

In January 2013, the Conservatoire was a week away from handing over its keys to the bank that financed it. Its core business model was unsustainable: the margins on music lessons did not cover the costs, the buildings were neglected and cash flow was critical. The organisation was facing foreclosure and staff and tutors had faced empty pay packets before Christmas. Most organisations would have folded, but the Conservatoire was fortunate. It had a new CEO—an American social entrepreneur called Sydney Thornbury, who invited me to take the helm and bring in a new group of experienced trustees. We entrepreneurs saw the problem as an opportunity for fresh thinking.

Our ambitious plan focused on creating a sustainable business model for the new financial landscape. It included forging a crucial strategic partnership with City Lit, Europe’s leading provider of adult education, and bringing together an American pyramid fundraising model to raise the £175,000 of bridge funding that we needed to get from the old model to the new. In just six weeks, the fundraising campaign smashed its target, raising a total of £220,000. Donors included an angel donor, who gave an incredible £25,000, as well as local children who donated their pocket money. Money quite clearly followed ideas and commitment. The fundraising campaign enabled the Conservatoire to embark on an ambitious plan of building works, renovation and development.

The Conservatoire has positioned itself back in the heart of its community. The community came together in an extraordinary display of support to save the Conservatoire. Now, the Conservatoire can once again successfully serve its community because our strategic plan has provided us with both a long-term sustainable income model and a major enhancement of the organisation’s offer for the community. The new vision positions the Conservatoire as a dynamic arts organisation reaching people from a cross-section of the community through both its paid classes and large-scale social impact projects.

Our plans do not stop there: we are thinking ahead. With the first phase of City Lit classes successfully up and running, the Conservatoire is now embarking on raising the money needed to launch phase two of the plan. This will see the development of the final two studios that are necessary to fulfil its sustainable income model and enable 300 additional classes to run, bringing the organisation to self-sufficiency and beyond. The Conservatoire will source these funds through both traditional fundraising and social investment loans from individuals who want to take advantage of the Government’s new tax incentives for social investing.

The best way to find new and enhanced national models of fundraising for the arts is, first, to demonstrate new thinking locally. The Conservatoire is still navigating deep waters but we hope, in time, to connect our pioneering model to the wider legacy developments to the north in the Lower Lea Valley. This development will, it is hoped, inspire a more creative and entrepreneurial rethink of arts funding nationally.

However, if we are to help the arts sector to survive and learn not just from this project but from the other entrepreneurial projects mentioned previously, the Government need to join in the grown-up, challenging and even radical conversation that we are initiating. How does the sector revolutionise and enhance funding models for sustainability in the “new normal”? This is a particularly important conversation to be had at local authority level, and we want to work closely with the LGA.

Peter Bazalgette, the chairman of Arts Council England, said recently:

“If you can find a way of getting the arts and culture, local government, business and higher education to work together then you have something really powerful”.

I think that he is right, but how do we translate these fine words into reality? First, government needs to value practical people. Civil servants often think their way into action; entrepreneurs are about learning by doing and acting their way into thinking. Let us value, support and publicly recognise pioneers in the arts sector. Secondly, government needs to actively enable an entrepreneurial culture to flourish. The Government’s new tax breaks on social investing, which the Conservatoire plans to put to use in April this year, will do much to develop a vibrant social finance sector. But far more practical support needs to be given to arts organisations if they are successfully to learn to operate in an enterprise economy.

I can see that my time is up. I will sit down with the Minister privately and suggest some practical ways in which we might do this.

My Lords, I am sure that we are all grateful to the noble Lord, Lord Mawson, for introducing this debate, and I am sure that we all wish him well with his plans for this conservatoire. I would just say to him, and indeed to my noble friend the Minister, that if they take the trouble to go to the Library and to dust down the unanimous report of the Select Committee on Education, Science and the Arts, published in another place in 1983, they will find many recommendations which the Government could still profitably benefit from. I was much involved with that report and had the honour of chairing most of the committee sittings that led up to it. I suggest both to the noble Lord, Lord Mawson, and to my noble friend that it is worth looking at.

In a brief debate like this I just want to concentrate my remarks on one particular thing. People whose lives are enriched by the arts, as they are, and people who come to this country and enrich it because of our arts and our heritage are all, I think, very moved by some of our greatest buildings. One thinks of the great public buildings in London but I think particularly of the cathedrals and parish churches of this country. I say to my noble friend that I am one of those who is very concerned by recent proposed changes in English Heritage. I completely understand why the Government have decided that they want to divide English Heritage and give it an endowment to look after the buildings under its own control—there are some very fine and marvellous buildings—and why they wish to have another branch, probably to be called Historic England, which will give all the technical advice and support and be in charge of listing and all the rest of it. But there is a potential catastrophe in this change because English Heritage’s powers to give grants to buildings which it does not itself possess will have gone.

I have the great good fortune of living in the wonderful city of Lincoln, which has—I do not want to be provocative or divisive—what I consider to be the finest of all our cathedrals, but what everybody, I think, would agree is one of our greatest cathedrals. It costs £50,000 a week to keep Lincoln Cathedral open, without a penny being spent on restoration or maintenance. Over recent years Lincoln Cathedral has been able to look to English Heritage, which is extremely generous and helpful and has given £250,000 most years. That has now gone. There is a real problem, and that problem can be repeated up and down the country. Some people might ask, “What about the Heritage Lottery Fund?”. That is a wonderful organisation and we in Lincoln are benefiting from it at the moment in that we have had a grant of £12 million towards a project called Lincoln Castle Revealed.

However, the Heritage Lottery Fund has its criteria, which include inclusiveness and how many people come and what sort of people. I do not quarrel with that at all. But what I do say is that there has to be a source of funds directed to buildings for their intrinsic beauty, worth and historic interest. That source used to be English Heritage; it will be no more. I believe that, in the case of our great historic cathedrals—we have 27 truly important medieval cathedrals in this country, and there are 42 in all—we ought to have a separate endowment fund, similar to the endowment fund that the Government are giving to English Heritage for its own purposes, to sustain our cathedrals. Any country that allowed the west front of Wells or Lincoln, the spire of Salisbury, the tower of Durham or any of our great edifices to be in danger of collapse could not begin to call itself civilised, or claim that it had a proper Government of a civilised country.

I know that the present Government would never wish to be in that position, but what I would say to my noble friend who is to reply to the debate is this. We have to recognise that these buildings are of incomparable worth, where one comes perhaps closer to the soul of our nation than anywhere else. They demand and cry out for the sort of support that is not currently being given but that will need to be given in the future.

My Lords, I sit as a trustee on a number of organisations involved in the arts, and they are all recorded in the register. I am also a working filmmaker. I feel that it is necessary to declare to the House that I am married to a writer who has been most vigorous in his campaign against cuts to the arts and libraries in his home town of Newcastle.

In April of last year, the Culture Secretary, the right honourable Maria Miller MP, told us:

“When times are tough and money is tight, our focus must be on culture’s economic impact”.

Although she acknowledged that this argument would not be to “everyone’s taste”, she did call for all of us to accept this “fundamental premise”. Ironically, my own discipline of film is something of a poster child for those who believe that the value of an art form can be measured by the wealth it produces, having contributed £4.6 billion to the UK economy in 2011 and a wealth of provocative, engaging and beautiful moving image. But while it is easy to quantify art that successfully makes an economic impact, it is harder to account for the delicate ecosystem which allows that success to flourish. A spreadsheet tells only part of the story.

The insistence on an arts sector measured in economic outputs creates a bias towards certain kinds of art, a bias towards the capital, and a bias towards large, well funded institutions which leaves the vast majority of the arts and practitioners of the arts behind. The November 2013 report, Rebalancing our Cultural Capital, illustrates in great detail the growing gap in arts spend outside London over the past two decades. Further work by the same authors shows that just four institutions in the capital receive more lottery funding than do the 33 local authorities, home to 6 million people, at the bottom of the list. These local authorities are predominantly although not exclusively in the north, but they all cover areas that are already challenged by other symptoms of deprivation and where current and prospective local authority cuts are biting most deeply. The Joseph Rowntree Foundation predicts that local authorities will have to cut any services they have no legal obligation to provide. I think we all know that local authority funding is disproportionately important to the artistic community outside the capital.

London benefits not only from a disproportionate amount of lottery funding, it receives the greatest proportion of public investment in other ways and attracts the lion’s share of business sponsorship and private philanthropy. I would vigorously assert the need for world-class arts organisations in the capital, but we must consider how to protect and deliver the same values and benefits to citizens elsewhere. Many of them are major contributors to the lottery through the purchase of tickets, but they suffer a measurable deficit of benefit.

Sir Nicholas Hytner, at the end of what was considered to be a triumphant decade as artistic director at the National Theatre, wrote very movingly in the Daily Telegraph of the importance of “innovation”, and the vital role of government subsidy in that innovation, rather than the role of sponsorship and philanthropy—about which he also has much to say and much to be grateful for. What starts as an experiment in the National Theatre studio so often ends up in the West End. London West End theatre brought in more than half a billion pounds in 2012 alone.

Just as the National Theatre feeds the West End, the National itself relies on an ecosystem where talent is nurtured in regional theatres all over the UK. For decades, the artistic directors of the National Theatre, the Royal Shakespeare Company and many other of our great theatres—and the greatest proportion of their creative contributors—have honed their skills in regional theatre. What we fund now, in all corners of the UK, will create the practitioners and aesthetic of the future—a vibrant and ever changing aesthetic that has made our theatre envied and loved the world over. Starving the ecosystem of the tiny, the local, the experimental, the site-specific and the amateur groups, or insisting that this same list become little businesses, will simply kill the juggernaut of British theatre which has conquered Broadway and beyond. This ecosystem, mirrored in dance, in music, in the visual and voluntary arts, in the digital arts and other performing arts, has palpable effects on other industries, from tourism to tech. Talent is not centred in London; appreciation is not centred in London; the need to see oneself reflected in our world is not centred in London.

I want to ask the Minister just these questions. Since Her Majesty’s Government have placed great emphasis on sponsorship and philanthropy, what steps will they take to protect the small, the experimental and the regional arts institutions that are traditionally of so little interest to commercial sponsors? How would the Minister suggest that the communities that contribute most to lottery funds ensure that they benefit proportionally from their distribution? Given the enormous cuts to local authority funding at a time when their duties have increased and their efficiency savings are largely complete, could not Her Majesty’s Government consider making arts funding a legal requirement of local authorities and provide the resources to support that requirement, in order that we do not decimate arts provision outside the golden circle of the M25 and, in doing so, deprive ourselves of the artists and art of the future?

My Lords, I am grateful to the noble Lord, Lord Mawson, for securing this debate and I pay tribute to the wonderful work that he has done in this area over many years, as I do to the noble Baroness, Lady Kidron, who has similarly done wonderful work. I claim no particular expertise, although I am passionate about the arts—perhaps that is something to do with the fact that it is sometimes said that many clergy are failed actors.

It is fortuitous that this debate is happening on the day of the launch of a study, report and review by the British Academy, Prospering Wisely: How the Humanities and Social Sciences Enrich our Lives. That report makes it clear that this country’s exemplary record in taking seriously these disciplines and the arts and learning from them is one of the major factors which make it as civilised as it is. They hold up a mirror to society and enable us to reflect on what makes for a good life and a healthy society. The same is true of the arts in general. In an age when the triumph of utilitarianism and consumerism sometimes seems to me to be almost complete, we need to remember that phrase, “prospering wisely”, which comes from King Alfred the Great.

However, there are real difficulties, as has been suggested, particularly in the provinces. Worcester boasts a wonderful arts organisation, Worcester Live, which is entrepreneurial in just the way that has been commended, but it is labouring under very difficult conditions because the green shoots of recovery have not yet found their way into people’s pockets. At the same time, county council funding has been reduced by 90% and there is no Arts Council funding, which, as been pointed out, tends to go to flagship venues. That is a matter of real concern. I suggest that one way to ease the situation would be for the Government to consider the distribution of lottery funding, which used to be much easier to apply for and broader in its remit.

There is good news in the midst of this era of financial stringency. The city of Worcester has at its centre a wonderful, imaginative new development entitled The Hive, which is a joint venture by the city council and the University of Worcester. They have together built The Hive, a library. The fact that they are working together in just the sort of partnership that has been commended is of great benefit to both the city and university in terms of availability of publications, opening hours and sharing of costs. It is an example of the imaginative partnership that should be encouraged elsewhere. At the same time, partly through the generosity of a local benefactor, there is an exciting plan soon to turn a part of the old porcelain factory into a state-of-the-art arts centre, so that Worcester’s fine artistic tradition can be developed yet further.

As the noble Lord, Lord Cormack, made clear, churches and cathedrals are at the centre of our cultural heritage and make an enormous contribution to the ongoing cultural and artistic life of this country. That is very much true of Worcester, which will be holding the Three Choirs festival again this year.

Despite all the pressures that exist on funding, I hope that, as a result of this debate, the Government will consider some of the suggestions that have already been proffered in order to do everything possible to encourage the arts and culture: in particular, by facilitating philanthropy, which has benefited us very greatly in Worcester, although it is still not as well developed as it might be; by enabling the sort of imaginative partnerships to which reference has been made during the course of the debate; and by looking again at how lottery funding is distributed.

Finally, as the noble Lord, Lord Cormack, suggested, the Government should recognise that cathedrals and churches stand at the very heart of our cultural heritage and, as he put it so beautifully, reflect the soul of this country. They receive no direct government funding at the moment. The parish churches of our country, a wonderful gem, are looked after and maintained by small numbers of worshippers. It would be good if the Government recognised the importance of those buildings to our culture, in the way that the noble Lord suggested, by thinking again about what is happening with English Heritage. They are everyone’s heritage. It is to our benefit as a nation that they should be maintained and developed.

My Lords, at the latest Performers’ Alliance All-Party Parliamentary Group meeting last month, we heard a presentation of the second Delphi study, In Battalions, by Fin Kennedy and Helen Campbell Pickford. I came away from that presentation with three concerns in particular. The first is the key question they identified from discussion with those working in theatre: in what ways can theatre-makers, theatres and the Arts Council work together to help to protect risk-taking on new work and new talent, without creating significant expense?

The second concern which became clear was that the arts organisation most at risk is the organisation of one, the playwright, the individual artist who, if not wholly, certainly significantly provides the raison d’être for the existence of the larger arts organisations, the theatres and companies which facilitate new work. That is after acknowledging that there is much collaborative work within the theatre, as within the arts as a whole. If that crucial individual risk-taking and experimentation is not nurtured, the arts will not progress but stagnate.

At the same event, we heard presentations from Giles Croft, artistic director of the Nottingham Playhouse, and from Elizabeth Newman, associate director of the Bolton Octagon. The message that rang out loud and clear was how increasingly difficult and time-consuming it is to try to balance the books and bring through new work, rather than rely on tried and tested productions.

My third concern is that it is entirely clear to those working in the arts, if not to the Government, that there is no substitute for public funding. Nothing really replaces what it achieves. Arts organisations are being told to “adapt”, a euphemism for becoming more commercial so that they may survive, but that change means that the very thing that made them worth while in the first place is in danger of being lost. This potential loss of risk-taking, entirely due to a lack of funding, becomes a more critical problem the further away we go from London.

In the year since the regional debate on the arts introduced by the noble Baroness, Lady Quin, much has already changed. We have had the report Rebalancing Our Cultural Capital, mentioned by noble Baroness, Lady Kidron, showing that public spending on the arts is now 15 times greater in London than in the regions. Indeed, the Nottingham Playhouse, which is facing a possible 100% cut in grant from the local council, is located in the East Midlands region, which this report identifies as being the most affected. The devastating Local Government Association report of 2012 is now joined by last year’s equally devastating Joseph Rowntree Foundation study, which predicts that arts and cultural funding by local councils may fall within a few years to almost nothing, and in December we had further local authority funding cuts.

In the short term, I am pessimistic about the discrepancy of funding between London and the regions. The discrepancy is increasing mainly because public funding is being cut—local authority funding, of course, but also the decreased reserves of core funding that will inevitably be hoovered up by London and the bigger institutions. Things will not change substantially until two things happen: first, the funding cuts are reversed and, secondly, the regions and the regional cities obtain greater autonomy, because arts and culture will follow political power. In this sense, of course, the arts are in the same boat as every other area of government subsidy. The regions need to be making their own funding decisions for their own arts production as well as services, and they need to have the money to do so. In addition, a future Government must bring in statutory provision for the arts.

We have a Government who are interested in the arts and creative industries as an export product and for tourism, but are less interested in how the arts are nurtured and produced. I ask the Minister whether the DCMS could take a careful look at the composition of the Creative Industries Council, which helps to formulate policy and which has both a strong global and London-centric feel. It looks outwards but it does not back inwards towards arts production across the whole of the UK. There is no sense of that geography, and that is important.

My other question for the Minister is the same one that I posed to the noble Lord, Lord Nash, at Question Time today. How important do the Government think arts education in schools is as a pipeline into the creative industries, which we hear are now worth £8 million an hour to the UK economy? If the Government think that it is important then the DCMS should be concerned at the continuing fall in the take-up of art and design subjects in schools, as well as the threat that exists to arts higher education.

My Lords, my noble friend Lord Mawson has done well to give arts and culture a brief look-in before we rise for the Recess. I shall focus on classical music but it is clear from the debate so far that many of the issues are widely shared across the cultural sector. Two weeks ago the Times had an article headlined, “Orchestras gain fans but lose money”, based on a recent survey by the Association of British Orchestras. This highlighted concerns that real-terms reductions in funding could lead to UK orchestras losing their place in the top flight internationally.

One of the strengths of the UK arts funding model is that it is based on a mix of funding sources. Public funding, from national bodies such as the Arts Council and the National Lottery as well as from local authorities, is a vital part of the mix, representing over one-third of orchestras’ income, but it is supplemented by private contributions—almost 20% of the total—while nearly half of orchestras’ income is earned through ticket sales and other commercial activities. In the current financial landscape, all these funding sources are under pressure: Arts Council funding is declining, but not as sharply as that of many local authorities; ticket income is down, despite rising audiences; and business support is flat at best. Individual philanthropy shows a welcome increase, but is not nearly enough to begin to replace public funds, is concentrated in London much more than in the regions and is often focused on specific projects rather than on core funding.

In preparing for this debate, I have heard about challenges facing virtually all music organisations and activities. There are concerns about the future funding of music education and the delivery of the national plan for music education. The quality of the training provided by the UK’s leading music conservatoires is a key factor in creating and sustaining the UK’s international success in all forms of music. This depends heavily on the premium funding they receive to help cover the shortfall between the tuition fees that they can charge their students and the actual cost of providing that individual, intensive, one-on-one tuition, which can be up to £15,000 or £17,000.This funding has not yet been confirmed for 2014-15.

Specialist training bodies, such as the National Opera Studio, of which I am a modest supporter, depend on the availability of funding and support to develop the talents of young performers with the potential to become the leading artists of their generation. The music sector generally is concerned at the possible impact of planned copyright exceptions, representing a potential shift of value away from content creators, without corresponding compensation or benefits.

I recognise that the Government share the desire to support the creative sector, and also that it would be unrealistic to expect substantial extra funding for music and other art forms from either central or local government at present. I therefore hope that the Minister will look into other ways of easing some of the pressures on music organisations. First, everything possible should be done to protect the existing level of public funding for music and arts organisations, including from local authorities, where the challenges may be greatest. I was hugely impressed by a recent visit to High House Production Park in Purfleet, where the Royal Opera House is working in partnership with other creative sector bodies and Thurrock Borough Council to plan and deliver an ambitious cultural entitlement agenda for the borough, including a scenery workshop, a planned costume centre, a training centre offering creative sector apprenticeships, artists’ studios and more. What can the Minister do to encourage more such initiatives?

Conservatoires could be helped to plan ahead with greater confidence by giving them some reassurance about the continuation of the exceptional funding they receive, preferably for more than one year ahead. Young artists undergoing training should be eligible for schemes to promote skills development and employment of young people, perhaps by extending the Arts Council’s well regarded Creative Employment Programme to support more initiatives such as the UK Music Skills Academy. I applaud the Government’s desire to promote individual philanthropy, but there is surely scope for further encouragement and incentives, such as extending gift aid on admissions to include arts charities.

Creative content providers must get a fair deal from copyright exceptions. Young people interested in the creative sector need to be made aware of the importance of intellectual property issues. The Intellectual Property Office, in partnership with UK Music, has just launched an app, Music Inc, aimed at 14 to 18 year-olds for this very purpose. What can the Minister do to encourage take-up by schools?

I also strongly support my noble friend Lord Mawson’s plea, echoed by my noble friend Lord Clancarty, for the Government to help the music sector apply its own creative and entrepreneurial skills to expand its sources of support, for example through crowdfunding or social media-based initiatives.

Music and the arts represent a huge and valuable asset to the UK. Of course money is tight, but with the vast array of talent available among our musicians, schools, conservatoires, training bodies, orchestras and opera companies, and the goodwill and support of government at all levels, and of all of us who are passionate about the arts, the UK can surely continue to lead the world in the range, quality and sheer brilliance of its music and cultural organisations, to our enormous cultural and economic benefit.

My Lords, I am grateful to the noble Lord for tabling this debate today and pay tribute to his ground-breaking work as a social entrepreneur. I also thank all other noble Lords who have spoken in this debate today. I apologise if I do not, in the short time available, pick up all the points that have been made.

It is a topical and challenging question: to what extent should government subsidise the arts and to what extent should they be expected to stand alone? It is impossible to address this without taking stock of the current arts-funding landscape, as a number of noble Lords have already done today.

First, we have to acknowledge the backdrop to this debate, which is that of course the arts make a substantial economic contribution to this country. They make Britain an attractive place to visit, to live, and to invest in. The noble Baroness, Lady Kidron, made a good point about the delicate ecosystem that underpins this arrangement. It is not just about economic advantage. A whole range of other advantages come from our thriving arts culture, including improvements to the nation’s health and well-being and the provision of a critical impetus for regional economic regeneration around the country.

However, there is a real danger that we are taking this global advantage for granted rather than investing in and nurturing the next generation of creative performers and leaders. Nowhere is that complacency starker than in the sidelining of arts subjects in the national curriculum, which this House has debated on a number of occasions. Those subjects are being systematically dropped by ambitious schools that want to be seen to be performing well and moving up the league tables. As a result, the take-up of GCSEs in subjects like music, art and drama is falling. That is combined with a squeeze on funding for specialist teachers in schools and the failure of alternative initiatives such as the community music hubs to take off in a systematic way.

As a number of noble Lords have already argued, this neglect of the arts in schools is exacerbated by the funding pressures on local community and regional arts centres. Those are the places where young people get their first real taste of watching or participating in live events. They can inspire and thrill, sowing the seeds of a lifelong love of the arts in young people—and in those places we find the risk takers and innovators of the future.

However, local councils are increasingly being forced to prioritise their limited spending on the statutory services for which they are responsible. Therefore, even though many of them understand the importance of the arts as having value in themselves and also playing a role in attracting businesses and visitors, the burden of the 33% cuts takes an inevitable toll on the local cultural life they are able to fund. The Arts Council has repeatedly made the point that it cannot be expected to plug the hole in local government arts expenditure. In any case how could it, when its own grant from central government has faced substantial cuts—reduced by 30% in one year alone?

Sadly, therefore, the picture on the ground of local and regional art centres is of retreat and decline, with many places losing the skills and expertise necessary to find new sources of funding such as new sponsors, grants or earned income. Therefore when the noble Lord, Lord Mawson, challenges us to find new ways to help fund arts organisations, my answer is that he is right to pose the question, but the prerequisite must be a greater recognition across government of the centrality of the arts to our nation’s success, both now and in the future. That cross-government challenge is not being addressed appropriately by the Government at this time. Perhaps the Minister can address that in his response.

What is lacking is a sustainable funding model that has buy-in from all sectors. It should include a statutory provision for national and local government and a new definition of the role of arm’s-length bodies and of the lottery, as well as identifying newer sources of funding, including the role that innovative tax incentives can play. For example, the Government have made great play of the increased role that individuals can play, and undoubtedly more can be done. However, all the evidence so far points to philanthropic giving being focused on the large institutions, with smaller local and regional organisations being squeezed out. We could also do a great deal more to transform the banking sector so that it better understands the role that the cultural sector can play and is prepared to invest in those start-ups.

What is lacking is a cross-departmental plan to look at the sector afresh, realise the many benefits it brings in cash and in kind and underpin it with a realistic financial strategy. The alternative is a route of decline and frustration which will rob our economy of a great opportunity and our young people of a vibrant, creative future. I look forward to the noble Lord’s response to those concerns.

My Lords, I, too, congratulate the noble Lord, Lord Mawson, on securing this debate and, indeed, acknowledge the great practical experience that he brings to it. The debate has been illuminating with so much expertise having been shown across the House. Some of your Lordships have expressed concern about this issue but I say at the outset that the Government strongly support the arts and culture. I hope that, during the few moments I have in which to speak, I can demonstrate how and why the Government feel so strongly about them.

Over the lifetime of this Parliament, the Government have put in about £7 billion of public and lottery funding into the arts, museums and heritage sectors. Despite necessary pressures on government spending—your Lordships are aware of the economic climate in which we live—the importance of the arts and museums was recognised in the previous spending round. The DCMS provides grant in aid funding to the Arts Council England, the British Film Institute, 15 sponsored museums, the British Library and the Renaissance programme for regional museums. Many of your Lordships have mentioned the regions, which I will also refer to. We also secured a strong capital settlement for English Heritage, the National Heritage Memorial Fund and the Churches Conservation Trust. My noble friend Lord Cormack spoke passionately about cathedrals and I know that Lincoln Cathedral has a very special place in his heart. I am aware of its at-risk status, so I am very conscious of what he said. I am also very conscious of what the right reverend Prelate the Bishop of Worcester said about cathedrals and churches. The Government are actively considering ways to support cathedrals. I would very much welcome having a conversation with my noble friend and, indeed, the right reverend Prelate, after this debate so that we can have a proper talk about these matters because cathedrals and churches are very much part of the fabric of our nation.

Our rich heritage and vibrant culture of art, film, literature, dance and music delight and inspire the nation as well as the world. I make no apology for saying that the UK creative industries were worth £71.4 billion in 2012 and are, indeed, outperforming many other sectors of our economy. The noble Baroness, Lady Kidron, with all her experience of filmmaking, sees much going on which is of great value to many people.

From April 2012, we increased the share of National Lottery funding for the arts to 20%, which I think was a very positive step. The Arts Council’s investment programme for 2015 is now open, with £570 million available from the Arts Council to invest in the arts and museums in 2015-16. The Arts Council also offered an additional fund for libraries as well as a creative industry finance scheme offering business development support for creative industry enterprises. In addition, the Heritage Lottery Fund has around £375 million a year to invest in new projects.

As regards philanthropy, we are working with cultural organisations in London and the regions to encourage the development of other sources of income, including philanthropic giving and independent fundraising. In our opinion, philanthropy is not a substitute for public subsidy but should be seen as one element of a mixed-funding model. The noble Lord, Lord Mawson, spoke powerfully about this mix and gave examples of success derived from the entrepreneurial spirit and, indeed, most importantly, from community engagement. I congratulate him and the local community at Blackheath on providing such a great asset for the community and beyond. Being an “original green”, I was very taken by the comments of the noble Baroness, Lady Kidron, on the ecosystem because we want to secure a future for talent across the country. The skills and apprenticeships in the creative industries are a vital part of the next generation being part of this great sector.

The department, in partnership with the Arts Council and the Heritage Lottery Fund, established a £100-million Catalyst programme—a private-giving investment initiative for arts and heritage organisations. Indeed, I read the article on orchestras that the noble Lord, Lord Aberdare, spoke about, and I was relieved that a number of orchestras have been supported through the Catalyst endowments awards fund. I was also interested in what your Lordships said about regional funding. I make no particular plug for London, having so many interests outside London. I am thinking here of the Philharmonia Orchestra, which may be based in London and gains funding, but which spends much of its existence outside London touring, as do so many organisations in the theatre world. The Arts Council has invested £400 million over this Parliament in classical music organisations. I am, however, very much aware of what was said in that article and we need to see whether there are ways in which we can sustain and support them in what are challenging times. I am most grateful to the noble Lord, Lord Aberdare, for raising that point.

Catalyst has awarded more than 400 grants to help numerous organisations strengthen their fundraising abilities and diversify their revenue sources. The DCMS is also looking at ways in which private giving can be increased through tax incentives. The noble Earl, Lord Clancarty, talked of tax reliefs. The film, high-end TV and animation tax reliefs have been vital in supporting our creative industries, and we will be consulting shortly on a theatre tax relief, which will be helpful in both London and the regions.

Turning to the community arts sector, there are approximately 49,000 community arts groups in England, with an estimated 9.4 million people participating in arts-based activities on a regular basis. I suspect that many of those are the sorts of people that the noble Baroness, Lady Kidron, would be thinking of. Unlocking new revenue streams can be challenging for those organisations, and the Cabinet Office, alongside the Arts Council, the DCMS and a group of other organisations, is exploring the development of a fund to provide long-term social investment capital to arts organisations. I shall certainly be reporting back on this debate and the remarks that have been made by your Lordships, particularly those made by the noble Lord, Lord Mawson, on the entrepreneurial spirit and, indeed, his own experiences of that.

This group has also designed a programme to help arts organisations to take on investment through the Cabinet Office’s existing investment and contract readiness fund—a £10-million fund which provides grants to social ventures. There are many ways in which this Government support culture across the country beyond direct monetary investment. To promote our exceptional arts, cultural and heritage institutions overseas, the Government’s GREAT campaign continues to promote the best of what Britain has to offer. In 2013, the total value of tourism spend directly and indirectly in Britain is projected to be £127 billion—9% of the UK economy. I say that not just for the economy, as it were. I speak of it because of the employment that it provides, and the entrepreneurial and apprenticeship opportunities. That is the mix that we should be seeking to secure. Culture is central to that campaign. Our iconic cultural assets are often the most easily recognisable statement of what makes Britain great.

I would like to refer quickly to the First World War centenary because there will be a very significant cultural programme as part of the commemoration of the four years of that simply dreadful war.

The noble Earl, Lord Clancarty, mentioned the Creative Industries Council. It was set up by government but it is now industry-led. I am conscious of what the noble Earl said and I will report back on it. The council has been working to identify key barriers to growth for the sector, with activities focusing on access to finance, skills, exports and inward investment, copyright, and data collection. We are working with the industry to see how it can best implement its growth strategy, which will be published later this year.

Culture in this country is delivered by a great many organisations and, as the noble Earl, Lord Clancarty, reminded us, by people—artists, scientists, musicians, writers, filmmakers, actors and so many more. I was also particularly interested in the reference by the right reverend Prelate the Bishop of Worcester to the Hive, this great new opportunity of partnership, and the National Libraries Day last Saturday. But many national organisations are supporting smaller regional organisations and a great deal of lottery funding is going into the regions.

As time is not on my side, I would like to write more fully on where we are with regional funding of the arts because there are some particular figures on Arts Council and lottery funding, which take over 70% into the regions. It would be best if I referred to that more fully then.

I am conscious of the points made by the noble Baroness, Lady Jones, particularly about cuts. I acknowledge those. I understand why there is concern. It is why many councils are looking innovatively at how they develop services differently and more efficiently. That is why the Arts Council has a part to play in assisting and promoting culture with local authorities and there are so many examples—whether you look at the Hepworth Wakefield, the Mary Rose in Portsmouth or the City of Culture in Hull—where much good work is being done.

There is so much to say on arts and culture. On education, for example, the Government believe that there should be strong artistic, arts and music elements to education. I will write more fully about that. We are looking at ways in which we can support arts and culture in innovative ways to find new ways of doing things and setting up new partnerships. That is where we should be. That is why for all the reasons and many more that have been articulated today, particularly so ably led by the noble Lord, Lord Mawson, we all seek a thriving future for arts and culture. We should champion them.