Courage under fire

As Arts Council England faces demands for a 50% cut in administration, Simon Tait examines its history of resourcefulness in the face of adversity and considers how it will adapt to the latest financial constraints

Arts Council England’s future has been questioned many times in its 64 years, not least when the present administration arrived. Now, perversely, when its independence has never been more challenged and its spending capability cut by a third, its survival has seldom seemed more certain.

In fact, chief executive Alan Davey’s main fear was that there would be a repeat of what happened in the early eighties when a new Tory government undermined the arts council of Labour-appointed Roy Shaw and Kenneth Robinson so that it lost credibility with the arts and was despised by government, and it took 20 years for it to recover. It seems not to have happened this time.

The changes the government is making are dramatic though, and the miracle is that there have as yet been no high-profile resignations. It seems likely that if the 50% administration cut demanded by the culture secretary, Jeremy Hunt, had been ‘front loaded’ – to happen at the start of the cutting cycle – both the chairman, Liz Forgan, and chief executive Davey might have quit. But they have two years’ grace and, believing they are suffering from a bad Treasury settlement for the Department for Culture, Media and Sport rather than a targeting of the arts, they felt they needed to see the arts through this trauma.

The Committee for the Encouragement of Music and the Arts was formed in 1940 and was endowed with a royal charter in 1946 as the Arts Council of Great Britain, with a rather broad brush mission to bring ‘courage, confidence and opportunity to artists and their audiences’. It became the Arts Council of England in 1994, with its mission unchanged, but in 1994 the National Lottery changed everything else with millions suddenly available for capital development.

After the debacle over the ‘reinvestment’ of grants in 2007, in which regularly funded organisations lost all or some of their funding – a PR disaster more than anything – ACE instituted a review under Genista McIntosh which led to a major rethink under a new chief executive, Davey. The process was well under way at the time of the 2010 general election.

What peeved the ACE high command in October’s demand for a 50% admin cut was that in the existing scheme staff was already being cut by 21% – 622 down to 491. Nine regional offices were grouped together into four regions – head office was shrunk from 142 people to 112, the executive board went from 14 to nine and Grants for the Arts (then based in London) was relocated to much cheaper Manchester. This office cleaning was worth £6.5 million a year, and since 2002 ACE had cut its operating costs by 30%.

ACE is facing the next four years of subsidy with a 29.6% cut, so that its current settlement of £449 million will become £350 million by 2015. But the government has asked that grants to the front line can only be reduced by under 15% – the figure identified by Davey as the point beyond which irreparable harm would be done – so that will have to be evened up elsewhere, and Creative Partnerships has been one victim of that, Arts & Business another.

Added to that, having survived the ‘bonfire of the quangos’ which saw the UK Film Council and the Museums, Libraries and Archives Council abolished, ACE is having to take on responsibility for museums and libraries. What has added to the rankle is that the government’s decisions were made before negotiations started, so that they are seen as political.

Forgan’s predecessor as chairman of the arts council, Christopher Frayling, liked to describe the arm’s length principle of arts subsidy as like the Venus de Milo – cut off at the elbows. Forgan might be forgiven for thinking this particular piece of classical statuary, designed by John Maynard Keynes 15 governments ago, had had another accident and lost its arms completely.

The government has not merely shifted the goalposts, it has changed the game. The arts minister Ed Vaizey has a disconcerting habit of claiming that the cut to the arts council is not 29.6% but no more than 11%, because of the extra Lottery money that is coming its way.

This appears to be turning on its head the additionality rules established by the Conservative government that brought in the National Lottery Act in 1994, saying Lottery funding should never be allowed to replace subsidy. “We will have to be ever vigilant,” says Davey.

Over the next four years, as the subsidy goes down, ACE’s National Lottery income is expected to rise from £152 million this year to £222 million, thanks to an increase in tickets sold and a reconfiguration of the good causes. Ten million pounds a year of that has been committed to a series of philanthropy challenge funds by Hunt, devised to attract private giving to the arts partly to offset the effects of the subsidy cuts.

What is happening is a major recasting of the arm’s length principle for the arts. Previously, the arts council has been charged with spending the money according to a strategy of its own devising. Now, with the grant in aid ring-fenced by the government to be accountable for grants, administration, capital and core grants (like ACE’s art collection or touring), strategising has been taken back by the politicians with ACE organising the cash distribution from subsidy, philanthropy and Lottery.

The post-McIntosh remodelling of arts funding is a ten-year plan, Great Art for Everyone, that was announced within a couple of weeks of the comprehensive spending review.

“When times get tough, you lift your eyes to the longer vision,” Forgan said at its launch.

Instead of 850 regularly funded organisations we will have national portfolio organisations, probably about 750, with all artists and arts organisations – including the RFOs – applying afresh. The deadline for applications passed at 10pm on January 24, and the decisions will be announced at the end of March.

Curiously, that deadline came the night before the Commons Culture Select Committee were hearing more evidence from Forgan and Davey, following a drubbing Davey had been dealt by the committee back in October. At last week’s extra select committee hearing Davey and Forgan were the only witnesses, and their theme that it was going to be tough but ACE would keep the arts flag flying seemed to land. It’s what they are good at, they said, and by what might have to be minute calculations tailored for different clients, they would make the funding work.

“Our hope,” Forgan said, in hope rather than conviction, “is that our legislators and those who call us to account understand these calculations.”

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