The Stage

Theatres should give up charitable status, says Arts & Business’ Tweedy

Published Wednesday 9 March 2011 at 11:40 by Alistair Smith

Arts & Business chief executive Colin Tweedy has called for theatres and art galleries in Britain to consider giving up their charitable status, claiming that charity law is too restrictive and is leading to a risk-averse environment in the cultural sector.

Speaking at a seminar organised by the Westminster Media Forum entitled Arts and Culture - Filling the Funding Gap, Tweedy suggested, as part of a range of provocations for the arts sector to consider, that cultural organisations would be better off operating as co-operatives or social enterprises.

Tweedy said: “I no longer believe the arts in Britain should be charities. I believe they will be stronger, will take better risks and have a better capacity to become the micro-businesses they will have to be - and some of them major businesses - if they are co-operatives or social enterprises.

“The model of corporate governance is broken. Arts & Business has been as guilty as any of encouraging corporate leaders to be on the boards. When times are fine, it’s good. When times are bad, a risk-averseness comes into a trustee board and grips like a cold hand on a throat. We are seeing managements terrorised, marginalised and treated with contempt by trustees.

If we are to grow our cultural sector, we have to radically rethink the charity structures within which we work. Talk to the co-operative building society, talk to the co-operative movement generally, talk to the Social Enterprise Coalition. They believe the charitable laws strangle the cultural sector in these islands.”

Under charity law, trustees of arts organisations can be held personally liable if a charity is sued or incurs a financial liability. Critics claim this can lead to boards becoming risk-averse in straitened times. It has led to situations where, for example, boards of regional theatres have declared their venues insolvent against the advice of funding bodies such as Arts Council England.

Co-operatives are businesses that are owned and operated by a group of individuals for their mutual benefit. The John Lewis Partnership is an example of one of the UK’s more high-profile co-operatives.

Social enterprises are classified as “businesses trading for social and environmental purposes”, whose profits are reinvested to sustain that aim. The Big Issue and the Eden Project are both examples of companies run as social enterprises.