David Brownlee: Data shows that theatre thrives despite the cuts
Many years ago, when I first started working for Arts Council England, a theatre manager quizzed me on what happened to the data it provided in the long and laborious form that venues had to fill in every year as a revenue-funded organisation. Did anybody actually read it? Would it matter if they just made the numbers up?
I confessed I didn’t know and promised to try to find out. It transpired that ACE put all the data into a big file that was shared with the Department for Culture, Media and Sport, but then sat on a shelf gathering dust. This seemed a huge waste of time and effort by the managers of arts organisations around England. So I was delighted when, in 2005/06, the arts council started to publish the aggregate data.
I was amazed when ACE recently released the 2013/14 raw data for every arts organisation in its national portfolio. From the age and ethnicity of staff and boards to the number of commissions, the data supplied by each individual organisation is available to download for free from the ACE website. I do hope that the previously mentioned theatre manager took the time to fill in their form accurately.
Why does this all matter? Of course, it is great that the data provides greater accountability for ACE and all the organisations it funds, but used sensibly that raw data is a great resource for benchmarking.
It’s easy to choose the 10 organisations that you think most reflect your own and stick all the data in a single spreadsheet and do a few sums. Which of your cohort is getting the best return on investment for its marketing spend? Who has the lowest overheads? Which has the most ethnically diverse staff? All the answers are just a few clicks away. And when you have the answers, you can start asking those organisations questions about what they are doing that you’re not.
My focus in this article, and its companion piece to be published in next week’s issue of The Stage, will be on the aggregate data rather than benchmarking. Analysing the aggregate data is a great way of measuring trends in the sector.
We’ve just been through a very rocky five years for the arts in England. How is theatre (or, more specifically, how are revenue-funded theatres and theatre companies) fairing? This article will look at the how the income of the funded portfolio has changed; next week, I will focus on what the money has been spent on. I think the some of the trends will surprise many people.
First of all, the data ‘housekeeping’: we’re not comparing a constant sample. In 2009/10, ACE was providing revenue funding to 215 organisations. This compares with just 180 organisations in 2014/15 – and not all of those were necessarily funded five years before.
As I am sure the autumn statement has reminded the arts sector, standstill ‘cash’ is actually a ‘real’ cut due to inflation. According to the Bank of England’s inflation calculator (Consumer Price Index), on average what cost you £1 in 2009 cost £1.20 in 2014. I have therefore adjusted the 2009/10 to take inflation into account. Here are the headlines:
Public funding has fallen steeply
Okay, perhaps no surprise here in the headline, but dig deeper and it reveals just how savage local authority cuts have been with income from “local authority and other public subsidy” dropping by more than 50% over the period – way more than the overall cuts in local authorities budgets in the same time. It is possible that some of the organisations that lost funding after 2009/10 had particularly significant support from their local authority, but this will not explain a fall of almost £20 million in real terms.
Subsidy from ACE falls by 22%. This decline in the figure for revenue funding may be masked by ‘additional’ funding for programmes such as Catalyst. We also know that more than one theatre has required a special injection of cash to keep it afloat.
Leap in contributed income
Before commencing a resounding three cheers for the growth in funding from sponsors, trusts and individual giving, remember that next week we’ll be looking at what theatre organisations have been spending their money on and that fundraising has a cost. However, the new realities of the theatre-funding cocktail are put into sharp relief by the fact that contributed income has not just overtaken local authority-funded income in the five years, it has tripled it.
Earned income growth of 25%
Any readers aware of the business model of ‘public theatre’ in continental Europe will know our model is very different. Public funding will account for 80%, 90% or even more of overall income in Europe. That’s not the case in the UK, where in 2009/10 the figure was just 40%. By 2014/15, it had dropped still further to 26%.
But the big driver for this enormous shift was not philanthropy or sponsorship, but earned income. A leap of almost £60 million in real terms has more than reversed the fall in national and local public funding.
This is, on the face of it, great news. But we need to be a bit cautious. What is “earned income”? It covers lots of different income streams but in the theatre the largest element is ticket sales. We know from other sources (including UK Theatre) that the average price paid for a ticket is growing far faster than the volume of tickets being sold. This is not a problem if tickets remain affordable to all, but we must do everything we can to make sure restricted funds for our sector don’t mean restricted access for our audiences.
Theatres are also sweating their physical assets. It’s great if you can hire out your venue during the day to provide additional employment to staff and income for your organisation. It’s more of an issue if your artistic and education programmes are being compromised by your need to use your venue to earn non-arts related income.
And then there’s the issue of risk. Public subsidy provides a cushion to allow organisations to try new things. Sometimes they will be incredibly exciting and move the art form and organisation forward and reach new audiences. Sometimes (perhaps more often) they will fail. Without taking that risk of failure we won’t move forward.
Has there been less risk-taking in theatre over the last five years? I think that’s a very hard question to answer subjectively, but as a sector we need to keep making the case for public funding as crucial investment in research and development to keep us as world leaders.
The overall income of theatre has grown
Revenue-funded theatre in England has proved amazingly resilient in the last five years: despite unprecedented cuts to levels of public funding, overall income has grown by 5% even when inflation is taken into account.
Do take a moment to reflect on that figure. In the context of mammoth cuts and the longest sustained downturn in the economy in living memory, income has grown by 5% in real terms.
As the chancellor, no less, tells us that “£1 billion a year in (culture and sport) grants adds a quarter of a trillion pounds to our economy – not a bad return”, theatre in England is demonstrating that, despite cuts and recession, it is now even better value for the tiny investment it receives than it was five years ago.