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‘Arts worth £5.9bn to UK economy’ – report

Alan Davey, chief executive of Arts Council England. Photo: Nick Gurney
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Arts Council England has published the findings of an independent report claiming that the arts and culture sector accounts for 0.4% of gross domestic product, with £5.9 billion worth of gross value added to the UK economy in 2011.

The results form part of an investigation by the Centre for Economics and Business Research that ACE says is the “first comprehensive analysis to determine the value of art and culture to the modern economy at a national scale”.

CEBR’s report defines arts and culture as including book publishing, sound recording and music publishing, performing arts, support activities to the performing arts, artistic creation and operation of arts facilities.

The report found that these areas combined provide 0.45% of total employment in the UK – on average 110,600 full-time equivalent employees. The performing arts were the biggest contributor to employment with around a third of this total.

Meanwhile, the report also reveals that the sector’s contribution to the UK economy has actually increased since the recession began in 2008, despite turnover in the sector falling slightly in the period.

ACE chief executive Alan Davey said: “We fund arts and culture because they have a unique ability to fire our imaginations, to inspire and entertain us. The contribution culture makes to our quality of life, as a society and as individuals, will always be our primary concern. But at a time when public finances are under such pressure, it is also right to examine all the benefits that investment in arts and culture can bring – and to consider how we can make the most effective use of that contribution.

“I am grateful to CEBR for their comprehensive and enlightening report and I am gratified that it quantifies what we have long understood. That culture plays a vital part in attracting tourism to the tune of £856 million a year; that arts centres and activities transform our towns and cities and drive regeneration, making the choice to maintain investment in culture a forward thinking one for local authorities; and that the arts support the creative industries and improve their productivity.

He added: “As the government considers the creative sector in its forthcoming Industrial Strategy, it is clear that the role of the arts and culture industry as a research and development pipeline must be properly considered. Not to do so is to ignore a key part of our economy and future prosperity.”

The publication of the report comes soon after culture secretary Maria Miller called on the sector to focus on making an economic argument for continued government investment in the sector.

Dr Dave O’Brien, lecturer in cultural industries at City University, London, welcomed the CEBR report and the contribution it could make to the argument for funding ahead of the government’s forthcoming comprehensive spending review in July.

He said: “It responds directly to [culture secretary] Maria Miller’s request for help to reframe the argument for culture during the current comprehensive spending review. The reality of the CSR is that, despite the obviously political nature of spending negotiations, going to discussions with Treasury officials with no evidence to support the case for funding will make it very difficult to make the case for funds. The devil of funding cuts will be in the detail and without detailed economic evidence DCMS will find it very difficult to defend its budget. CEBR’s work will make this process much easier.

“CEBR’s work also contributes to a range of work that moves beyond Miller’s narrow understanding of economic impact. Alongside NESTA’s Manifesto for the Creative Economy and DCMS’s ongoing consultation on defining creative industries, CEBR’s evidence on the economic role of culture is vitally important for the evidence based policy making that can help support the strong contribution the cultural sector makes to British life.”

The full report is available to download from www.artscouncil.org.uk 

Alan Davey’s full response is available here

The report’s key findings:

  • Arts and culture make up 0.4% of GDP – a significant return on the less than 0.1% of government spending invested in the sector
  • Arts and culture is a sector of significant scale with a turnover of £12.4 billion and a GVA of £5.9 billion in 2011
  • The sector’s peak turnover was in 2008 at £12.8 billion, before falling by around £1 billion in 2009 and recovering to £12.4 billion by 2011
  • Arts and culture generate more per pound invested than the health, wholesale and retail, and professional and business services sectors
  • The arts and culture sector provides 0.45% of total UK employment and 0.48% of total employment in England
  • At least £856 million per annum of spending by tourists visiting the UK can be attributed directly to arts and culture
  • The economic contribution of the arts and cultural sector has grown since 2008 despite the UK economy as a whole remaining below its output level before the global financial crisis
  • The arts and culture industry pays nearly 5% above the UK media salary of £26,095
  • Being located in an area with the twice the average level of cultural density could increase house prices by an average of £26,817

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