Digital, Culture, Media and Sport Committee
Oral evidence: The work of Arts Council England, HC 941
Thursday 8 December 2022
Ordered by the House of Commons to be published on 8 December 2022.
Members present: Kevin Brennan; Steve Brine; Clive Efford; Julie Elliott; Damian Green; Dr Rupa Huq; Jane Stevenson.
In the absence of the Chair, Julie Elliott took the Chair.
Questions 1-72
Witnesses
I: Dr Darren Henley CBE, Chief Executive, Arts Council England; Pete Massey, Director, Northern Economy and Partnerships, North, Arts Council England; and Tonya Nelson, Area Director, London, Arts Council England.
Written evidence from witnesses:
– [Add names of witnesses and hyperlink to submissions]
Witnesses: Dr Darren Henley CBE, Pete Massey and Tonya Nelson.
Q1 Chair: I welcome everybody to this morning’s session of the Digital, Culture, Media and Sport Committee, looking at the work of Arts Council England. I welcome our witnesses. We have Darren Henley, chief executive of the Arts Council; Tonya Nelson, London area director at the Arts Council; and Pete Massey, the Arts Council’s director for the north, Yorkshire and the Humber, and the northern economy and partnerships. That is quite a title. Good morning; you are all very welcome.
As you can imagine, we have a lot of questions about the recent announcements on funding from your organisation, so I want to start by giving you the opportunity to explain the background to these strategic funding investments and how you have come to make the decisions, and to say anything that you want to say about the process, so that as we go through the questions, we are not repeating that over and over again. Darren Henley, would you like to start?
Dr Henley: Good morning. Thank you for inviting us. I think it is worth our going back to the beginning of the process, which is our new strategy, Let’s Create, which we launched in 2020. That strategy was based on a lot of conversations with a lot of people across the country. We very much wanted to talk to audiences, participants and people who were benefiting from the money—taxpayers’ money and National Lottery players’ money—that Arts Council England invests, but also people who were not benefiting from it. That is important; there are taxpayers and National Lottery players in every constituency across the country. We developed a strategy that was very much based on those audiences and participants, that enabled everybody’s creativity could come to the fore—that was very important—and that ensured that there were really high-quality cultural activities across arts organisations, museums and libraries in people’s neighbourhoods.
Since then, we have obviously had the covid pandemic. There was a real change there, so we are very mindful of that. Our last national portfolio round happened five years ago; there was a four-year round and then an extension of a year because of covid, so what we announced just a few weeks ago was the first announcement for five years, and it looks forward three years into the future.
A huge number of people—more than we have ever had before—applied to that round. There were 1,700 applications, with a total ask of more than £2 billion across the period. We made decisions with 990 organisations that are now in the portfolio, investing £446 million. That is an increase from the previous 828 organisations and £408 million. We had a huge number of fundable applications. As you would expect, a lot of existing national portfolio organisations made fundable applications, but we were really keen to reach out to organisations that had not been funded before. That was really important to us. There were 714 successful applicants, and we have 276 new applicants in the portfolio across the country.
Chair, would you like me to touch now on the instruction we received from the Secretary of State? Would that be useful?
Chair: Yes, that would be helpful; thank you.
Dr Henley: I am very happy to do that. We always receive instructions from the Secretary of State about our grant-in-aid investment. As you would expect, we receive directives about National Lottery investment, as all National Lottery distributors do. In this particular set of instructions, there was an uplift in the amount of money that was invested in the Arts Council—£43.5 million across the period. We were instructed to invest that outside London. There was also a desire to move money from London to other parts of the country. I stress that this was not a cut in the overall budget; it was a shifting of the money to other parts of the country. In year 1—the financial year starting April 2023—that would be a shift of £16 million, and by the end of the three-year funding period, it would be a shift of £24 million.
I can explain how we arrived at that. The first part is moving the budget out, so there was a reduction in the London budget. The second part is £8 million of investment in organisations that will go into our transfer programme. Under this programme, they will be funded in London initially, for the first two years, and then the money will move with them to a place outside London in year 3, thereby achieving the £24 million shift.
I will explain the other things in that letter. There was an instruction for a fairer spread of investment across London, so to outer London boroughs. Tonya, our director for London, will be able to talk to you in more detail about that a little bit later. It was about sharing money out and not concentrating so much in central London boroughs. Also, there was a really clear instruction to broaden access more generally, to increase diversity, and to increase engagement in places where there was lower engagement. One of the things we did there was create a series of Levelling Up for Culture Places. There were just over 100 of those around the country. They were places where we were absolutely focusing on investment, and where, in all honesty, communities and individuals had been underserved in the past. We felt that this was a really strong way of changing that dynamic.
We now have greater opportunity, a far greater sense of fairness of distribution of public money across the country, and real opportunities for a talent pipeline, which I know this Committee has been very keen to talk to me about before. Indeed, in many of the conversations that we have had in the eight years I have done this job, you have challenged me on the amount of money we spend in London, and about doing more to spread it across the country. I would hope that this has helped to meet some of the challenges that you have set us. That includes how we spend the money in London as well.
Q2 Clive Efford: Thank you for coming to answer our questions this morning. To clarify, did the instruction to move money away from London come from the current Secretary of State or the previous one?
Dr Henley: It was the previous Secretary of State.
Q3 Clive Efford: Have you had recent discussions with the current Secretary of State? Do they still want to move money away from London?
Dr Henley: Nothing has changed in terms of the instruction that we have received.
Q4 Clive Efford: For how long have you believed that funding is weighted too much in favour of London?
Dr Henley: In my role, I would advocate for more funding across the country, a bigger pot of money in total, because in and outside London, and across all art forms, I absolutely see what that can achieve. We have talked about being fairer in that, so over the last few years, we have made sure that more of our money is spent outside London, but even next year, we will still be spending £152 million in our national portfolio in London, which is around a third of our budget. It is a very difficult conundrum and we absolutely understand that, for anybody who we take money away from and who does not make a successful application, there are problems there. But all the way through, this is a balance, and there will be other people who will be benefiting.
Q5 Clive Efford: There has been a lot of controversy around the English National Opera and the decision to require it to move outside London. Is that a decision that you would have taken anyway, because you think that the ENO is failing as a national organisation, or is that something that you feel has been forced on you by the Government?
Dr Henley: I absolutely do not think the ENO is failing as a national organisation.
Q6 Clive Efford: So there is no need to move it.
Dr Henley: We have to deal with the reality of the funding envelope within which we work. We can deal with hypotheticals, but they will be hypothetical. We had a funding envelope where we needed to move money out of London. We looked very carefully and thought very hard about how we would do that. Tonya will be able to give you some of the data on London, but in our last funding round, the top four organisations in London had 43% of the London budget. To make the sort of shift that we needed to in London, it was inevitable that there would be challenges for us at every price point of every organisation.
Q7 Clive Efford: You referred to this Committee supporting moving resources away from London, which is true—we have been here, and we have asked questions about that—but we have also pointed out that it is unfair to include in London’s funding national bodies that are based in London, and to say that it means that London is getting an unfair amount of funding. What do you think will happen if the ENO moves out of London that could not happen if the ENO stayed in London?
Dr Henley: The first thing I would say is that nationally significant organisations are not just limited to London; they can be in places right across the country. That is important to note. With the English National Opera, we absolutely believe in them as an organisation, and I think they do excellent work. We are saying to them that because of our funding requirements, we need them to think of a different way of operating.
Uniquely, we have set aside £17 million. Every organisation that is exiting the portfolio will be allowed to apply for transition funding—seven months of money in the new financial year—giving them a year of visibility. That alone would represent £1 million a month for the English National Opera, but we have another £10 million, which is an indicative amount of money that we talked to them about, to help them think about how we might work with them to reshape their organisation. We would like to see an organisation with a substantial base outside London, but we absolutely recognise that the Coliseum is an important part of their business plan going forward.
Q8 Clive Efford: But it wasn’t their business plan going forward, was it? What you have just described is a fait accompli: “You’ve got to move out of London, and here are some sweeteners to try to make it a little bit easier.” That is what you have just described.
Dr Henley: But the funding context is that we needed to reduce the money in London, so that was the decision we took. We think they are a strong organisation—an artistically excellent organisation—and we want to work with them to find a way for us to fund them outside our national portfolio.
Q9 Clive Efford: In the discussions with them about what was best for the ENO to deliver on their plans, there was never an option for them to stay in London. It was just a fait accompli: they had to go, and that was it.
Dr Henley: We cannot fund them in London, so we need them to be funded outside London. We would like to work with them so that they are in a strong position to make an application for our next national portfolio in three years’ time from outside London. I absolutely acknowledge that the Coliseum will, I am sure, be an important part of their business plan. Being able to present large-scale work on a London stage will be a very important part of that. In the conversations that we have had with them since this announcement, we have reiterated that a number of times.
Q10 Clive Efford: Tonya, do you fear that diminishing London’s status as a cultural centre that is respected across the world will have lasting consequences for arts and culture in London?
Tonya Nelson: I feel that the process we have carried out is one that balances London’s remit as an international cultural leader, as a national leader, and as needing to serve the breadth of the London community. We made decisions thinking about things from that perspective.
As London director, of course, I would always want to increase funding in London, but we always have a different funding envelope that we are working on in each NPO. When we were making the decisions, we were trying to understand how, if we have to make a reduction of £24 million, to balance that across the art forms, and across organisations of different scales and reaches. We continued to invest in some of the top organisations in London. We continue to fund the Southbank Centre and the Young Vic—all those really top organisations—but we have also made the decision to move some funding to the outer boroughs, to make sure that we fulfil that three-tiered remit for London.
Q11 Clive Efford: But is it possible to be an effective national organisation—to have an impact on the arts in the regions—if your headquarters are not based in those regions? That seems to be what is being suggested. Is it possible to have an effect nationally from London?
Tonya Nelson: Yes. We have a range of organisations, and they all look at how they can make impact in not only London but across the country. That is really important, because the ecosystem in London and those national organisations should be drawing on the best of talent from across the country. When we support the rest of the country, we are actually creating the talent pipeline that will serve those national organisations and keep them at the top of their game nationally and internationally. It is really important that is an ecosystem that flows out of London and comes back into London.
Q12 Clive Efford: Again using the ENO as an example, what do you think that the ENO will now be able to do that it couldn’t do when it was based in London?
Tonya Nelson: We want to improve that ecosystem, in terms of having that flow. We see it having a base outside London, but also being able to do work in London. When you look at the London portfolio—
Q13 Clive Efford: So there is no point in moving it? We are not achieving anything; we are just moving the base.
Tonya Nelson: We hope that we can work with them to come up with a model that serves and creates a base outside London.
Q14 Clive Efford: What I am not hearing from either of you is what will be better as a consequence of moving the ENO.
Dr Henley: One of the things in the ENO’s application was a piece of work that they called neo-ENO, which was looking at opera at different scales, and looking at connecting with different audiences. We were very excited by that.
Q15 Clive Efford: And they can only do that because they have moved outside London?
Tonya Nelson: We can only fund them because of the funding envelope. You have to go back to the start of the decisions. We made this decision because of the funding envelope that we have. We cannot subvert that, so what we are doing—
Q16 Clive Efford: So it is a political decision to move this national body outside London, regardless of its performance?
Dr Henley: The decision was to share more fairly and more equitably investment in arts culture around the country. I sit in our office in Leeds every day, and I can absolutely assure you that there are nationally significant organisations in towns and cities across the country. There are many in London, but there really are many across the country as well.
Pete Massey: Yes. Sheffield Theatres, for instance, is one of the biggest theatre complexes outside London. They are constantly supplying product to the west end and the National Theatre, as are others. You can be perfectly successful in the regions and make work that tours London, and quite a lot of product made in the north does come to London successfully.
Dr Henley: The Royal Shakespeare Company will probably be a great example of this; it is based in Stratford on Avon, and has a very meaningful relationship with London.
Clive Efford: Okay. Well, I will leave it there.
Q17 Jane Stevenson: I am staying on ENO funding; I previously worked as a classical singer, so it is an area that I am very interested in. I am slightly mystified by the decision, and I want to know how you will deem it to have been successful. My colleague, Mr Brennan, will talk about Welsh National Opera’s funding and touring ability, but how will you judge opera to have fulfilled what you want it to achieve?
Dr Henley: If we are back here in five years’ time, I hope we will have a very vibrant opera ecology in this country at all scales. It is really important that we are still performing and presenting large-scale opera in proscenium arch theatres across the country. It is very important that we have large-scale specialist opera organisations like the Royal Opera, First Act Opera International, Welsh National Opera and Opera North.
We are also really interested in how opera as an art form connects with new audiences, so we have brought into this portfolio new organisations, including OperaUpClose, based on the south coast, and Pegasus Opera Company. We have put more money into English Touring Opera, which tours around the country at a smaller scale. We have also put more investment into Birmingham Opera Company, which does some very interesting and different sorts of opera.
We absolutely believe in opera. Opera is expensive because of the forces it involves, including singers, musicians and technicians. We absolutely know that to be the case. We really do believe that the people who work in opera have the ability to work with us to reimagine this. It is also really important that we reach new audiences for the art form. That is really important, as it is with every art form.
Q18 Jane Stevenson: You are moving English National Opera out of London. I am a West Midlands girl, and I have no desire to see London prosper above Wolverhampton, but the number of people who can travel to a performance at the Coliseum within a reasonable timeframe for an evening out would be cut vastly, by many millions of people, if it were relocated to Manchester. Do you think that is opening access or closing it off?
Dr Henley: We still would imagine that English National Opera will be performing large-scale opera at the Coliseum in the future, but we also imagine that they might be doing opera at different scales in other places. It may be Manchester. To be absolutely clear, they were not instructed by us to move to Manchester—it is an option. Around the country, many of our elected Mayors are very interested in seeing whether they can host a company like English National Opera in their cities.
Q19 Jane Stevenson: You said previously that you thought very hard about how to achieve the spending requirements of moving that funding out. Why did you not involve ENO in the conversation about how they can spread out? My immediate thought was that you do not have to physically move ENO; you have to reallocate the money. You could say that ENO is taking a residency in the wonderful Grand Theatre in Wolverhampton, or taking a week’s residency in Truro or anywhere else. It could go to many more places than it does. Surely it would fulfil the funding requirement of spend out of London if ENO could come to you and say, “This programme of residency is 90% of the funding you are giving us.” Why is that not an option?
Dr Henley: You are right that touring is an option, but centres of production excellence and creativity around the country are important too. For us, where organisations are based—
Q20 Jane Stevenson: Sorry to interrupt, but ENO have done that before. They had a satellite organisation, English National Opera North, which is now Opera North. Why not repeat something that has already been immensely successful and has sprouted an independent, very different organisation? Do you think the timeframe of three years in which you are supposed to be up and running and out is at all realistic? None of the correspondence I have had on this thinks it is anywhere near achievable.
Dr Henley: Let me unpick some parts of that question. We do think it is a journey. On why we did not talk to English National Opera beforehand, all our decisions have an interdependency. We have one budget, and we can’t spend the same money twice. I know you are not suggesting that. For every decision, when we decide to fund organisation X or not fund organisation Y, there is an interdependency, so we have to make those decisions all at the same time.
We agree that it will take time to do this. That is why we have said to English National Opera that we want to talk to them about it. We want to fund them in a way that enables them to do that. Those are the conversations that we are having with them right now. We think that by the end of the three-year period, they can have a meaningful presence outside London. It will be a journey; I understand that.
Q21 Jane Stevenson: You are expecting hundreds of people to relocate with not very much notice, including all the artists who work there and the orchestra. Having worked as a classical singer in the London ecosystem, I know that you pick up those jobs—singers get ill quite often. Singers do not just turn up at ENO and perform, and that is all they do; they have teaching posts and regular other performances within London, because of the density of population within the M25. Expecting someone to relocate north will have a fundamental impact on their ability to earn a living, especially if you are expecting the whole of ENO to move. If you moved a smaller company there, I could see that there would be that extra work and other ways of achieving the balance, but for many of those artists, relocation will not be an option if they have family with jobs here. It is a massive impact on hundreds and hundreds of people.
Dr Henley: I absolutely acknowledge that impact; in no way am I attempting to belittle it or cast it to one side at all. There are two examples that we could give, one a larger-scale organisation and the other a smaller one. The larger-scale organisation is Birmingham Royal Ballet, which moved from London over a period of time and I know is operating extremely successfully in Birmingham now, with full force; it is doing amazing work from Birmingham.
These are the things that we want to work through with English National Opera, and we want to continue talking to them about them over the coming years. We could not tell one organisation that they were in or out of the portfolio, because the final decisions were only made just a few weeks before we announced them. It wasn’t that there was anyone who was always going to be out of the portfolio; we did our very best all the way through to create that balanced portfolio that enabled us to spend public money in the best way possible for the benefit of audiences and participants right across the country.
The other organisation—another from Mr Green’s constituency—is Jasmin Vardimon. That is a much smaller organisation, but it was a London-based dance company, and it moved initially to Ashford. Just this week, it has finally opened its amazing new venue in Ashford, a real home for it, and that is something we have been able to invest in. That happened over time: they moved first, they did the work, they built the relationships with the community, and then the local authority and ourselves were able to make an investment in a purpose-built new building for them. That is benefiting the people of Ashford, but it is also still connected—only 37 minutes away on the fast train—to London.
It is possible to do this. I absolutely understand and respect what you are saying about the challenges for the individuals involved; I am really not trying to brush that aside. These are the things that we are very keen to try to work through, to get to the best position on this.
Q22 Jane Stevenson: I am very pleased that you are working with ENO now to try to come up with a solution. If the numbers and the hard facts of the business plan and business model for what you suggested originally—“Yes, you’ll still be able to perform in the Coliseum, but”—point to that not being possible, and to it being an existential threat for the company as a whole, will you be prepared to re-look at this and work with residencies or satellite organisations to fulfil what you want to achieve? What I would like to see is a common-sense approach to see how you can work together to tick the boxes you need to tick about spreading availability of, and access to, culture using the excellence within that company, but with minimum impact on the lives of the people who work there. Surely that is what you could be doing.
Dr Henley: We have had very positive conversations since we made the announcement. We have spoken to the management there regularly, and I think they are very constructive conversations.
I genuinely believe that we will get to a position—you asked me this at the start—where in five years’ time, English National Opera will have dual homes: it will still be here in London performing, but it will be based somewhere else as well, creating substantial work. I think it will be creating its best work, and we will be investing in that. I really very much hope that it will then be able to make a successful application to come back into our portfolio in 2026 with that new model. It may not be all the way there by then, but we will be working with them and on that journey. But I absolutely hear what you are saying, and we are very committed to being supportive, both to opera and to English National Opera.
Q23 Kevin Brennan: Mr Massey, as the Director of Northern Economy and Partnerships, North, at Arts Council England, do you welcome the fact that as a result of this decision to try to spread culture a bit more around the country, the Welsh National Opera has had to withdraw from performing in Liverpool with immediate effect?
Pete Massey: We want to get as much really high-quality arts and culture in front of as many people in as many places as we possibly can.
Q24 Kevin Brennan: Yes, but do you welcome it?
Pete Massey: I don’t welcome the fact that are not going to be going to Liverpool any more, but we also have a really—
Q25 Kevin Brennan: Is that what you expected to happen as a result of this decision?
Pete Massey: I don’t know. As Darren said previously, we don’t—
Q26 Kevin Brennan: You’re the director in the north and you don’t know what the consequence would be for opera in Liverpool of the decisions taken by Arts Council England.
Pete Massey: Well, as it happens, Welsh National Opera was looked after by our West Midlands colleagues, so we weren’t aware of that. But we don’t talk to organisations during the application process, because—
Q27 Kevin Brennan: Did you talk to your West Midlands colleagues about it?
Dr Henley: I did, so perhaps I should answer that question. We are still investing in Welsh National Opera, so they are still receiving investment of £4 million in the portfolio.
Q28 Kevin Brennan: But how much have you cut from their touring—
Dr Henley: Just about £2 million.
Q29 Kevin Brennan: What percentage is that of the amount you give them?
Dr Henley: Two out of six, so—
Kevin Brennan: A third.
Dr Henley: Yes, a third. But they do receive £4.5 million, obviously, from the Welsh Government for the work they do in Wales. For organisations like them, where we have made a significant change to their funding but they are still in the portfolio, we have a pot of money called Transform, which they can bid into up to £5 million across the next three years, in addition to that £4 million, to help work on that. They have made the decision that, for them, working in Liverpool is economically not viable. We respect that decision, and we will continue to talk to them about that.
Q30 Kevin Brennan: But that is a result of your decision. That is why they had to make that decision. Tickets were just going on sale, weren’t they? So they had to do that.
Dr Henley: In the next year—I know it is a different sort of opera—there are concert performances of opera at the Royal Liverpool Philharmonic Orchestra, and we will talk to other organisations that may want to work either at that scale or at a different scale in Liverpool.
Q31 Kevin Brennan: What discussions did you have with the Arts Council of Wales about this before you took the decision?
Dr Henley: The Arts Council of Wales was not involved in the decision-making process.
Q32 Kevin Brennan: I didn’t ask whether they were involved in the decision making; I asked whether you had any discussions with them. The whole point is that Welsh National Opera provides to both countries a major opera company that tours and has toured in England, in places like Liverpool. It has a major impact in the midlands, as you rightly pointed out, in Birmingham, and in places like Oxford, Bristol and Southampton. It therefore provides, in a very economically efficient way, a major opera company for both countries, because of its unique position of being funded through the Arts Council of Wales for its work in Wales and being funded to tour to places in England.
It seems ironic to me that this whole process is supposed to be as a result of the Secretary of State saying, “We want to spread culture around England a bit more,” but the consequence of your decision in cutting Welsh National Opera is actually to reduce the ability of opera to be toured around England, including the immediate withdrawal of opera from Liverpool. I put it to you that it is a dereliction of duty not to have spoken to the Arts Council of Wales. This is a United Kingdom Government and it is supposed to be a Government in favour of the Union, and this is a great example of how we can work in partnership to do these things, yet you didn’t even speak to the Arts Council of Wales, your sister body with responsibility for culture and arts in the United Kingdom, about the consequences of this decision down the line for that opera company.
Dr Henley: They were aware just before the announcement was made, but we didn’t consult them in the announcement, so—
Q33 Kevin Brennan: I put it to you that that is a dereliction of duty.
Dr Henley: I believe that we are here to do the best we can for audiences and for art forms across the country. We have invested in other opera companies around the country at different scales and we still—
Q34 Kevin Brennan: Were they just an easy target because they are called Welsh National Opera?
Dr Henley: Not in the slightest, because the work that they do runs particularly—we are particularly excited about the work they are doing across the south-west of the country. As I said, with the £4 million a year that we will be offering them, and up to £5 million further, we will still be their majority funder over the next three years.
Q35 Kevin Brennan: But in three years’ time, my constituents will be losing their jobs when that money runs out because of what has happened. They have standing as a major opera company with a very high reputation, artistically, and I have not seen any evidence there was any dissatisfaction with the quality of their work.
Dr Henley: In three years’ time, it is a blank sheet of paper—nobody is automatically in or out of our portfolio—so they will be able to make a potentially successful application once again.
Q36 Kevin Brennan: Do they do good work in the community in the midlands—in Birmingham, Wolverhampton and places like that?
Dr Henley: Yes, absolutely.
Q37 Kevin Brennan: And why is all that being put under threat, if you are happy with the work they do?
Dr Henley: Well, we have a budget overall and a set of objectives across all art forms. There are other music genres that this Committee has challenged me about supporting in the past, and we have tried very hard to support more of those as well. Other art forms, museums and libraries sit inside this portfolio as well, alongside performing arts. It is important for us to try to balance it.
We are looking all the time to try to meet a series of objectives to try to benefit as many people in as many ways as we possibly can, but that means there are some tough decisions. The money is finite and, as I say, we can only spend it once. We don’t take these decisions lightly. We have done everything we possibly can in this round for those organisations who are exiting the portfolio to give them greater support. We have never, ever had transition funding before. We have never previously given anyone funding who left the portfolio; they left and that was that. We have tried very hard, particularly understanding some of the economic challenges that people are facing. We do respect that.
We value the Welsh National Opera unequivocally; we value opera unequivocally. We want to work with them.
Kevin Brennan: I am not going to go on much longer. All I want to say is that I think that this particular part of your decision-making process goes completely against the stated objective of this levelling-up, spreading-culture-around-the-country process. I am a big believer in the arm’s length principle, but to me, the fact that you would take it to the extent that you wouldn’t even talk about the decision with the Arts Council of Wales, when you know the impact it is likely to have, is staggering. That is all I will say.
Q38 Dr Huq: Did you consult with Opera North on any of this?
Dr Henley: We didn’t consult with any organisation about any other organisation as part of the process.
Q39 Dr Huq: But were Opera North consulted about the whole funding envelope? Ostensibly, this should be good news for the north.
Dr Henley: Opera North has actually had an increase in funding in this round.
Dr Huq: Opera North in Leeds has had its funding static, and it is furious.
Pete Massey: They have actually had an extra £100,000 a year from next year, which is to expand their In Harmony programme into a Levelling Up for Culture Place.
Q40 Dr Huq: That is interesting to know. I wonder if you saw the editorial in The Yorkshire Post by Paul Fleming, the head of Equity. He says that “the truth is that ‘levelling-up’ is the lipstick on the pig of austerity,” in this case, and that “it is the audiences and workers in Yorkshire who will suffer.” Some 70% of the organisations facing 100% cuts in their funding are actually outside London.
Dr Henley: I think you will find that West Yorkshire is actually the area of the country that has achieved one of the greatest increases.
Pete Massey: Yes, there has been a 36% increase in our funding into West Yorkshire from next year, so it is a significant increase across the board. Demand everywhere was astonishingly high. Even though in the north we didn’t have the issues that London had in terms of budget cuts, we still had way more demand than we could meet. We had 440 applications and we were only able to bring 282 organisations into the portfolio. That is 74 new organisations in the north, and 70 organisations got increases in funding. Overall, I think it is a really positive picture for the north, actually.
Q41 Dr Huq: What about the Oldham Coliseum? They are having a 100% cut. Did you consult them? Are they going to be happy about this?
Pete Massey: No, we don’t. We are really supportive of Oldham. Oldham is a Levelling Up for Culture Place; it is one of our priority places. While we are not going to fund Oldham Coliseum—the organisation as it stands—we are aware that the local authority has managed to attract significant investment from the towns fund to create a new arts centre, so we have set aside £1.4 million over the next three years to work with the local authority to make sure performance continues in Oldham.
Q42 Dr Huq: The late Bernard Cribbins, who trained there, would be turning in his grave. A lot of people who came through there—Maxine Peake, Julie Hesmondhalgh—will be furious about all this. One hundred per cent. cuts.
Pete Massey: I am not going to argue with the fantastic work that Oldham Coliseum has done in the past, but organisations still have to put in a really good application and convince us that they are able to deliver over the next three years. In some instances, they were not able to do that.
Dr Henley: Sorry to interrupt. To be clear, we have ringfenced the money and it will be invested in Oldham. Working with the local authority, we believe there is a very strong option, so Oldham will not lose out because of that. There is no funding deficit in Oldham because of this.
Q43 Dr Huq: Can you see why all this looks a bit politically motivated? There was a previous Secretary of State—we spoke to the new one this week, who has a new approach on some matters. Where the cuts are taken from looks nakedly political.
Pete Massey: I can absolutely assure you that there was no political influence in any of the decisions we have taken. They were taken entirely against our strategy and against the instruction that we got from the Secretary of State, and of course obviously taking into account the applications that people made to us.
Dr Henley: And there will be growth in cities such as Manchester, Liverpool, Leeds and Bradford, which are not run by the current Government.
Q44 Dr Huq: For every £1 spent in the arts, up to £8 is spent in local economies, on things such as hospitality, transport and builders. A 100% cut looks like a false economy; some 70% of these are outside London. The headline looks like it is London-bashing, but actually there are lots of people outside London who are massively dissatisfied with this.
Pete Massey: Of course any organisation that has been in the portfolio and is not going to get funding again will be incredibly disappointed. These are not decisions we take lightly. We exist in the sector and know people in the sector. We know how hard people take it and how worried those people will be, but overall the picture outside London is that our investment has gone up almost everywhere.
Dr Henley: One of the things that was very important when we talked to people with Let’s Create was that there were a lot of people who were not benefiting from organisations that connected through public funding. There are 276 new organisations across the country; that is a real difference. We are going to be taking taxpayers’ money and National Lottery players’ money and connecting with people in places where there has not been investment before. I understand and appreciate that for those people who have had funding before, it can be shocking and worrying, but there is a whole group of people—276 organisations—who are getting it for the first time. That is really important. We are benefiting communities, places, groups of people and individual artists who have never had the benefit of public funding.
One of the things we learned with the Culture Recovery Fund, where we connected more widely with organisations through public funding than we had ever done before, was that there is whole new world out there of people who had not made that connection with us. Out of that, we have been able to bring taxpayers’ money to more people and benefit more people. That has been a big part of what we set out to do with Let’s Create.
Pete Massey: Just to say, our investment in South Shields goes up 351%. In Rotherham, it goes up 207%; in Barnsley, 184%; in Kirklees, 121%. All of those are Levelling Up for Culture Places that are going to get significantly more investment than they have ever had for the next three years.
Dr Huq: It is a quality thing as well as quantity thing, as well as being sums on a spreadsheet.
Pete Massey: We are not investing in poor quality companies or organisations.
Dr Huq: People are being expected to do opera from a car park and be grateful for that. People are competing against each other for the crumbs and being pitted against each other.
Pete Massey: Listen, I saw a Ukrainian opera company present in a warehouse in Huddersfield three weeks ago and it was fantastic. It is not the same as grand opera, but that does not mean it is not good quality.
Q45 Dr Huq: Turning to London, I must thank you for Gunnersbury Park being recognised as a national portfolio organisation, with nearly £130,000 for three years. At the same time, we have new venues in my seat. There is the ActOne Cinema in the former Passmore Edwards library in Acton and the Ealing Project venue, where Kevin Brennan has trod the boards and entertained the punters before.
Damian Green: With an Arts Council grant?
Dr Huq: The thing is, those two organisations are not funded by anyone. They are brand new but suffering soaring bills and the general post-covid fall in footfall. Will they ever get funding such as this? It is unlikely, isn’t it? Gunnersbury Park is a stately home that has many hundreds of years of history.
Pete Massey: National portfolio funding is only one of our funding programmes.
Q46 Dr Huq: But how are new people going to get a look in?
Tonya Nelson: In this portfolio we have made a big effort to invite new organisations in. The whole thing is that we don’t want it to be an exclusive club, so that once you get in that’s it and nobody else can get in, so we are really proud that we have invited 61 new organisations into the portfolio. Our hope for the future and what this is really about is following through with Let’s Create in terms of that idea of spreading the money outside central London, so we have increased—
Q47 Dr Huq: So I should tell them to apply for the next round?
Tonya Nelson: Well, as Pete was saying, NPO is not the only funding round we have; we have project grants and other grants that we give out to organisations. Many organisations will go from having project grants at different levels to the NPO portfolio. We want to build relationships with as many organisations as possible, because we are a development agency, and we are developing arts and culture wherever people live and in all the ways that we can, using the different funding streams that we have available to us.
Pete Massey: Most organisations that have entered the portfolio this time, we would probably have had a funding relationship with via other routes previously.
Q48 Dr Huq: In a Radio 4 “Front Row” programme on 7 November, Sir Nicholas Serota said that “we”—you guys, Arts Council England—“decided we should not spread the misery across…the country”, but “should actually identify those companies that we felt could survive a withdrawal”. That is what is so invidious about the ENO, and about the Donmar Warehouse—it raised eyebrows when that happened. He went on: “we had faith that they had the ability to respond”.
The Donmar Warehouse has healthy reserves, and it feels like they are being punished—that is what they put to me. I was there just the other day. Reserves are meant to be for a rainy day, a risk. The income they gain from box office is quite modest, but they have been prudent. Are they now being punished by you?
Tonya Nelson: First, reliance or reserves are not in our balancing criteria—that is not something we look at. We have made reductions and cuts in London based on a number of balancing criteria. You will see that some organisations are highly reliant on Arts Council and others are not, so that is not a criterion we are applying across the board.
On making those reductions in the environment that we are in, clearly all organisations will be under financial pressure. In a sense, we are thinking about trying to make a reduction of £16 million right now, immediately, while also having to think about bringing in new organisations, as you say. We have to free up enough funding to make the savings and to bring in new organisations.
If we were to apply the cuts equally across all the organisations, we would destabilise the entire sector. The whole London ecology would be destabilised. We have to make really difficult decisions about organisations. We think, “Okay, right now it is time for us to change our funding relationship with that organisation. They may not be an NPO, but we can fund them and work with them in a different way going forward”, in order to make the saving and to be able to free up budget for new organisations.
Dr Henley: Dr Huq, on the two organisations that you mentioned in your constituency, we would be very happy for our relationship manager to have a conversation with them, because actually there is a route through. In some parts of the country, we have our Creative People and Places programme, which is often where we first have engagement with organisations and artists, and in other places, it can be through National Lottery project grants. There is a journey there, so we would be happy to have that conversation—that is part of our role as a development agency.
Q49 Dr Huq: Okay, the two newbies I will link up with you, but as for the two big guys, the ENO and the Donmar Warehouse, do you honestly think that the transitional funding of seven months is adequate for those hundreds and hundreds of staff in well-paid, unionised jobs—in the case of the ENO—to find a purpose-built venue, and to transfer jobs and people, as my colleague Jane was saying, all the way across the country, hundreds of miles. Is that realistic?
Dr Henley: For English National Opera, we have a £17 million pot already identified. We are having conversations to understand what the process might be over the next three years for them to undergo the change. We are having that discussion, so already £17 million is on the table. Also, the money that we are investing in the national portfolio in opera—£30 million—does not include that £17 million for English National Opera. That is totally separate and on top.
Q50 Dr Huq: The word coming back from the sector is that it is not an adequate exit fund. The way this is being done is just brutal. There is no soft landing or anything.
Pete Massey: It is 12 months though, really. We have given them notice now. Their current agreements don’t end until the end of March, and then it is a further seven months. Actually, it is effectively 12 months’ notice before we ultimately stop funding them.
There will be organisations that are leaving the portfolio that will have to reshape their business models radically. There will be others that will leave the portfolio that will make a good fist of it through project grants or other programmes. We have had examples in the past of organisations that have carried on reasonably successfully outside the portfolio. But for some, yes, it will be very difficult.
Dr Huq: I think you’ve got a lot of convincing of the sector to do that these transitional arrangements are adequate.
Q51 Chair: It might be a good idea that the next time you come before us you give us an update on some of these very large changes that are happening, just to let us know where things are and how things are progressing. That might be useful.
Dr Henley: We’re very happy to do that.
Q52 Steve Brine: Morning. You noted that the national portfolios were given an increase in funding. I wonder, Darren, whether you think that is sufficient, given the cost of living pressures that we know are out there. I mean, we all talk to organisations in our constituencies and hear from them through this Committee about energy deals coming to an end, and they are worried. I wonder whether you wish to go there on what is sufficient.
Dr Henley: You make a very good point. The challenges when this budget was set weren’t clear to everybody. Also, energy is a particularly apposite point, because it is pure luck when your hedged deal finishes or starts. You can run your organisation perfectly properly, and it just happened to be that there is a date and you’ve been absolutely hit by that. We really do understand that.
We’re spending a lot of time gathering a lot of data for Government around this, to show them that. Ultimately, it will be a Treasury decision and not a DCMS decision even, because it will be a large amount of money. But we will continue to make the case for all our area. We sit in the arts world—in museums, libraries, all of which have huge bills to open their doors, and that is a challenge. We recognise that enormously.
What we haven’t got is more money, but what we have got is the ability to try to flex some of the requirements we place on people. We are having bespoke conversations with everybody who is in the portfolio going forward, saying, “Look, how does this best work for you, given that this is not your fault?”
Q53 Steve Brine: So you do make the case through your sponsoring Minister?
Dr Henley: Absolutely right.
Steve Brine: You constantly make that case?
Dr Henley: Yes. I’m kind of greedy for what we can get into the arts and culture world. I will always make the case, because I just know from my travels around the country how much of a difference it makes to places—
Steve Brine: It would be very odd if you didn’t do that.
Dr Henley: It would.
Q54 Steve Brine: Does the amount of money you have and are disbursing leave the arts infrastructure in a better or worse state?
Dr Henley: It leaves the arts infrastructure in a better state, but if there was more money it could be better still. We have to work within the envelope we are given; as you know, once funding is announced, we have to work within that. But we will always be making the case—always we are talking to Government about how there might be different things that we could do.
Indeed, Government has responded. There are funds that don’t get talked about enough; for example, there is a fund particularly for museums for capital development and a fund for libraries for capital development. We are distributing that money and there is another round coming up. It is there, but the need, as you rightly say, is high.
Q55 Steve Brine: Going back to the bespoke conversations that you have, I have been into institutions and libraries where I have seen that the heating and lights are on in every room, whether they are being used or not. Technology these days allows smart lighting—smart solutions. Is that being considered?
Dr Henley: Yes, it is. We work with an organisation called—
Q56 Steve Brine: Is that what the bespoke conversation is about?
Dr Henley: It will certainly be one of the things, because environmental sustainability is definitely part of—
Q57 Steve Brine: Sorry, who do you work with?
Dr Henley: We work with an organisation called Julie’s Bicycle. We do a lot of work around environmental sustainability. It is one of the things that we in this country are genuinely world-leading on. A lot of other arts councils come across and look at this work, which is about understanding how organisations can be as environmentally sustainable as possible. It is really important, and it is part of our funding agreements as well.
Pete Massey: It is worth adding that regionally we also support organisations such as Sustainable Arts in Leeds, and the Manchester Arts Sustainability Team. These are collectives of organisations that work together to try to reduce their environmental impact, but they can also collectively negotiate better energy deals and such.
Q58 Steve Brine: Finally, Hat Fair in Winchester—one of the oldest street festivals in Europe—has not been offered investment from the 2023 to 2026 investment programme for the national portfolio organisations. The rejection letter, which I have seen, has an appendix that assesses Hat Fair. Under every one of the Arts Council’s criteria, it is graded as strong; there is not a single negative point. Is it simply that an increase in NPO funding is just not enough if you are to meet the requirements of your new focus?
Dr Henley: I genuinely hope that we will find a way of working with Hat Fair, and funding them through the national portfolio organisations. As you know, I have visited your constituency; I have seen their work, and I know that they do good work. Our south-west team will be working on that. You are right: I think that 24% of our organisations that did not get funding were rated as being strong in some areas, and some rated strong right across the piece. Yes, we had to make difficult decisions. To achieve our objectives, we brought new people into the portfolio and spread the money more, geographically. It was a real challenge.
Q59 Steve Brine: You can meet that challenge by increasing the money, so that everybody wins, or you can spread it thinner; otherwise, some have to lose. What you are saying is that 24% were strong in some areas—perhaps they were strong in every single area—and somebody had to lose.
Dr Henley: That is right.
Q60 Steve Brine: Okay. When you say that you hope that they can focus from the national portfolio organisations in the future, what does that mean? Is there an appeal mechanism or a revaluation?
Dr Henley: The work they are doing is clearly recognised as being excellent.
Steve Brine: I am asking for the 24% as much as for Hat Fair, because they will all be listening to this.
Dr Henley: Of course. For those organisations that have been rated as strong, if they are leaving the portfolio, they can apply for the transition funding for seven months, but they are immediately able to apply for any of our other funding.
Q61 Steve Brine: The project grants, and the other grants.
Dr Henley: Exactly. It will be programme-based funding, rather than core funding; that is the difference. They will have some programmes that they will apply to, and they can make grants on that basis.
Q62 Chair: I want to come on to the talent pipeline. How does your funding affect the pipeline of people in cultural and arts projects, and how do you make decisions about what projects you will fund in those areas?
Dr Henley: For us, the talent pipeline is really important. We are very pleased about the real growth in the number of organisations connecting with children and young people right across the portfolio, in a lot of communities and places. That has been absolutely key to this. Tonya and Pete can give you examples of real-life organisations in their areas that are absolutely focused on children and young people.
We are very keen on understanding employment and skills opportunities. In this portfolio, there is some of that, but we have other funding streams that are working to support that as well. That is about having a skilled workforce, our partnerships with universities and, increasingly, the FE sector. In our sector, FE is doing an awful lot, and we are building more and more partnerships. I often say that on the ground, you will see a local authority, arts organisations and the university working together. Sunderland is an excellent example of this; the University of Sunderland is a key anchor, but you can see it in other places. Look at the work that the Manchester Metropolitan University does bringing their arts school and their digital arts school together. I could list many city-based universities around the country. Organisations that we are funding in this portfolio for the first time are playing that role in the talent pipeline.
Pete Massey: In the north—this is not an organisation that we are funding for the first time, but they have an uplift—there is the Writing Squad, which is based in Stockport. It works with young writers to develop their writing skills, and their success rate is astonishing. Their alumni are now right across pretty much all art forms. They have had work performed on major stages, and some of them even write for opera. They have won a number of literary prizes, and as they progress through their career, I think we will see that the Writing Squad’s early investment in them—that intensive work over a period—will pay dividends for us, and for the creative economy of the country.
Q63 Chair: Are there example down south as well?
Tonya Nelson: Yes. In London, we have invested in three new theatres that are really focused on cultivating talent in the teenage years. They include Zoo Co Creative, Company Three and HighRise. These all work in the outer boroughs of London. They are tapping into young people who might be interested in a career, but may not feel that they have a pathway in. We have started to invest in those types of organisations. Across all the art forms, we have looked very hard at children and young people and the talent pipeline at every single level, including in community-based organisations, which can bring in people who are older but are thinking about a career in the arts.
Dr Henley: The Royal Liverpool Philharmonic orchestra have an In Harmony programme that has been in West Everton for many years. It is really successful. We have invested more money in them to take that to Barrow-in-Furness, so they will take that out further in the north. Opera North do an excellent In Harmony programme, and that is going into Kirklees as well. We are taking established programmes and investing in them. That is an amazing project, based on the El Sistema project. It is a whole way of taking classical music and making it a metaphor for the family unit in an orchestral setting, and it just changes young people’s lives.
Q64 Chair: Does your funding seek to lift up the quality of arts provision in poor areas, or does it focus on trying to make areas that are doing really well, and that have really high-quality arts generation, go even further? Or is it a balance? What do you do?
Dr Henley: I would say it is a mix of the two. It is not always through the national portfolio that we will do that. The Cultural Spring in Sunderland is an example of our Creative People and Places programmes. We have those across the country, and we are growing that; it is a separate body of money. Those are places with really quite low infrastructure at the start and usually very low engagement. We go in with a principle of co-curation. What is important is not a bloke sitting behind a desk in London telling people what they ought to have somewhere. It is about showing people what they can have—that is really important—but at the same time, it is about helping them to develop and own what happens in their place.
When we get it right in those places, we see an increase in National Lottery project grant applications. Artists become professionalised, base their work in those places and tend to coalesce in them, so we then see a more vibrant artistic community and small businesses.
In our world, we talk about freelancers. They are very important, but many of them operate as small businesses as well, as two or three-people organisations, and that is really important in terms of changing the dynamic in a place.
Q65 Damian Green: Thank you for mentioning the triumphant opening of the Jasmin Vardimon ballet company’s new home in Ashford last night. I hope the council will learn lessons from that about the need for long-term determinations; it is 10 years since I had my first meeting with that company. The combination of your sticking with it and Ashford Borough Council and Kent County Council sticking with it has meant that every box has been ticked. There is now top-class, world-class art being created out of London, and a lot of educational opportunities for local people. That is a model of how to do it, so thank you for the help with that.
That brings me to another point. You are now distributing this funding under the broad instruction of, “Spend less in London; spend more outside.” Does “outside London” mean that? Do you meet the terms of the Government’s rubric by moving money from London to the south-east?
Dr Henley: The south-east does count, for us, as an area. We have five areas across the country. London is one of those areas, and there are four others. Our areas are quite broad. Mr Brine’s constituency sits in our south-west area; some people might see that as south-east, but it is our south-west. Our “east” goes all the way up to Great Yarmouth, so it is quite a big area. We take the more traditional part of the south-east.
Yes, it is important. In Kent, we have invested in a really interesting new young people’s programme based in libraries there; funnily enough, I think there is a launch coming up quite soon in your constituency. Those are important. Yes, we do understand that there is central London and outer London, but we absolutely want to see a vibrant cultural world in the outer reaches of London as well; the south-east is an important part of that.
Q66 Damian Green: Would that apply to companies such as the ENO? Could they move out of London to the south-east of England?
Dr Henley: Yes.
Q67 Damian Green: And that would fulfil the terms, would it?
Dr Henley: Yes. As you know, in Kent, there are some more well-off places, but we have Levelling Up for Culture Places in Dover and Medway, for example, which have a tougher economic background. It is a balance, but absolutely, London is London.
Q68 Damian Green: The Turner Contemporary in Margate is a prime example. That is an area where economic regeneration has been led by culture. Looking more widely at the questions that we have been asking, “crisis” is an overused journalistic word, but do you think the arts are in crisis in this country?
Dr Henley: There are always challenges, and at the moment there are economic challenges. I have spent a lot of my life travelling around, meeting artists, going to places and seeing arts organisations, and I see huge creativity and amazing innovation. People who run arts organisations are sometimes characterised as being not that entrepreneurial or not great businesspeople, but I reject that. They are some of the most entrepreneurial people I have met, and I spent my career working in commercial media before I took this job. Some of the most entrepreneurial people I have met are running arts organisations. They are inventive and resilient, particularly in the last few years, when every door was closed.
There are tough challenges, and I don’t want to belittle them—we are talking about change, and I absolutely understand the challenges around that—but there is a lot of opportunity. I am excited about the fact that 276 new organisations have come into our portfolio, so there is a huge possibility there. It is really exciting that they will connect with audiences who may not have connected with publicly funded art before.
This is an ecology. We have our section of the world, but there is a huge amount in the entertainment world and the business world sitting alongside that. We talk a lot about talent; I am certain that people who train in our world often go on to have very successful commercial careers, and then jump back in. You see somebody building a set for a small theatre one day and then working on a “Harry Potter” film the next day. That is really quite exciting for our industry.
Q69 Damian Green: That is a really interesting answer. That burst of enthusiasm suggests to me that the arts are not in crisis in this country.
Dr Henley: I don’t think they are in crisis, no. I think brilliant people are producing brilliant work up and down the country. I do not minimise the challenges. Some of them are economic and some of them have been brought about by the things we have had to face over the last few years because of covid, but there is huge opportunity, and this is a hugely inventive bunch of people.
Q70 Damian Green: Thank you. Can I raise one other issue, which has been in the newspapers this week: the controversy about the grant from the London Community Foundation, which you fund, that was given to the LGB Alliance and then withdrawn? You said that had nothing to do with the Arts Council, but we now read that the grant was withdrawn five days after your deputy chief executive told an online meeting of 400 staff that it was a mistake to have made the funding award. Was it wrong to say that you had nothing to do with it?
Dr Henley: I stand by everything I said to you when we spoke about this last. That was a personal view; that is not the Arts Council’s view. As an organisation, we operate in a way that ensures that everybody who has any protected characteristic is protected and respected. That goes right the way through the organisation, from top to bottom.
Damian Green: Thank you very much.
Q71 Steve Brine: I want to return to my theme of tough choices. £1.57 billion of taxpayers’ money was spent on the Culture Recovery Fund, which, obviously, ACE administered. That money undoubtedly saved some of those organisations from going under. Are you concerned that the tough choices that have to be made now could mean that some of that money was ultimately spent in vain?
Dr Henley: We would work hard to make sure that it was not spent in vain. It was spent in a financial year and at that moment. It is a challenging question. Across both sport and arts, where that money has gone in, there have been changes, so not every organisation would automatically continue to be able to trade. The decisions that were made at the time were made based on the data available and the opportunity at the time. At that stage, I do not think that any of us—I know you are not saying this—had predicted that there would be a war, or the economic challenges, but we made the best possible decisions that we could at that moment.
Q72 Kevin Brennan: I will not go back to the confusing decision you have taken on Welsh National Opera, but I want to pick up on something you said a moment ago, because I think it displays a wrong type of thinking about the arts and creative industries. You mentioned the set builder who might work in the theatre and then on the “Harry Potter” film. Of course, although the Arts Council will not be funding the “Harry Potter” film, it is part of the same ecosystem and will receive significant public support through the film or high-end television tax credits. That attitude—that there is a subsidised arts sector, and a commercial creative industries sector, and that they are two different things—is really muddled thinking. Would you agree?
Dr Henley: I do not think it is two different things. I absolutely see it as one ecosystem. I was merely discussing different funding streams. There are also tax benefits for many of the organisations that we fund; many of the organisations that we have talked about today have significant production tax credits. Forgive me if that is how it came across, but it was not my intention. I absolutely see this as a very fluid and dynamic infrastructure, and as a whole. At different moments, different bits of public funding will kick in; at other moments, there will be no public funding. I think your analysis is absolutely correct.
Kevin Brennan: It is just a pity that you did not see the Welsh National Opera in that holistic way, but there we are. Thank you.
Chair: Thank you, Kevin. That concludes our questioning. I thank Pete Massey, Dr Darren Henley and Tonya Nelson for coming in and talking with us.