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AD:UK Local Authority Arts Investment Survey Report 2014

LogoArts Development UK are pleased to announce the release of our eleventh consecutive tenth annual local authority arts investment survey, undertaken to assess the level of arts investment for 2014/15. The survey was undertaken in spring/summer 2014 to assess the level of arts spending forecast for 2014/15 with an online survey sent to all authorities in England and Wales. 65 responses were received, representing 27% of all authorities in England and Wales with an arts service, a comparable response rate to the survey response in 2013. The survey shows continued and significant changes to budgets in local authority arts spending. Out of 353 authorities in England and 22 in Wales, and as of August 2014, 136 local authorities have no dedicated arts officer and have no direct arts service. This represents 36.2% of all authorities in England and Wales. The remaining 63.8% have services that are vulnerable to cuts and like the rest of the local authority cultural sector the majority are operating in reduced financial circumstances.

A full version of the report is available here: ADUK LA Arts Investment Survey Report 27-8-14

As in 2013, the Survey is again in association with Arts Council of Wales and demonstrates AD:UK’s growing relationship with local authorities in Wales as well as England, and delivering our ambition to broaden the membership and our activities in both countries. The survey has enabled a comparison of past trends and focussed on relevant contemporary issues such as financial issues, priority targets, partnerships and the relationship with other bodies including the Arts Councils in England and Wales. Responses to the 2014 survey reveal a challenging picture of the arts in local communities.

Jane Wilson, Chair of AD:UK stated: “The continuing pattern of change, as more and more authorities outsource services and re-purpose remaining staff into more general roles, highlights the increasing need to consider how these new patterns of operation will effect capacity to understand and plan for local cultural needs over the long term.”

Tony Witton, Arts & Cultural Services Manager with Kent County Council and Chair of AD:UK’s Research and Advocacy Working Party & Trustee comments: “This year’s survey is showing a marked increase in collaborative working which is drawing money in from other sectors such as health, education and regeneration. There is a danger that this is masking the true situation and we should be preparing ourselves for a seismic shift in next year’s figures. On the other hand, we may be looking at a new trend which will see levels of investment in the arts maintained or perhaps begin to grow as local authorities support the sector to broaden its funding base and become more business-like.”

1. EXECUTIVE SUMMARY
The survey continues to be important and we are pleased that so many people took the time despite shortages of staff and time. The 2014 survey shows what is important to arts services currently provided by local authorities with the main summary of findings as below :

• The total estimated spend in England and Wales on arts services for 2014/15 is £194,458,050. The landscape is changing with several authorities losing their arts service this year and a reduction in the number of smaller authorities able to take part in the survey. Arts spend per head of population in 2014/15 is estimated at £2.41 per person.
• The average projected local authority budget for arts spending in responding authorities in 2014/15 is £813,632, only slightly changed from the 2013/14 actual figure of £849,903. After the large increase from 2012/13, which was mainly caused by the effect of the Cultural Olympiad on budgets in 2012, things seem to have settled somewhat, with a slight downward trend. Authorities participating in the 2014 survey are projecting a reduction of 4.3% in their arts budgets from 2013/14 to 2014/15, and if inflation (2%) is taken into account, this loss is nearer 6.7%.
• Partnership working has increased in comparison to the previous year. There has been a further decline in internal partnerships, which is attributed to the steady decline in overall local authority funding. External partnerships have substantially increased with 90% of authorities demonstrating partnership working and showing the need to be outward facing and to work collectively to support local communities, and perhaps demonstrating that confidence in the economy in the UK is on the upturn. There are demonstrably increased partnership trends from the commercial and educational sectors in returns for 2014, and especially with regeneration agencies. All other partnership areas are increasing with the exception of creative industries, which is broadly comparable to the previous year.
• Local authorities are significant funders of independent arts organisations, especially in areas with little or no NPO/RFO provision by ACE or ACW and support for non-RFO/NPO arts organisations accounts for up to 9% of total arts spend. The average spending to RFO/NPO regularly funded organisations in partnership with ACE and ACW accounts for 51% of the total arts spend, an increase of 3% on the last financial year, demonstrating the active partnership between local authorities and the Arts Councils in England and Wales.
• Arts contribute to public service outcomes, with 96% of respondents stating that their arts services contribute to health and wellbeing outcomes; 96% stated that they contribute to stronger and safer communities; 88% contributing to equality and exclusion, and 90% contributing to education & child services. An estimated 74% or arts budget is spent delivering public service and wellbeing outcomes.
• Spending on staff costs has declined by 5.8% to 33.9% of the total budget; this is set against the reduction in spending on directly managed services and the move towards contracting out.
• It is estimated at present that nearly 2,100 establishment posts (FTE) are directly employed in arts services by local authorities. This compares with an estimated 5,600 staff members recorded in 2008/9. Of 59 authorities responding, the average number of officers employed is 8.7 people per authority; an average of 2.5 (29%) of those have job descriptions that include Arts Policy or Arts Development work in their remit. The median number of arts service staff per authority is 1 (FTE), a clear shift from the median range of 2-3 (FTE) that was reported in the 2013/14 survey, demonstrating that there are a large number of authorities with just one establishment post. It should however also be noted that quite a few smaller authorities employ part-time officers.
• Responses to job security showed that this is still a period of instability for the arts in local government, with at least 10% of those under threat of closure.
• There are still a high number of respondents expecting redundancies: 22% in 2014/15 and 29% in 2015/16. Reasons given for this include being uncertainty about the future, changing structure and changing status.
• 70% of local authorities taking part recorded a funding decrease with a further 17% reporting standstill. The move to contracting out services continues to increase with 18% of authorities reporting that they have contracted their services to a third party organisation, increasing from the 7% reported in the previous year’s survey. Of those respondents whose service is in the process of being contracted out 89% favoured a local service contractor to carry out the work.
• 42% of all arts and cultural services have been restructured in the last 2 years. Of those that responded positively, 70% had moved to a different department and the majority of those who responded felt that this had made their service less vulnerable to cuts. Whilst restructuring continues to take place, there is evidence that this continues to make respondents feel more confident about their positions in the future.
• The relationship between local authorities and ACE/ACW is improving with 47% of respondents stating that it was active and developing. 7% stated that they had negative or receding relationships however, and 16% stated that they had no relationship with their regional office. 27% stated that they were experiencing les contact due to time constraints: either their own or with ACE/ACW officers.
• Local authority financial support from lottery funding from ACE and ACW is declining, with an average of £45,279 per authority. 46% reported that they had received no funding at all from their Arts Council. The figure shows a marked decline in ACE/ACW funding from previous years.
• However, the total amount of core funding have increased from previous years with 9 authorities receiving a total of £3,086,760 in 2013/14, an overall average of £93,538. This situation showed improvement from the previous year with much of the funding supporting NPOs.

The overall the picture of local government funding for the arts is one of consolidation, but with more cuts anticipated in 2015/16 as local authority funding continues to decline and with increasing competition from other statutory and non-statutory services. Arts services are no different to other cultural services provided either directly or indirectly by authorities and the downturn in the economy over the last four or five years has enforced major changes to the cultural landscape.

From comparison of the last 2 years of survey responses, the sector is relatively stable but this may mask major concerns as most of the cuts have been targeted at lower level project funding and back office costs in both LA and at ACE. What the sector is lacking is the higher risk speculative projects that would get artists started on their journeys. The learning obtained on these projects has often laid the foundations for future work and ideas which have led to established arts practise and professional standards.

Local authorities are significant funders of independent arts organisations, especially in areas with little or no NPO/RFO provision by ACE or ACW and support for non-RFO/NPO arts organisations accounts for up to 10% of total arts spend. The average spending to RFO/NPO regularly funded organisations in partnership with ACE and ACW accounts for 51% of the total arts spend, and increase of 3% on the last financial year, and demonstrating the active partnership between local authorities and the Arts Councils in England and Wales. The increase in % of total arts spend on NPOs could be a sign of local authorities becoming more risk averse when looking at arts investment. Whilst this could speak to an alignment of priorities between ACE/ACW, it could demonstrate local authorities more willing to continue to invest in tried and tested arts delivery organisations which could stifle future growth and innovation.

Evidence from respondent authorities in 2014 survey suggest that there has been a further period of consolidation to arts funding compared to the major cuts felt in 2011 and 2012, but the down-trend continues with a further reduction in arts budgets of 4.7% from 2013/14 to 2014/15. With the country heading to a central government election in 2015, the position remains uncertain, although in the short term is unlikely to change.

As with previous years, the trend continues for major internal reorganisation, and an increase in more non-specific cultural services (combining arts services with other services such as regeneration or wider community services such as libraries, museums and tourism) indicating a loss of specialism within the arts. Re-organisation does however seem to offer greater resilience and security for arts services with over 79% of respondents commenting that they saw the arts services less vulnerable as a result of re-organisation as the arts continue to perform strongly against corporate objectives.

It is pleasing to see that levels of partnership have increased demonstrating the worth of partnership working, both internal to the authority with other departments and services and also in more lucrative external partnerships. There is continued pressure on local authority arts services to bring in more funding as intensive forms of economic indicators are used and the pressure to bring in more partnership and leverage funding is often an additional pressure on already reduced services.

More worrying is the loss of the impact of major projects including the Cultural Olympiad. It is clear that for some authorities, Cultural Olympiad funding had a legacy effect in 2013/14, helping to offset some of the effects of the continuing downturn in local authority finances. This has not however transferred into 2014/15, so the “safety net” that some authority arts services experienced to help maintain basic services has now been lost, leaving arts services open to the full effects of financial reductions.

2014/15 is the fourth year under the coalition government’s financial settlement and the survey demonstrates that, after a major funding shortfall in 2011/12 that resulted in many closures, we continue to see efforts to maintain short term stability and consolidation. However, the continued economic climate that we all work has resulted in extreme financial pressure to all local authority services. The full extent of the impact the recession on arts services by the recession will need to monitored year on year as will the impact of the move towards outsourcing and alternative means of service delivery revealed by the survey.