TUESDAY 27 JANUARY 2004

ARTS COUNCIL ENGLAND

  Chairman: Good morning. We would like to welcome you here today. May I take the opportunity of mentioning that I have had a letter from Gerry Robinson apologising for not being here. I would like therefore to take this opportunity of saying how much certainly I appreciate the work that Gerry Robinson did while he was at the Arts Council. I think that in many ways he transformed it and for the better. (That is no reflection, of course, on the permanent officials of the Arts Council.) Alan Keen.

  Q203  Alan Keen: Thank you, Chairman. The lottery income has been declining, and it looks as if that may continue. How do you cope with that? Especially when the Arts Council has a lot of core capital city projects, how do you cope with a reduction coming in, when you have to look after the provinces as well?

  Mr Hewitt: We receive from the DCMS, on a regular basis, forecasts on lottery income and they give us in general what they describe as a high forecast, medium forecast and a low forecast. The Arts Council's policy in general is to believe in the medium forecast—and, I have to say, in general the medium forecast has proved to be reasonably accurate. We have a very careful cash-flow projection system which we have put in place. We are thereby able to ensure that we know exactly how much money we have available for distribution looking quite well into the future. We update it on a regular basis; the mechanics are all there. However, obviously income is reducing and that is unfortunate. There is always much more we would like to do, but, even still, the lottery resources we get are sizeable and they are very, very important to the work of the Arts Council. We do use our lottery resources and our Grant in Aid resources very much together. I think that is one of the important advantages, if I may say, that the Arts Council enjoys, and together we plan for the arts in a systematic and careful way to ensure that we are not tripped up by any reductions on the lottery side in future years.

  Q204  Alan Keen: With regards to the Olympics, which appears to be going to take some income away from the Arts Council, what are your forecasts on that? Are you really concerned about it?

  Mr Hewitt: The information we have been given recently from the DCMS suggests that for the years 2005 to 2009 there will be a relatively small decrease in lottery income, about £4 million a year, but potentially increasing quite substantially after 2009, as we head towards 2012. That certainly is of concern to us. The Arts Council's view on the Olympics ambition and the financial implications of that are perhaps most simply put in this way: We do acknowledge that there will be a reduction in terms of "good cause income" as a result of the new Olympics game; however, we think it is very, very important—and I think the people leading the Olympic bid and the Government recognise this—that arts and culture are part of the Olympics ideal. We want to be in there, making a case for resources from the Olympic games—after all, if you take the Olympiad ideal in general terms, it has to involve both sport and culture. We want to ensure that in net terms the arts in this country are hopefully net gainers rather than net losers from what might come out of the Olympics experience.

  Q205  Alan Keen: You have answered part of the question I was going to ask you. I know it is early days, there is planning needed, particularly with the resources that are required, but has DCMS or the Government in any way discussed with you what you think you might be able to contribute and what is needed for the Olympics as far as culture and the arts are concerned?

  Mr Hewitt: Yes, they have. From the very first day that the Olympics was announced, I made the case to the Government that it would be very easy to focus just on sport but we need to ensure that culture is right in there. I am very pleased to say that there are signs that the bid company is about to establish a cultural group with a culture chair to take forward those ideas and to build the culture bid right into the programme. As I am sure many of you will know from previous sporting occasions, sometimes we have been rather late in coming to the cultural dimension. For example, although the cultural part of the Commonwealth Games was fantastic in the end, we actually got there quite late, and there have been previous sporting occasions when we have hardly got there at all. I am really urging the Government to make sure we are in there now talking about culture. I also see a real opportunity in hopefully bridging from the Capital of Culture Experience in Liverpool in 2008 through to 2012, so we build over those four years a cultural programme so that by the time we get to 2012 we have something of real excitement and scale and value for the public.

  Q206  Chris Bryant: Just following on those elements, the Olympic bid of course is for London. Is this going to be a London cultural dimension? You are bridging the gap from Liverpool to London. I am not sure whether this is a new physical entity.

  Mr Hewitt: Of course the Olympic bid will be branded on London, but I think everybody acknowledges that it needs to be a UK experience. Some of the sporting activities are intended to take place outside of London, I understand, but certainly in cultural terms there needs to be a major cultural festival and set of activities in London but also activities right throughout the country. I know from talking to colleagues from our own organisation in the different regions, we are very, very geared up to ensure that it is a genuine UK celebration, because people will travel outside London and we will be in the world's eye. I think the country as a whole has the opportunity to benefit from this.

  Q207  Chris Bryant: Was that true of Barcelona? Was it not really just Barcelona and Catalonia that benefited? Atlanta.

  Mr Hewitt: Different countries have taken different approaches. Certainly, in the case of Atlanta it was very much just about Atlanta, but that may say something about the nature of the United States, or Atlanta within Georgia. It is probably also right that in the case of Barcelona—I do not know, I am surmising—it may be something to do with the particular regional dimension of Catalonia and Barcelona within it, but in its relationship with the rest of Spain it may have been something a bit more to do with Barcelona. Here, with it being potentially the capital city, I think we have a responsibility to ensure that all the regions of the country can have a relationship with this, what I hope will be an extraordinary, exciting event in the capital city and outside.

  Q208  Chris Bryant: I have this picture of you being bled for money to run the Olympics and then on top of that you are going to bleed all your other programmes to put money into an Olympics cultural programme. Then all the major organisations in the country and all the small theatres around the country are going to say, "Hang on, what's happened to us?"

  Mr Hewitt: I understand that potential danger. That is absolutely not what we would allow to happen or, I am sure, what our regions would allow to happen. They are very, very conscious of what is important to their own villages, towns and cities and their own people, and they are also very conscious of: "If we do engage with the Olympics in this way, engage in a way whereby there is a permanent legacy not just in London but elsewhere." So I know that the plans will not be just about putting loads of money into a one-off festival in London and elsewhere; it will be: "How can we use this experience to build the cultural provision in general in this country and take it to a further stage?"

  Q209  Chairman: The more questioning has proceeded, and in the group of organisations who were here before you, it would appear that, if anyone by chance was sceptical about the Olympic bid, they might say that there is a danger that the Olympic bid will (a) bleed you of your core money for which you have a great many clients and applicants and (b) breach the additionality principle by bleeding you of lottery money as well. Could you tell me whether I am right or wrong, that, if I were a sceptic about the Olympic bid, I might have justice on my side?

  Mr Hewitt: I would say that there is no danger of the Olympics bleeding the Arts Council of its, if you like, tax-based funding. I am quite sure that we will ensure that continues to provide for the arts on an ongoing basis in the way that we always have. In terms of lottery and additionality, self-evidently the new lottery Olympics game will take money away from the good causes. Self-evidently, from the proposals put forward by Government, there is the opportunity for them to move money between the Olympics distribution fund and the general National Lottery distribution fund in future years, so certainly there is a threat there. I think the approach that we have to take is that we want to ensure that we are net winners and not net losers. But, to come back to the additionality point, I suppose those who might counter the point that you, Chairman, have just put, might say, "Well, the Olympics in itself is an additional event. It is a one-off. Even now we do not know whether it is going to happen—it may not happen. It is genuinely additional, if it happens. Therefore, as an extraordinary, one-off, special additional event, perhaps there is an argument"—and I am not necessarily saying this is my argument—"to say that therefore additional resources might be found in this case from the lottery."

  Q210  Chairman: But it was mentioned earlier on—and perhaps you were here when it was—that there is a possibility that the Olympic lottery game will start later this year, which is ahead of any decision on the bid.

  Mr Hewitt: I have heard that there is some speculation about that. My understanding is—as Stephen Dunmore said—that that is very unlikely. In fact, I believe that within the Olympics regulations the Olympics organisers or Camelot would be prohibited from introducing a game until the decision is taken in the summer of 2005. That is my understanding of the true situation.

  Chairman: Chris.

  Q211  Chris Bryant: Thank you. Could I move direction a bit, to talk about devolution. You are England, I know, but I wonder how closely you work with Wales, Scotland and, for that matter, Northern Ireland, not least because some of the major elite organisations of the country must surely have some kind of responsibility not just within the individual home countries.

  Mr Hewitt: Yes, indeed. We do work very closely. I chair a coming together of the Arts Councils from the various countries on a regular basis. We carry out various pieces of work together. For example, recently we have agreed to extend our resources for touring in such a way that we can break down some of the previous very unfortunate barriers that existed.

  Q212  Chris Bryant: The Royal Shakespeare Company, I think, was not visiting Wales at all.

  Mr Hewitt: Exactly. Of course, it works both ways: we also put money into Welsh National Opera to come into England. So we try to avoid the nonsenses that can exist around these boundaries in those areas such as touring and we do talk regularly with the other Arts Councils.

  Q213  Chris Bryant: The amount of money which goes to the Welsh Arts Council and Scotland is determined. That is fixed. Do you do regional distribution in the same way, that it is fixed within the different regions within England?

  Mr Hewitt: Yes. It varies slightly between programmes but for our Grants for the Arts programme, which is the programme which assists particularly local activity projects, initiatives at local level throughout the country, we distribute that through the nine English regions according to a formula based partly on population, partly on deprivation indices and partly on physical scale of the regions. So, yes, that is allocation—

  Q214  Chris Bryant: I will ask you the same question I asked the previous witnesses then. So, especially in the arts, I guess it would be quite easy: you dollop out the chunk of money according to these factors to London but all of it gets spent in Covent Garden. None of it gets spent in Hackney?

  Mr Hewitt: Well—

  Q215  Chris Bryant: That is a question actually. It sounded like a statement, but I was not meaning it that way?

  Mr Hewitt: If I can relate it to London or to any of the other regions, we do have regional offices, previously regional arts boards, who have worked on—are historically very conscious of the needs of different parts of their region and very aware of social issues and deprivation issues in terms of the distribution of their money. So those organisations do ensure at regional level that a good degree of equitability is delivered. Our record over the years—of course it can always be improved, but our record in terms of lottery distribution, I think, is reasonably good. For example, more than half of our capital funding has gone to the 99 most deprived local authorities in England, and we have worked very hard to ensure that within those local authorities—for example, let us take Islington, it does not just go to Saddlers Wells, but goes to those parts of Islington where there is genuine deprivation.

  Q216  Chris Bryant: But former mining constituencies have done particularly badly on arts allocations, falling from something like 28% to 24% of the national average. It is actually getting worse rather than better?

  Mr Hewitt: In the case of the Coalfields Communities, the information I have been given is that we have put £37 million into the Coalfields, and there are some places, for example, Barnsley, Doncaster, Rotherham, where we have done a lot, put about £500,000 into that area. I would, however, acknowledge that there is more to be done in funding in the Coalfields area, and it is part of our—one of our priority areas.

  Q217  Chris Bryant: The youth theatre and youth music—I have a slight interest in that as I am an Associate of the National Youth Theatre. I am not specifically asking about it, but youth theatre and music, because much of this happens through schools, is potentially in the area of—the additionality area. How do you resolve that debate and discussion, or is youth theatre and youth music rather the Cinderella for you?

  Mr Hewitt: Would you mind if I invite Pauline, who is a specialist in that area, to answer that question?

  Mrs Tambling: We have done quite a lot over the last two years, specifically in the area of youth work and youth organisations, not least because there is a sort of relationship with the Department for Education and Skills. Historically these organisations have fallen between the cracks of the two sectors with our side saying it is education and the other side saying it is arts. What we have managed to do over the last couple of years, not least because we have the existence of our delegate distributor in Youth Music, we have been able to bridge the gap there. We have increased our allocations to all the national youth organisations. We are working with the DfES very closely so that we can manage this relationship between what we can do through lottery and what we can do through grant-in-aid; because it is absolutely essential that we do not take lottery money and give to those organisations if there is a legitimate case for some of the work they are doing happening through DfES funding. We are working very closely with them and so initiatives like the music manifesto, initiatives like the new youth fund that is coming on stream—we would want to play an active part in making sure those organisations benefit from those activities.

  Q218  Derek Wyatt: Good morning. I was interested about your potential for the Olympics. When Baron de Coubertin created the Olympics there were gold medals for art, there were gold medals for literature. Actually he won with one of his books—I expect he was the judge as well, but he did put one of his dreadful novels up, which I tried to read in French (as I failed) some years ago. I wondered whether you had contemplated doing something similar in actually bringing back, if you like, not the Nobel Prize for Literature, but something that actually could add to the dimension of the Olympics and give us a bigger bid than perhaps we can contemplate at the moment.

  Mr Hewitt: I think it is a very interesting idea. The Arts Council does involve itself in a number of prizes and awards at the present time. In fact we have been taking a fresh look at that recently. In my conversations about the Olympics this very idea has come up in sport simply because it is competitive and it can show people on the podium first, second and third. That gives it some kind of presence and a profile, which sometimes in the arts we do not always achieve because we have things like the Oscars and all those awards, but I think the question of an awards-based approach to excellence in culture alongside the sporting dimension of the Olympics is a very important one which we should take forward in our more detailed planning.

  Q219  Derek Wyatt: With Sporting England they have had a very profound rethink with respect to the amount of money that has gone into sport over the last 10 years, in the sense that, although, I think it is £1.6 billion, it has only increased participation by 0.3%. Do you have similar figures? In other words, if you spent more money on providing facilities, would participation be down or up? Can you tell us what you have on that sort of area?

  Mr Hewitt: I think there is no question whatsoever that participation in the arts and opportunities for participation have increased hugely over the last, I would say, 10, 15 years. The lottery has played a really, really important part in that, because it has allowed us to get to local level through things like Awards for All, through things like our Community Buildings programme which we are doing in the West Midlands at the present time. The entire thrust of our local lottery funding has been about participation and engagement at that level, so I think it has been a massive contributor to active opportunity for people in the arts. I am sure the lottery has been so. It is quite difficult to put a very specific figure on participation because very often we give grants to a whole range of arts organisations on an on-going basis and they do a mixture of what you might call spectator experiences and participatory experiences; and they do actively try and blur the division as far as they are able to, but I am in no doubt at all that the lottery has been a really major contributor to enhancing opportunities for participation.

  Mrs Tambling: In the last two years we have been running an omnibus survey to check participation in the arts and people's views on participation in the arts, and we have now two years worth of data on that which we could certainly send you as a follow up to this hearing.