Philanthropists could be heroes after West Midlands arts funding is slashed

Jul 16 2010 By Kat Keogh

As the Government prepares to slash arts funding, Kat Keogh looks at how West Midlands groups will cope with the cuts and asks if help from philanthropists is the answer.

It may not have always felt like it, but the early noughties was a boom time for the cultural sector.

With record investment from the Government and soaring levels of private sector support injecting millions into arts organisations, our creative industries were worth about £60 billion nationally.

Then came the credit crunch, and private investment in arts and culture fell by 25 per cent in the West Midlands as the recession took hold.

In May, Arts Council England announced that all regularly-funded organisations will receive a 0.5 per cent cut in their annual funding, which will see £243,000 shaved off a combined annual Midlands budget of £48.6 million.

Among those hardest hit is Birmingham Royal Ballet, which will see its funding cut by more than £41,000 to £8.2 million, and the Royal Shakespeare Company (RSC) will also lose £80,000 as its 2010/11 funding is reduced to
£16 million.

Warning shots have already been fired by the Government that more painful cuts are on their way, and this week Birmingham City Council officials warned arts organisations across the city to prepare for drastic cuts next year.

Martin Mullaney, the cabinet member for leisure, sport and culture, said funds for subsidising the city’s arts groups have already been cut by £326,000 this year, but the precise scale of cutbacks would not be clear until Ministers publish a public spending review just before Christmas. He said: “All arts organisations are mindful of the current economic situation and they expect money to be tight.”

So just how are the region’s arts organisations planning to stay afloat? At present, most organisations rely on a mixed economy of Government subsidy, private donations and business sponsorship.

According to new Culture Secretary Jeremy Hunt, the answer may lie across the Atlantic.

In a keynote speech in the run up to last month’s emergency Budget, Mr Hunt exposed the virtues of an American-style culture of philanthropy, where cash from individual donors and business counts for a major source of income for fine arts and performing arts in the US.

Mr Hunt said: “I believe we can do much more to strengthen philanthropy in the cultural sector.

“Where it can work I want it to work as well as possible. I particularly want to help smaller organisations to help themselves.”

Mr Hunt added the Government would work to build a similar culture of philanthropy by encouraging tax breaks on lifetime giving.

“It would be good for society if giving were a cultural norm,” he said.

So could borrowing the American model of philanthropy work in the UK? Private investment “has to be” a growth area, according to Christopher Barron, chief executive of Birmingham Royal Ballet.

The BRB currently relies on public funding for 69 per cent of its annual turnover, but enjoys support from companies including Cadbury, American Airline and the Bullring.

The company will be touring a production of Romeo and Juliet in the autumn before embarking on a new version of Cinderella in November to mark its 20th anniversary year.

“We have probably have had a bit of a head start because we have been looking to the private sector as a source of income for some time now, and it is a key source,” Mr Barron explained. “But that is not to say that cuts to local authority and central government sources are not a cause for concern. We have to look towards 2011/12, where these cuts will have an impact on operations.”

Philanthropy may be seen as a way to plug the hole left by public funding, but it may not be the sticking plaster Mr Hunt’s government is looking for.

Funding from private and corporate sources fell by more than £5 million to £18.9 million in the region for the year to April 2009 and experts predict the decline will continue.

According to analysis from Arts & Business, an organisation which marries sponsors with arts organisations, business investment in the Midlands fell by 16 per cent, to £7.3 million, funding from trusts and foundations decreased by 36 per cent to £5.7 million and donations from individuals by 23 per cent, to £6 million.

The fall in the Midlands was way above the national picture, where business investment fell by six per cent, to £157 million, and donations from individuals by seven per cent, to £363 million.

Mr Barron added that despite the private sector being a place to help plug the gap, arts organisations will have to be ready for “self-help”.