Arts and the economy

The publication of our second report looking at the scope of Trust and Foundation funding in the arts is a good moment to consider the underlying economic trends in the sector. 

The report shows fairly consistent in-flows of funding from Trusts and Foundations compared to the first report in 2020. There was a significant spike in funding through the Covid-19 pandemic (due in no small part to Garfield Weston releasing an additional £30m), but largely the picture is the same. 

The information in the report is based on data from specific funders who take part, and we know there are likely to be some larger players who are not included. It is also worth noting that every year, some Trusts and Foundations cease to fund (Foyle being a case in point – they were set-up as a 25 year fund which is now drawing to a close). Similarly, new entrants emerge, one being the Julia Rausing Trust, who have recently pledged a future spending of £100 million a year, much of which will go to culture.

Despite this investment, Trusts and Foundations remain a small part of the overall funding landscape for arts and culture – and the health of that broader ecosystem looks shaky. Paul Hamlyn Foundation is one of the larger funders in this space, but we very rarely spend more than £10m a year on arts and arts-education work. 

The main components of sector income are public funding from the various arts councils and publicly funded heritage bodies, local government and regional government funding and consumer/​private income. Of these, we know that local government has been hit particularly hard over the last 15 years, consumer/​private income is highly variable and no doubt impacted by the cost of living squeeze, and Arts Council funding has declined in real terms. 

Set against a backdrop of Covid recovery and vastly increasing costs (as well as challenges raising income from touring among other issues), it starts to look like a perfect storm for leaders trying to balance the books. 

A new government hopefully signals a good moment to reset the conversation about public funding. The new team has spoken of the importance of the sector to economic growth and shown a genuine understanding of the emotional power and necessity of the arts to our national story. But for this to be more than rhetoric, there needs to be an acknowledgment of the sector’s pressures and a credible plan to address them. 

A clear-eyed defence of the reason for public funding in this field and the role of the arm’s length principle is core. When public funding is so tight and the country has been through a bruising election campaign with such a focus on taxpayer money, we can’t assume that all voters or politicians see public funding of the arts as a given. 

Part of making this case is also acknowledging that it is not the role of government to solve all sector challenges and willingness to adapt, work together, and find ways to invest in planning for the future will all be necessary.

Paul Hamlyn Foundation has been supporting the Centre for Cultural Value for the last five years. Their report looking at the impact of Covid-19 highlighted the fact that the story of the financial shape of the sector has a choice of possible endings:

I would hope that most of us would agree that the second story arc is the preferred one, but we should not underestimate the capacity required to bring this about – the thinking time, the convening, the investment in leadership and learning. 

Alongside investment in the core of arts and culture support, we also need to see investment in the programmes and networks that might enable more transformative culture change. 

We are also supporting the Citizens in Culture work in the South West, and our main interest here is to see how people can be more authenticity involved in decision making. 

Situating people in the story of how we think about the progress of the sector, particularly in the context of public funding (but also wider trends that will determine current and future engagement), is an element that can get forgotten in discussions about funding which often get stuck circling around Arts Council settlements.

Our report shows that Trusts and Foundations do play a very particular role in giving a very large number of very small grants to a range of organisations, many of whom are small in turnover.

Funders like us operate best when we can support innovation, recognise new forms of practice and raise-up different voices and ideas into the space. This aspiration unravels if the underpinning of the sector is weakened by the retreat of public funding. We know that our fund is hugely over subscribed and our part of the funding ecology cannot replace a fair and robust cultural infrastructure that works for everyone.

Our vision is for a just future where everyone, especially young people, can thrive. The arts are crucial to this not only because, for many of us, they make life worth living, but also because they foster the conditions where people can dream, imagine other possibilities and find the courage to ask complicated questions and contemplate things which can be hard to confront. 

These factors are part of how as a society we step with confidence into a very complicated future, fraught with existential challenges. Therefore the health of the sector is an issue that impacts society as a whole and cannot be left to chance.