United Kingdom/ 6. Financing of culture  

6.1 Short overview

By 2005/06, the budget of the Department for Culture, Media and Sport had increased 60% since 1998/99. During this period, funding for the arts was greatly favoured with an 114% increase. However, in late 2004, DCMS announced a freeze in government spending on the arts for three years, so that funding to Arts Council England would be held at GBP 412 million annually until 2008 (museum funding, on the other hand, received an above inflation rise of 4.4%).

In October 2007, the Treasury's Comprehensive Spending Review (CSR07) indicated 6.6% annual average real growth for the Department for Culture, Media and Sport (DCMS) including planned increase in resource budget from GBP 1.6 billion in 2007-08 to GBP 1.8 billion by 2010-11; and capital expenditure of over GBP 2 billion over the period, including the Department's contribution to venues and supporting infrastructure costs of the 2012 Olympic Games. However, following the election of a new government in 2010, the DCMS will lose 25% of its funding over four years, so that by 2014/15 its budget will be GBP 1.1 million compared with the GBP 1.6 million it actually received in 2010/11.

Following CSR07, Arts Council England's funding was set at GBP 428 million in 2008/09, GBP 443 million in 2009/10 and GBP 467 million in 2010/11. The figure for 2010/11 was subsequently reduced by the previous Labour Government and further reduced by the incoming Coalition Government. Moreover, the new government announced a 29.6% cut to ACE's grant over four years, so that by 2014/15 its grant from DCMS will be GBP 350 million compared with GBP 450 million in 2010/11.

Until recently there were 13 organisations which distributed "good causes" money from the National Lottery Distribution Fund; for the arts, culture and heritage this includes the four Arts Councils, the UK Film Council, Scottish Screen and the Heritage Lottery Fund. By 2009, over GBP 22 billion had been raised for non-Olympic good causes; the arts component of this, by distributing body and number of projects, was as follows:

Table 1:     Total number of National Lottery grants, in GBP as at July 2009

Distributing body

No. of projects

Amount

Arts Council England

37 588

2 539 072 299

Arts Council of Northern Ireland

3 799

107 628 978

Arts Council of Wales

6 605

161 138 814

Scottish Arts Council

9 107

265 108 034

Heritage Lottery Fund

18 197

4 195 237 224

Scottish Screen

808

34 589 254

UK Film Council

8 298

285 989 525

Source:      http://www.lottery.culture.gov.uk
Notes:       Figures extracted from National Lottery in July 2009. Total number of grants awarded and total value of grants awarded since the National Lottery awards started in 1995.

In June 2006, the DCMS confirmed that the shares of the National Lottery for each of the non Olympic good causes would be guaranteed to 2019. An average 28 pence from every pound spent on the Lottery goes to good causes (more information at: http://www.lottery.culture.gov.uk). The shares of the National Lottery Distribution Fund are as follows:

  • health, education, environment, community & charities 50%;
  • arts 16.67%;
  • sports 16.67%; and
  • heritage 16.67%.

It is relevant to note that in 2004 when central government expenditure on the arts in particular was still being increased, there was already evidence that spending by local authorities as a whole was beginning to decline. The situation since then has worsened and, although good data is not readily available, the most recent indicators are that significant reductions are underway or planned in the face of a 27% cutback in the central government allocation of funds to local government. At the end of 2010 there were estimates that more than 250 public libraries in England were threatened with closure, while a number of others were facing reductions in opening hours (public library provision is a statutory responsibility, so it would be difficult for local councils to axe their library services completely). However, several local authorities have announced the complete axing of their arts provision (a non-statutory service).

England is by far the largest recipient of private investment with almost 90% of the UK total.

In Scotland, although the funding of culture has increased, it has not kept pace with the overall increase in Scottish Government spending. In 1997/98, the culture budget was 0.61% of the overall budget, in 2005/06 it was 0.44%. The Scottish Government culture budget increased 39% from 1998/99 to 2005/06. The Scottish Art Council's funding increased by 48% during the same period.

In 2007-08, the Scottish Executive's annual cultural spend increased to GBP 214 million, and Scottish Ministers also pledged an immediate additional GBP 20 million per annum to support the creation of Creative Scotland and its cultural programme. This figure increases significantly when local authority revenue and capital cultural spend is included (in excess of GBP 200 million), of which around 80% originates from central government.

The arts budget of the Department of Culture, Arts & Leisure in Northern Ireland fell from GBP 14 million in 2005/06 to GBP 13.3 million in 2006/07 and GBP 12.7 million in 2007/08. A vocal and well supported campaign by Arts Council of Northern Ireland encouraged the new devolved Northern Ireland Executive to increase the Arts Council grant by GBP 1.7 million in 2008/09. However, the arts were again facing a budget cut for 2011/12 - this time of GBP 4.2 million (equivalent to a real terms reduction of 23%).

Public spending on recreation, culture and religion grew 32% in Wales between 1999-2000 and 2004-2005 (Institute of Public Policy Research North & the Economic and Social Research Council report). The Welsh Assembly had a budget of GBP 14 billion for the period 2007/08, of which GBP 134 million was allocated to culture, the Welsh language and sport. The Welsh Assembly announced a 4% reduction in the arts budget for 2011/12.

In December 2010 the UK Secretary of State for Culture announced the new government's strategy to stimulate philanthropy for the arts. The 10 point plan includes:

  • the introduction from 2011/12 of an GBP 80 million match-funding scheme for arts organisations to develop their fund-raising. The fund is made up of GBP 50 million from the National Lottery over five years and GBP 30 million from the DCMS over four years;
  • an independent review into the culture of giving, to be completed by Spring 2011;
  • the enhancement and sharing of fundraising skills and capacity;
  • support for the long-term development of endowments (this follows two recent DCMS commissioned reports by the Director of the British Museum, on the role endowments could play in museums and galleries and by the Chief Executive of Arts Council England);
  • the encouragement of planned giving (e.g. through legacies);
  • greater recognition of donors for what they do;
  • using digital technology to boost philanthropy; and
  • strengthening links with other sectors in receipt of philanthropy, such as charities and social enterprises.

The government considers these initiatives will help achieve greater coherence in the raising of private funds to complement public expenditure. However, some leading UK philanthropists have expressed doubts about this.


Chapter published: 15-04-2011


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