Constitution, Europe, External Affairs and Culture Committee

Meeting date: Thursday, September 22, 2022

Official Report 635KB pdf

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Pre-budget Scrutiny

Under item 2, we will begin to take evidence as part of our pre-budget scrutiny on the culture spending portfolio. I welcome to the committee meeting Jim Hollington, who is chief executive of Dance Base; David Avery, who is negotiations officer at Prospect; Kirsty Cumming, who is chief executive of Community Leisure UK; Julia Amour, who is director of Festivals Edinburgh; and Janet Archer, who is chief executive of Edinburgh Printmakers and who is attending on behalf of Scotland’s Workshops.

I will start with a question on the cost of living crisis. We have received a great deal of evidence that has highlighted significant concerns about the increased operating costs that cultural organisations face, and it would be useful to hear what impact the crisis has had on the witnesses’ areas of interest. What can the Scottish Government do in its budget to support the culture sector during the cost of living crisis? The question goes first to Mr Hollington.

Thank you for inviting me to the meeting. As I mentioned in our written evidence, the crisis has had a pretty serious effect on us, as well as on many other organisations. I should preface my answer by saying that we are not arguing that we are different to others. The crisis is so universal that we are reflecting on things that many different organisations are feeling.

The situation for organisations such as ours is, in many ways, a perfect storm of rapidly and unexpectedly increased costs and reduced income. If we look at the cost side, things have moved on and they are moving on every day but, in relation to the energy price increase for the organisation, we come out of our fixed energy deal at the end of January. Again, different organisations have different deals with their energy providers. Yesterday’s announcement might not be quite as good as it seemed, because the rates that are being talked about are wholesale rates, and our suppliers will be able to add extra costs on top of that. Therefore, our energy bill will still increase from about £35,000 a year to probably £90,000 or £100,000 a year. That is better than the £160,000 a year that we were looking at without any support, so the support will certainly make a big difference. However, if we also have a nine or 10 per cent increase in salaries and other bills, that means that about £150,000 of unexpected and unplanned costs will rapidly come in for an organisation that has a turnover of about £1.2 million.

There are also real pressures on the income side. Dance Base’s income is largely from three areas. About one third is core funding. Creative Scotland, which is our major core funder, is clear that the core funding for next year will be at current levels while a process is gone through to determine what happens in 2024. The City of Edinburgh Council has similarly committed to provide the same level of funding next year, but not more than that.

The second part of our financial model—again, it is about a third—is dance classes and performances. They are not people’s core spending. We put our prices up substantially after Covid to reflect increased costs. Realistically, in a situation in which people’s discretionary spending is really under pressure, it is pretty difficult to imagine that that market will perform well over the next few months. Along with other cultural organisations that run performances, we have seen about a 20 per cent decline on our targets for participants in dance classes. Most cultural organisations are looking at similar numbers for paid activity.

The third area is all kinds of fundraising, whether through trusts and foundations, individual giving or project work. We are actively pursuing such fundraising, but many people are very actively pursuing it at the moment. During the Covid period, many funders, including trusts and foundations, switched to short-term, emergency, rather than longer-term, funding.

There are two things that Government can do. One is to acknowledge that there is a longer-term issue underneath the situation. One of the reasons that I moved to Scotland after having worked for the British Council in countries around the world is because Scotland is seen as valuing the role that culture has to play in the country—the commitment from Government is clear about that. That refers not just to culture’s intrinsic role but to how it can help people to live healthy and happy lives. However, there is a mismatch between that really clear commitment and the way that culture has been supported over the past decade or so.

The reality is that funding has not followed the commitment. In fact, along with most cultural institutions, our level of core funding from Creative Scotland has been static for 11 years. Obviously, in real terms, that is pretty tough. If we believe in the value of culture, there must also be an understanding that we need to fund the sector properly or, if we have an envelope that cannot be expanded, we must understand that we might need to have slightly fewer ambitions than we have currently to ensure that we have a sector that works properly.

The second thing that the Government can do concerns how we support arts and culture to deliver health and wellbeing benefits for people. A lot of the evidence has been about that. There has been an enormous amount of evidence and discussion about how arts and cultural interventions at an early stage are really effective not only in preventing issues but in taking people out of medicalised environments after they have had treatment. However, both sides of the equation are looking to the other for funding. The cultural sector sees health and social care funding as potential support for doing more meaningful work, while the health and social care sector says that using culture is a way of relieving some of its budgets. There are a lot of really positive words, but we have yet to see a way for the health and social care sector and the cultural sector to work together to access support.

I thank the committee for inviting me to be here today. I will name check the organisations in Scotland’s Workshops. They are: Peacock Visual Arts, Edinburgh Sculpture Workshop, the Scottish Sculpture Workshop in Lumsden in Aberdeenshire, Glasgow Sculpture Studios, Edinburgh Printmakers, Glasgow Print Studio, Stills in Edinburgh, Street Level Photoworks, Highland Print Studio in Inverness, Dundee Contemporary Arts and North Lands Creative glass workshop, which is in Caithness. For your reference, I point out that Edinburgh Printmakers now works in meanwhile spaces in Aberdeen, Lanarkshire, Dumfries, Livingston, Grangemouth, Kilmarnock, Falkirk, Paisley and Fife, and we are considering Glasgow. Scotland’s Workshops is a strong network of organisations that provide culture services across the country.

I thank the committee and the Scottish Government for the support that they have given us during the most recent period. It has been tremendous and very welcome. It has underpinned our survival, because things are tough at the moment.

There are a lot of ideas in the written submissions to the committee, but here are some things that spring to mind. The first is the tourist levy. Wales is now piloting that, and I think that Scotland should do the same, if it can.

The second is percent for art schemes for developments. Edinburgh Printmakers, as some of you know, is based in Fountainbridge, in Edinburgh. At the moment, we are an island in the middle of a wasteland that is being developed into a new community for the city. If we had benefited from that development in some way and had received more than the sponsorship that the developers offered us privately, it would have helped us hugely during this period.

The third relates to the idea of a whole-system approach. All the submissions said that it is complex to get different parts of the Government to work together, particularly in a competitive environment in which everybody is trying to defend their own case. However, the system in the culture sector is that some bits of money come directly from Government, some come from Creative Scotland and other bits come through local authorities. If a whole-system approach established a matrix that regularly looked at cultural provision across areas of the country and took headline themes such as quality of work, quality of engagement, reach or need, which would mean looking at accounts in relation to where individual organisations are, we could perhaps get to a better place when it comes to how money is distributed.

You mentioned the written submissions to the committee, and I thank you all for those—they were very helpful. I invite David Avery to answer the question.

Thank you for inviting us to this committee meeting. Prospect members work in a range of areas of culture, and the experience of our members who are in the theatre, performing arts and supporting sectors and Bectu experience more or less what Jim Hollington has described.

I will focus on the areas that are directly funded by the Government, such as the national collections, as I do not think that they will be covered by anyone else. They have particularly difficult issues with their budgets at the moment. Their budgets are set by their grant in aid, which is fixed for the next year, but there are pressures from the change in pay policy and the changing costs of utility bills. They are trying to square that circle with the Government, because their income is fixed and their ability to fundraise is very limited. That is because they are Government bodies and are under significant restrictions. Understandably, ministers do not want to reduce service levels, but it is becoming more difficult to square that against increasing costs and pressures around fair work, including pressures to deliver a 35-hour work week and a fair pay rise that comes close to the rate of inflation—those pay talks are on-going. That applies not only for this year but future years.

As well as being Government bodies, those organisations are charities that have legal duties placed on their boards that say that they cannot sign off on costs that they cannot afford in future years. Without some certainty about what funding will look like in future years, it is difficult for them to make decisions around cost of living, fair work and so on without imperilling staff numbers or delivery.

Discussions are on-going, but there needs to be a look at how those organisations deliver their work and how they can plan for the future. In order that they can react to changes such as those that I mentioned, they should either be given more freedom to fundraise and to act like museums and galleries in England do under the museums freedoms scheme, or they should be treated like public bodies and given more funding than they currently receive. They are not allowed to keep reserves from year to year, for example, which is very different to the experience of our members in the charitable sector.

09:00  

We see real challenges in the charitable and natural heritage sector around pay, utilities and costs. We can take the National Trust for Scotland as an example. That organisation lost a lot of staff during the pandemic, as was widely reported. It is still coming out of that and struggling with staff numbers. It now has very large unexpected costs and has the same concerns that Jim Hollington raised about fundraising. It had a very successful “save our Scotland” fundraising campaign during the pandemic but is now rightly concerned about whether similar fundraising campaigns will be as successful when there is a squeeze on household budgets.

My final point is that pay in the sector has never been great. People work in the area because it is a vocation: in many cases, it is their life’s ambition to work with those collections. Our members are telling us that it is becoming harder to be able to afford to do what they want and love to do when salaries are getting worse and costs are going up. I absolutely understand the position that those organisations are in. They cannot afford inflationary pay rises because their budgets simply do not allow that, but for how many years will that continue before people say that they simply cannot afford to work in the sector?

Thank you for the invitation to be here this morning. A lot of the points that previous speakers have made closely fit our perspective and that of our members across Scotland.

I will highlight a couple of areas. Our members’ utility and operating costs have soared beyond any previously expected levels, as is the case across a number of sectors. We are very aware of that. Our members are all charities delivering public services. They used a lot of their reserves to stay solvent during the pandemic, when there was limited financial support for leisure and culture trusts. Local authority support was excellent and those relationships are strong, but there were very limited pockets of national funding, which were targeted at performing arts venues through Creative Scotland. Some of our members were able to access funding, but most relied on local authorities or their own reserves to stay afloat.

Our members are coming out of the pandemic in an already fragile position and are now faced with utility bills and salary costs, as have already been mentioned, that are becoming unaffordable.

This is a timely meeting for us. We had a Scottish members meeting yesterday and the key word was “crisis”. This is a crisis far beyond anything that our members saw during the pandemic, when there was always some light at the end of the tunnel and some hope of a return to normality.

As other witnesses have said, return rates for our members have stagnated at between 70 and 80 per cent of pre-Covid footfall. That includes rates at free-to-access cultural facilities; it is not purely based on paid access. For a lot of our members, particularly on the predominantly free-to-access cultural side, the income model was based on cafes and trading, and it was secondary spending that supported that model. Essentially, that spend has gone. People do not have disposable income and are not returning in the same numbers, so that lifeline of financial support is not there. The model is broken.

That is all set against a context of wanting to do more. We know that there will be a refresh of the culture strategy action plan and are supportive of everything in that, but the reality on the ground is about firefighting and just trying to stay afloat.

Difficult decisions are starting to be made. We know from our members’ projections that a core part of their funding comes from local authority management fees, which are decreasing year on year. We got confirmation yesterday that some of our members will be moving towards zero funding—they have been given a timeline for moving towards zero local authority funding for leisure and culture. That will radically change the delivery of those services. They will move to a commercial model, and a lot of the outreach, the health and wellbeing work and the free activities will have to be cut, because there is no way to finance them. We are looking at quite a different reality if that comes to fruition, and our members are being told that the timeline for that cut to come into force is five years. We will see a different landscape across Scotland at that point.

We are also concerned about the connection between culture and health and wellbeing, which has already been touched on. What will be the health and wellbeing impacts if services close? I think that we are going to see some of that this winter. We know that libraries are under particular pressure, and there have been reviews of library opening hours because there is no income from those services and there is no funding to support operations at full capacity through the winter. For us, that is an alarm bell, because those are safe, warm spaces that people can access free of charge. If libraries have their hours restricted or are closed temporarily, that will have a significant impact on the health and wellbeing of communities. We have already seen that some swimming pools in Scotland are choosing to close because of energy costs over the winter, and we think that that will continue across into some cultural facilities.

Jim Hollington talked about a perfect storm, and that is exactly the phrase that we would use. We have the staffing crisis, with recruitment and retention issues—as David Avery mentioned, wages in the sector have never been great. We are seeing a loss of skills and expertise from the sector, and all this talk of uncertainty around cultural facilities is not encouraging the workforce or creating an environment in which people feel secure and valued. There is a loss of people with skills, expertise and training to other sectors, and it is possible that they will never return to the culture sector. There is no immediate pathway for future talent to come through, which makes the sector not seem to be an attractive place to work. A couple of theatres in our membership have already said that they do not have sufficient technical staff, which is causing them to reduce the number of shows that they are going to put on this winter. They might have the audience demand but, across Scotland, they are not able to get the skilled staff to support that. It is quite a challenging environment.

On the question of what the Scottish Government can do, it should support the investment that has already been made into those cultural facilities, not only during the pandemic. A lot of our members are custodians of significant cultural assets across Scotland, and we must protect and preserve the cultural base that we have and enable it to thrive.

It is also important to ensure that local authorities are adequately resourced and encouraged to support culture at local level. We know that local authority budgets are under significant pressure. Obviously, cultural services are not statutory. There is some adequate provision around libraries but, again, there is flexibility around how that is interpreted. Beyond that, there is no statutory service, so it becomes an easy-to-cut service—I do not mean easy in terms of taking that decision lightly; I mean that, when faced with the other parts of the local authority budget, there is often no choice other than to cut the non-statutory elements. We are beginning to see a move among local authorities to focus on cost management and not on public service delivery, and we are seeing the wider impact of that, which is a danger.

In our written submission, we have set out some other things that could be considered. One is a transient visitor levy. That involves an understanding of culture’s role in attracting tourists from the United Kingdom and beyond to come and visit, and of the importance, therefore, of supporting culture to be able to continue to provide some of the world-class attractions that we have in Scotland.

Also, as has been touched on, it would be good if there were a ring-fenced pot of funding that could go back into cultural services and support the decreasing local authority budgets that are coupled with that.

Finally, we will hear from Julia Amour, the director of Festivals Edinburgh. Following that, members can ask supplementary questions.

Thank you for inviting me, convener, and thank you to colleagues for providing some pretty sobering testimony of what it is like out there at the moment. I know that the culture sector is not alone in that regard—it is a difficult time.

I will start by saying a little bit about my role and my members. Festivals Edinburgh is the membership organisation and collective development body for the 11 major international festivals in the city, which are, obviously, flagship festivals for Scotland, from the science festival in the spring, through the major August festival season to the next festival up, which is the storytelling festival, and on to Edinburgh’s Hogmanay. Therefore, we have moments of concentrated energy and focus in which creatives and audiences come together and, as such, we are at the intersection of a lot of the issues that people have talked about.

Our immediate concern is for the whole sector, because of the great energy shock, in particular, but also because of the perfect storm that Jim Hollington talked about. He referenced the fact that people are facing increases of hundreds of percentage points in their utility bills at different times. Some people will have to make decisions in the next week, because the change is coming in October, so there will be some canaries in the coal mine very soon. We will all find ourselves living and dealing with that situation extremely quickly.

I have a few observations—first about the immediate term and then about conditions for reset, if you like—that, I hope, complement and build on what has been said.

The first issue is whether there can be an emergency review of the regularly funded organisations that have those early cliff edges. I am lighting on RFOs not because the whole sector is not important but because that is a way of determining that, nationally, they have been identified as strategic organisations that should be supported in the long term. Measures that are mentioned in various people’s evidence include the waiving of conditions, the simplification of metrics and reporting, and multiyear long-term commitments. Those will all be useful in due course, but some cliff edges and crisis points will come sooner than that. All the learning and adaptation that happened through the Covid lockdowns, when crisis funding was provided, should help the national organisations to see what we can draw on from that.

Secondly, we have heard a lot about how we need to have whole-system thinking, but collaboration has an overhead. We are all doing more of it and we all want to do more of it, but it costs more, because you have to understand your partners and adapt your ways of working. Innovation needs investment. It was in, I think, Kirsty Cummings’s evidence that I read about the need to take more of a spend-to-save approach during budget discussions. I do not know enough about how the streams have to be divided, but, in the longer term, capital spend could be used for a restructuring fund for an organisation, because the evidence from many people—many more people than are around this table—has pointed to the deeper issue of needing to create the headroom and space so that we are not in survival mode but are able to replumb and rewire the system.

Thirdly, the work that other people have spoken about on the transient visitor levy, with a percentage going to the arts, needs to be accelerated. I know that it has been difficult, for completely understandable reasons, to find time for civil servants to work on the Scottish National Party’s manifesto commitment relating to the public percentage for the arts, but if those measures will not be helping to provide new revenue streams before, say, 2026, which is a year that I have heard mentioned, that is quite a time to bridge. We also need to have that horizon in our minds.

Finally, when we talk about a mismatch between how we value culture and how we fund it, we need to think about the benchmark with continental Europe. There is a gap of about a third between the average levels of funding across the European Union and the levels of funding in Scotland and the United Kingdom. That represents hundreds of millions of pounds a year. Addressing that gap would be a stretch target, but all these issues need to feature in the conversation about how we have a realistic rebasing between funding levels and expected outputs.

I thank everyone for being here and making such interesting comments. I have a great deal of sympathy with what has been said about the predicament of the many people who have described their situation in written evidence. I do not mean to begin with an excuse, but the Government obviously finds itself in a similar position to that of many of your organisations, with fixed budgets, lack of flexibility and so on.

I am curious to know what we can do to ensure better and more imaginative working together between Government, local government and cultural institutions to make real some of the things that you have talked about, such as culture’s benefit to health, the benefit of cultural institutions working with the national health service and all the other things that have been raised in previous meetings on such subjects. I am looking for ideas about what can be done to make real the things that we all believe in but which take a long time to achieve.

09:15  

Work should be done with the networks, several of which are represented in this room. In that way, we can draw on expertise and experience and, I hope, provide succinct thoughts and ideas about what might be able to be done. It will also illustrate the bleak circumstances that we all face at this point.

I always say that we should champion the arts. Spend on the arts is still in the region of 0.5 per cent of total spend. That is not very much, so if you cut spending on the arts, you will not necessarily gain very much to invest in other things for which there is need.

We also need to look hard at policy and regulations. One point that I have not flagged so far relates to rates relief for charities and cultural organisations, which local authorities are looking at closely. It would be great to keep the premise of rates relief for charitable organisations, even in instances in which such organisations are not occupying 100 per cent of a space, because we are still building back after—or during—the pandemic. It would be great to have a clearly defined national policy on rates relief for charitable organisations.

On the health and wellbeing issue, it does not need to be new money. Using ring-fenced money to apply for collaborative projects relating to the arts in the healthcare sector is an interesting way of unlocking things.

I will give one example. We are working on a pilot project in the Astley Ainslie hospital in Edinburgh, which provides rehabilitation services for adults. The pilot is with Tonic Arts, which is NHS Lothian’s arts in healthcare charity. It is a £5,000 project, and it took quite a lot of time to get that money together between us just so that we could try something to see what would happen.

Talking to the project team was interesting. A lot of such projects start with people who can really see the benefits of them. The team said that one of the real challenges is moving people on from being medicalised. Lots of people come to the Astley Ainslie hospital for physiotherapy every week, not because they need physiotherapy in a hospital setting but because they need to be moving and to get out in the community and have some social activity. We could easily provide that—and we do—but, at the moment, there is no way for the team to divert money into that. We do not have a model in which we can provide that kind of social exercise activity, involving dance, in different locations around the city. There needs to be a way of harnessing resource to do that.

We have a programme that supports people living with Parkinson’s disease. It has been running for a number of years, previously in partnership with Scottish Ballet. It has demonstrated the success of taking people out of a medicalised environment. The people living with Parkinson’s do not come to our studios every Wednesday—or to the eight different places around Scotland that are now involved in the programme—for treatment; they come because they meet their friends, they get to do something social and they can take part in physical activity that is really useful for them.

We know that such programmes can work, and healthcare professionals see that they can work. However, if people have to give up funding for things that they have to do already, things will not be unlocked.

That is really interesting. I have seen the Parkinson’s project—a dance company came from New York. It is about the confidence that being able to move freely gives Parkinson’s patients. It is quite profound to see that in action.

I want to talk about the role of community workers in all of that, because we have had great experiences over the past four years of working on a long-range partnership programme called PlaCE—platforms for creative excellence. It has been abundantly clear that we need a strong relationship with community hubs and community workers. As Kirsty Cumming described, the way in which their funding has dissipated over the past decade has made it very difficult for them to pick up the opportunities that are available to engage with culture.

There are some great tools in Scotland. A local information system for Scotland—ALISS—which it was recommended that everybody gets their work on to, could be a very powerful tool, but we need those intermediaries. We are not in a good position to identify who could most benefit from the things that we can offer, so we need local experts on the ground to do that. Again, it is about the whole-system approach and making sure that everything works.

Frankly, it is not very efficient to ask festivals, which exist partly to bring the world to Scotland and Scotland to the world, to also become community cultural workers. However, we have created fantastic relationships with community cultural workers, which allows us to bring wider perspectives and local, national and international outward-facing opportunities to hyperlocal communities.

I will pick up on Julia Amour’s point about community workers. Social prescribing is a key avenue for enabling people to find activities that can support their health and wellbeing, but how that works across Scotland is a bit pick and mix—indeed, it might not be available in every community across Scotland. We need to be much better at embedding social prescribing in communities, and we need clear pathways and opportunities. Part of the problem is that, although there might be social prescribing, the activities that are prescribed might run at 3 pm on a Tuesday, which does not suit a lot of people. As well as encouraging, embedding and recognising social prescribing, it is about having activities and opportunities available for people when they want to access them. There has been a lot of evidence on social prescribing, but it has never been fully embedded. There is a real opportunity there.

There is also an opportunity to learn from best practice in other sectors. The other part of our remit relates to sport and leisure. For example, in the past couple of years, sportscotland has created a strategic partnership with Public Health Scotland that allows much closer working across health, sport and leisure. We do not have anything similar on the cultural side, which is a missed opportunity.

Again, in relation to sport and leisure—I apologise that that is the only other sector that I can reference with any knowledge—a document was produced during the pandemic about the positive contribution of physical activity. The document aligned physical activity across all of the Convention of Scottish Local Authorities priority areas, and it made the case at local government level for how big the contribution is. We facilitate a group that we call culture partners for Scotland, and Community Leisure is the facilitator of a monthly meeting of some of the cultural bodies across Scotland. We have had that discussion, and there is definitely an appetite for a resource like that for culture.

We need a one-page infographic document, which we can show to local authorities, on culture’s wider benefits across health and wellbeing, so that we can make the case for cross-portfolio working. At the moment, we do not have that clear, snappy document so, when everybody is under pressure and headspace is limited, it is much harder to make the case for culture and to make and strengthen those connections.

I will come back in briefly to pick up on the points that others have made. Across Scotland’s Workshops, artists who work with us consistently say, “This is what keeps us well”, and communities say the same thing. There is a lot of really good socially engaged and community engaged practice in Scotland, which is led by individual artists and is supported by organisations. As we have heard, there is a lot of evidence about the health benefits of arts practice. I think that, just before I came to Scotland in 2010, the Scottish Government published a report on that, which I read with great interest.

I am not sure how much research there is on prevention. If participation in the arts stops a person from becoming ill and keeps their health steady in some instances—obviously, that will not be the case in every instance—it would be great to be able to make a pithier argument to support that. I wonder whether, in conjunction with the health service, someone could look at whether people who regularly participate in arts practice in all its forms go to the doctor less frequently. If we had a sense of that, we might be able to make a better case.

I think that Julia Amour used the word “sobering”, and I have to say that I feel sobered after hearing the striking evidence from everyone at the meeting. I thank the witnesses for that.

I want to explore two issues, the first of which is clarity of funding. Do the witnesses feel that they have clarity of funding from Creative Scotland and the Scottish Government? I ask that given the uncertainty that was raised a few weeks ago about the funding for the youth music initiative. To be fair to Creative Scotland, it has clarified that the funding has been “paused” rather than ceased. Is clarity of funding important? What could the committee or the Government do to help with that?

I am also keen to explore the issue of flexibility that Alasdair Allan raised and which we have heard a lot about. A year ago, we were talking about Covid and the post-pandemic effect on the culture sector, and it strikes me that, with the current very serious pressures, we have a real opportunity now to think quite radically and quickly about flexibility. We could think, for example, about the ability to build up reserves over the years, multiyear funding and the spend-to-save approach; indeed, I was struck by the point that such an approach could rewire the system.

If you had a shopping list of three things that would give you additional flexibility, what would they be? I will start with Julia Amour, given that she is sitting next to me.

When budgets are tighter—and they have been tighter for the best part of 15 years now—the tendency is to become more specific and directive and to say, “Well, I can’t fund everything, so I am going to make sure that I can identify that I am making a difference to this or that thing.” However, I think that such a tendency has misled us as a country with regard to support for our cultural sector, because it pulls people in multiple different directions. We feel passionately that we need the maximum amount of flexibility to enable people to do what they do best and to innovate rather than chase the money. That approach operates at all levels, from the major international festivals to the community cultural organisations. Some very good work is being done by the chief executive of WHALE Arts in Edinburgh on utopian funding—what funding looks like when flexibility is maximised. We saw some of that during the pandemic, when original funding conditions were waived or streamlined as much as possible.

On the metrics and reporting, many of the organisations in my membership are funded by the local authority, Creative Scotland and EventScotland as well as through directly voted Scottish Government funds, and all of the conditions are different in those different areas. Sometimes when we have conversations with those bodies, they say that they have been tasked to deliver different outcomes. However, I know that there has been an on-going discussion with the national partnership for culture about the ability to draw on a superset of outcomes so that an organisation is not spending a lot of its overhead on applying for and reporting on things, but is able, with its funders, to agree to a basket of indicators that represents the public value that it brings for the public pound. Such an approach would be great.

I could not agree with you more about the need to build up reserves and to be supported to have the headroom to change. It is difficult to have a health check while are running a marathon, so to speak. We definitely need to try to maximise those facilities.

09:30  

I have already referred briefly to the fact that the national collections, which are directly funded by Government, do have priority on funding. Unfortunately, however, it is flat funding, so the issue becomes their ability to react to changes in Government policy. Their budget is set at a certain level, but then the Government might want them to reduce the working week by two hours then pay for a 5 per cent pay rise, which will be consolidated, and then pay that again next year, the year after and so on. That comes against a backdrop of frozen budgets and, as I have already referred to, very strong restrictions—after all, the national collections are Government bodies—on how they can raise funds and what they can charge for. It presents them with an unsquareable circle. You can have maybe two of those policies—you can have fair work and keep services at the current level or you can freeze budgets—but I do not think that you can do all three. There are efficiencies that those bodies can make, but not at the level of the inflation and energy cost rises that we are seeing.

At the same time, there is more and more demand for these services and access to them, including through free cultural events. Whether it be Scotland’s National Nature Reserves, National Museums Scotland or Historic Environment Scotland, there is demand from the public to access their services. It is very easy for those organisations almost to collapse down into doing only what serves their absolute core purpose and not looking at the other work that, for example, Alasdair Allan was talking about, simply because it is not part of their core purpose or focus.

There is, to an extent, a similar situation in the charitable sector, where some organisations’ uncertainty around funding and fund raising makes them contract down to the core things that they need to do and not deal with wider problems or plan for the future. We are coming into a perfect storm, as some of my colleagues have referenced, in that some organisations had already cut things down to a core. Now this has happened, and they are not in a position to react to it, because they were already on an emergency footing before this year.

Jim Hollington wants to come in.

On clarity of funding, I have to echo what David Avery has just said. We have that clarity, because Creative Scotland and the City of Edinburgh Council have worked really hard in the context of annual funding from the Scottish Government and say that they want to give as much three-year certainty as possible. The challenge is that it has been three years’ certainty of the same amount.

When I joined the organisation in 2020, the model that we had was already pretty weak. It is brilliant that the core funding from Creative Scotland was extended, but it stopped us having any conversation about the model for the organisation. We ended up with 11 years on the same amount of money. It might sound ungrateful, but flat funding for a number of years can be problematic, too, if an organisation has to deal with what happens during that time.

As for flexibility, Donald Cameron asked about three things that the Government could do. First of all, it could bring the cultural sector under its wing to support a lot of the administrative stuff. One interesting thing that we found out in the past few weeks—and which we are already talking to Neil Gray about directly—is the Scottish Government procurement framework for energy purchasing. Almost none of our organisations knew this, but theoretically all third sector organisations have the ability to be part of Scottish Government procurement. That would be a help; it should be made available, and certain people should be better aware of it. I am sure that many others besides me are having to learn lots about buying energy and I am sure that our energy broker is very nice, but again, I am not an expert on dealing with energy brokers or on buying energy, and anything that the Government can do to take us under its wing with larger schemes would be really beneficial.

I also echo what Julia Amour has said about reporting. We need to realise that there are issues not just with the consistency of reporting to different organisations; the fact is that many of our organisations are very small. I am looking for my organisation to be perhaps a 12-person one, and it must be understood what is possible with that size of organisation.

Finally, there needs to be flexibility for organisations that have buildings as assets. In many cases, there is still a hold on those buildings by those who originally paid for them, and we would like more flexibility on what we can do with our assets, including borrowing on them or, potentially, selling part of them off.

We would also like more advice, given that we are trying to deal with all these things. The issue, therefore, is not just having flexibility but being able to get some help and advice on the big financial things that we need to think about. That knowledge is not in the core skill set of people in relatively small organisations.

I will bring in Kirsty Cumming, and then Jenni Minto has a supplementary question on this area.

I echo what has been said, to some extent. Clarity is important, as is, from our members’ perspective, multiyear funding. At the moment, most of the funding is done year to year, so there is no real ability to forward plan over two, three or five years to provide some degree of certainty. However, as Jim Hollington mentioned, there are obviously challenges even with multiyear funding arrangements.

The other important area for us is a move away from initiative-driven funding. There are lots of little pots of money out there, but lots of time and effort are required to put in applications for them. Indeed, they are often for things that are seen as new, despite the fact that there might be programmes that are already delivering something similar across Scotland.

As a result, we are not really recognising best practice, scaling that up and looking at how it could be shared better. There seems to be a constant search for something that will be the new best thing, and there will be a time-limited pot of money attached to it. Our members are saying that it is almost not worth their while putting in applications for that money, because of the time that it takes as well as the staff time needed to get the programme up and running—especially given that, at the end of that programme, no matter how successful it is, they will quite possibly not be able to sustain it.

There is therefore a real challenge with regard to the pots of money that are available, but what our members are saying is that, actually, they need core funding to keep the lights on. They do not need initiative-driven funding; they need to be able to continue to deliver their core services. We need clarity about moving away from always seeking new things to understanding what we have and preserving and protecting that.

I will follow that up, because what Kirsty Cumming has just said is connected with my area of questioning.

There are organisations of different sizes with different needs in different locations; indeed, Janet Archer talked about the fact that you are not only in big cities but also in more rural areas. Will you expand on your thoughts about the flexibility that is required across Scotland? How is it needed in different areas? What do you think about the fact that what fits urban culture does not simply slot into rural culture?

That is a good point, and it is one that comes up again and again for us, particularly for our members in rural areas. They provide facilities and services to very small populations, but they are the lifeline of those communities, so it is about recognising the importance of every asset in different communities across Scotland. The move at the moment towards cost efficiency and cost management rather than focusing on services and the impact on communities is perhaps a move away from that. Therefore, there is more pressure on some of the smaller venues, because decisions are based on footfall or on how many people attend various programmes in a week. That does not take into account the geography and the differences across communities in Scotland. There is a real issue with geography.

As for flexibility, most of our members’ assets are owned by local authorities and delivered through the trust model, but flexibility can be enabled by local authorities by looking at different ways of using assets. That might involve moving away from the traditional model or the original contract and understanding that the landscape has changed. That flexibility does not always exist. There is still a real sense from some local authorities that things have moved back to where they were before Covid—that is, a sense that the opening hours and the services should be the same as they were before. Actually, the world is a completely different place with regard to customer behaviour, the current crisis and people’s appetite for the sort of activities that they want to engage in in their free time. We do not necessarily have the freedom and flexibility to look at changing that.

Indeed, there is a bit of a barrier to considering change. Some local authority partners sometimes see change as failure: if something is not working, you change it. Actually, the world is changing and we need to be much more flexible.

We also need to recognise that our members are the experts. For the trusts that deliver the services, doing so is their bread and butter, so they should have the full flexibility to make the decisions that are best for communities. That is what they are contracted to do. Without that flexibility, they do not necessarily have the freedom to deliver what they would like to deliver—for example, to use a library space in a slightly different way and move away from a traditional library model. It will not be right for every community and there needs to be some discussion about that.

My final point, which is linked to that, is about the transfer of assets. We do not examine the good and the bad of community asset transfer enough. Again, we have heard from a few local authorities that asset transfer is a failure of the local authority or the trust. It is not necessarily a failure; it is just a different model of delivery that might be right for some communities. We have seen some really good examples, but we are not able to have open and honest discussions about what communities want. It still feels like there is a tight framework around the expectations of delivery.

As Jenni Minto mentioned you in her question, Janet, we will come to you next.

Co-designing with communities and artists is a really important feature of Scotland’s cultural landscape.

When considering what should come next, we should always look back at where we came from. The arts funding system was set up post war in essence to distribute opera and ballet companies from London to the rest of the UK, and the infrastructure followed that. Everybody knows the history.

In Scotland, alongside that, individuals and communities have been empowered in responding to Scotland’s geography. Some extraordinary work takes place in different parts of Scotland and the ecosystem needs to accommodate that. Perhaps we need to think differently about how institutions work and how, through artists in communities, they can bring individuals into the fold to co-design provision.

Scotland’s Workshops consists of, in the main, artist-led organisations that started off small. Edinburgh Printmakers has had four homes in Edinburgh; over the last period, and with the move into a new home in Fountainbridge, it has grown exponentially, but we hold on to the values and the premise of artist-led activity. Scotland has a lot of strength in that respect and rural areas in particular benefit if individual artists are empowered through appropriate funding measures.

We need to get the balance right. In thinking about future proofing the arts, for which all of us who have worked in the arts for a long time feel responsible, we perhaps need to consider the broader ecosystem, what the need is and how we can safeguard in the best possible way public access to the arts—that is the important point with public funds—as well as how we cherish the estate of buildings that have been developed to accommodate artists. All of that needs to be considered holistically.

The arts are changing. Perhaps the model that was set up post war is not the right one for today.

I want to pick up on Kirsty Cumming’s comment about the need to recognise lifeline venues in rural communities—and, I guess, in town and city centres, too, because they are all having to be reinvented.

The concept of cultural assets being local economic hubs seems to be better recognised in the mission of Highlands and Islands Enterprise and South of Scotland Enterprise than it is in the mission of Scottish Enterprise in the central belt. As I understand it, HIE is tasked with community sustainability. That means different things in a wider sense and draws on some of the points about how we get both bits of a wellbeing economy—the wellbeing and the economy. Culture does that extremely well and it would be really helpful if that could be more explicitly acknowledged in the tasking of some of our national agencies.

09:45  

It has been good to hear your powerful evidence today in addition to the submissions that we have had from lots of organisations. I cannot think of a committee meeting when we have had phrases such as “a perfect storm”, “dire financial situation” and “crisis” being mentioned by so many witnesses, not just here but in written evidence. Therefore, I am thinking about how we fix it and what evidence we need to take back to the Parliament. Quite a lot of comments have been made about the percent for art scheme and the transient visitor levy as potentially important new additional moneys. However, they tend not to be something that you could guarantee everywhere at the same time. Therefore, they might be important, but what about the overall status of culture?

In their joint submission to the committee, COSLA and the local government directors of finance said that funding in the collective cultural area in local authorities had been cut by nearly a quarter in the eight years pre Covid. Therefore, there is an issue with a reduction in funding at the local level. The committee also heard the comments about the challenge of flat funding at a time when all your costs are rocketing. Do you have thoughts on the equivalence of culture spending? It is not statutory, so should the committee recommend something on the status of funding for culture, given the complexity on the ground and all the evidence that we have seen in our work on social prescribing about the wider benefits of culture? There are benefits for health, wellbeing and the economy. How do we capture that in order to say that culture is important and needs proper funding? Does anyone have thoughts on how we ensure that it is ranked properly?

No one is jumping in desperate to answer that one. It is interesting that Janet Archer, I think, mentioned the need for research in that area.

It would be good to take a fresh look at some of the evidence that was brought together in the last session of the Parliament about funding for culture, including European approaches to cultural rights, the status of cultural workers and so on. I would like to say that we could make culture statutory under local authority budgets and that that would fix things, but we all know that, at the moment, it is about how we can make the cake bigger rather than cutting it into ever finer slices. We have been very interested in the way in which the European systems embed into their processes the value that they place on culture—and that we place on culture, as Jim Hollington mentioned up front.

Another area that could be acted on more quickly is incentives for philanthropy or the kind of business rates and other taxes relief that several people around the table have mentioned. The other day, I had a discussion with a generous philanthropy organisation, and it echoed some of the points that we have talked about this morning to do with long-term funding and the flexibility of conditions for organisations to do what they need to do. However, they usually require some sort of foundational commitment from the public sponsors of cultural organisations. Therefore, the more that we can preserve the sense that, yes, the cultural sector is valued so that we can continue to leverage that sort of benefit, the better.

For example, the Edinburgh festival system is about 15 per cent public funding and 85 per cent income generated between sponsors, donors and audience members. You have to keep that whole system in mind, because those percentages are not always the same across the whole of Scotland. We are trying to irrigate the whole of the local economy, and if we move the system in a certain direction, we will have only that 15 per cent that is public funding and we will not have the other 85 per cent that comes into that system.

I would say that public funding should be made statutory, even at a tiny percentage, because the principle feels important. However, I concur that that is not necessarily viable.

There is more opportunity for the national system and the local system to work more coherently together. At the moment, we have separate funding agreements with our national funder, Creative Scotland, and with our local funders, so dealing with the administration requires double the time. We could require that to be joined up.

In the old days, a local funding would not be provided unless a local authority was able to contribute to a package. That is not always possible now, but it would be possible to say that the local authority needs to provide a package of support that includes rates relief and other professional supports or incentives that make life easier for cultural organisations. If that could be worked through, it would be transformative for how we function.

Even when it comes to identifying key performance indicators, if those could be lined up and made be the same, we would not be spending time on administering the arts as opposed to delivering on the ground.

From our perspective, I am not sure that statutory provision would make any significant difference. Obviously, we understand that local authority budgets are within a fixed envelope and financial resources are finite. As you said, there are difficulties in how they are allocated.

For me, the issue comes back to some of the earlier points on cross-department working—joining up different pots of funding and looking at what culture contributes across different areas such as mental health, wellbeing, the economy or education. In the outcomes that it delivers, culture contributes significantly to a range of areas, but there is not necessarily any funding.

I realise that it is a challenge. At the moment, we are seeing a bit of a move towards protectionism around budgets, because everything is tightening. However, we need to do the reverse of that: to have better conversations across departments about outcomes, focusing on what we want to achieve and how we get there, rather than having siloed pots of funding, for which there is still a bit of a tendency both at national and local government level.

Janet Archer made a point about central and local governments working together better, and about the support between them being much clearer. That would also be helpful in the streamlining of some of that funding and making it flow more easily to where it needs to be.

My final point is about research. There is a lot of research out there. There is an abundance of evidence on the impact of culture on health and wellbeing. We need to think about how we utilise that.

Sometimes, as a sector, we try to find a new bit of research that will make the case and transform hearts and minds. There is probably a lot of information out there, but, as a sector, we are not using it collectively in the best way to maximise that message. We need to understand what is going to make that case, whether we have it, and how we articulate it. That needs a much wider, joined-up approach, in order to have any impact.

The evidence this morning has been powerful. From it, I have taken the sense that the world has already changed and that, if organisations have to change, there is no sense of failure, but that there needs to be that headroom and support to enable that change to happen. I am sure that other sectors, including health, are having to think about how they respond to the new world as well.

Julia Amour, Janet Archer and Kirsty Cumming mentioned the transient visitor levy. There is a commitment from the Government to deliver that in legislation during the next year. What has the conversation been locally about that? Clearly, it will be a discretionary power that councils can use. What they can spend it on may also be discretionary, although there is a strong argument that it needs to be put into culture and wellbeing.

I do not know how that local conversation is panning out. Obviously, there will be some dissenting voices on the use of such a levy—perhaps from parts of the hospitality sector, who may not understand the benefits of how it could be used. I am interested to know how those early conversations are going, because whether the levy gets used is going to be pretty critical, including to the extra funds that could be brought in.

I see Julia Amour is nodding.

It is obviously in the public domain that the City of Edinburgh Council has committed to working to bring in the transient visitor levy when it has the power to do so. We have had a lot of discussions at local level about those very questions. I have been very buoyed up by the degree of consensus among not only council members but also civic organisations about how there needs to be a virtuous circle between what the money is raised against and how it is invested. People across the board want to resist the idea that it would be tempting to divert it into a general pot for general needs, even in difficult times. Seeing the funding going to some of the things that we have been talking about would be a solution to some of the issues that high demand from visitors in concentrated bits of the city centre can bring, and stimulus for more sustainable and good growth in tourism.

City management issues—which were amplified in the last two weeks of August with the refuse workers strike—are top of mind in this city. Some of the points around community culture that we have been talking about this morning could also be very much helped by a new revenue stream that could go to that sort of purpose in a ring-fenced way.

On stimulus, the cultural offer in Edinburgh is world class and needs to be rebased, because it has been eroded over more than a decade. We are also talking locally about what succeeds the organisation Marketing Edinburgh. We need to think about how we manage tourism and stimulate sustainable and responsible tourism in the future. Those are some of the purposes that we have been talking about in Edinburgh.

Are similar conversations happening in relation to your networks across Scotland, Kirsty Cumming and Janet Archer, or is this simply an Edinburgh conversation at the moment?

From my perspective, most of the conversations are within our membership network at the moment. It is very much about understanding that it would be discretionary. It will not be guaranteed across the whole of Scotland but it is about the encouragement. There is a desire for a steer from central Government to mandate that, if there is a visitor levy within a certain area, at least a proportion of that would go towards culture. That would take away the possibility—which Julia Amour talked about—of it going into a general pot where it would be anticipated that it would be sucked into other areas that have greater financial need. We are talking more about the ring fencing of a proportion, if it comes into force, and having a very clear steer around the role of culture in the visitor economy and making sure that that is protected.

I note that the Scottish Contemporary Art Network referenced a transient visitor levy and a percent for art scheme in its submission. It is therefore clearly a conversation among the visual arts community. I am not privy to the detail at local authority level across the country but I agree that, if culture is the magnet that draws tourists to Scotland—which we know it is—it should benefit in relation to any income drawn down through that route.

I call Sarah Boyack—I am sorry that I did not bring you back in earlier.

I thank everyone for their answers. That last discussion really reinforces the need to think about how we get the cross-government working that Kirsty Cumming referred to very powerfully. We have had discussions about health, wellbeing and culture and the potential benefits. With the budget coming up this year, we need to think about how we make that more explicit. Witnesses have given the committee powerful information about how to make processes and KPIs more straightforward, given the differences between very big organisations and smaller, lighter-foot, community-based organisations.

A couple of witnesses have mentioned staff changes over Covid, which is also mentioned in the submissions. We took evidence about that when we talked to venues about Covid earlier in the year and I think that it is in Prospect’s evidence. The loss of young people from the sector because they do not see it as providing a long-term career seems significant. Is the sector doing work to try to retain people and their skills and to make it a continuing career option for young people?

10:00  

Unfortunately, the greatest turnover that we see in the areas of the sector with which we deal is among people who are new to it. Some of that is to do with salaries, as you would expect me to say, but a lot of it is to do with insecure funding and contracts.

Kirsty Cumming referred to pots of money. Unfortunately, that situation can lead to a habit of saying that, because the pot of money is for three years, the contract is for three years. People either do not have their contract extended or, more naturally, are worried that it will not be extended and look for other work before a project ends.

That is one of the reasons why we see such a high turnover now. Whereas, previously, people would have come into the sector, stayed with it, worked in an institution and become experts in their area, they simply cannot find a way into those organisations. They come into the sector and then leave again.

The point about insecure contracts and the link to funding is absolutely right. There has also been a bit of a rebalancing of people’s priorities, particularly post-Covid. A lot of cultural work involves what might be seen as antisocial hours because a lot of facilities are open on weekends or you have live performances, which take place in the evening. People have not necessarily wanted to come back to that post-Covid. They have wanted to rebalance time with families and their work and personal lives. There has been a significant loss because of that as well and because of salaries not being able to compete.

A lot of work is going on. Other organisations, such as Creative & Cultural Skills—CC Skills—are considering the workforce in the cultural sector, considering how to attract people and supporting organisations to recruit. There has been a lot of change in recruitment processes. Our members are talking about having interviews on open days because, if they have an open day and somebody signs up for an interview, the person does not turn up for it because they have another job offer. There is a time pressure on presenting an attractive proposition to people and snapping them up at the time.

Organisations are also considering the benefits that they can offer because they cannot necessarily provide salaries that compete with other sectors. Our members are examining benefits such as flexible working and health and wellbeing supports—some of the softer benefits that can be offered—but it is a difficult recruitment market for the sector at the moment. There is a need to attract more people and to retain people in the sector.

David Avery talked about insecurity. A lot of the media about that is not helping people to feel a sense of security or see a career pathway. A lot of people see the sector as an entry-level job without anywhere to go after that. We need to create clear pathways for people to develop, grow and progress so that we keep talented people in the sector.

Our role is about supporting independent dance artists—people who are not in one of the two dance companies that exist in Scotland. Their careers very much involve their artistic practice, working in retail or hospitality, teaching dance and working in organisations such as ours. Everything that has been mentioned, such as the increasing insecurity of jobs, means that we are losing artists from dance just as much as we are losing people from the administrative or organisational side because they simply cannot make a career that adds up between their professional practice and everything else that they might need to put in to earn a living. My bigger worry is not just about people who work in organisations but the artists whom we exist to support.

I will say the words “opportunity cost”. We have spent the past 65 or 70 years training and educating people and building expertise in arts organisations. If we let that go, what would it cost to get it back in the future? That needs to feature in any thinking about that small percentage of Government spend that is invested in the arts.

Thank you. We have run out of time with this panel. We have another panel immediately after this. I thank the witnesses very much for attending and for their written and oral evidence. It has been profound.

I suspend the meeting to onboard new witnesses.

10:05 Meeting suspended.  

10:09 On resuming—