Chamber and committees

Ms Baker is drawing me into an exchange about the Scottish Government’s on-going emergency budget review process. Her point has been made. I have heard it, and I hope that she has heard me say that I am being as vocal, outspoken and constructive as she and the committee would expect me to be during an internal budget process to ensure that we have the best possible settlement in the circumstances to support the cultural sector. Unfortunately, I cannot say more than that.

You were looking at me, convener, when you talked about having to be quick. I feel suitably guided.

My answer to that question is the same as my answer to Ms Baker’s: we are in the middle of a process. Mr Ruskell’s point is well made, and I will take it away and discuss with officials how we can satisfy the need for transparency. As I have often said to the committee, I understand how important that is for you in your work and for us to be able to collegiately make progress in what is a shared endeavour. I will take that away and no doubt, as we emerge from the budget process and there is greater certainty about things, you will have wider questions that we will be able to answer directly. I hope that I can leave that there.

Good morning, convener, and thank you for the opportunity to make some opening remarks.

This evidence session on pre-budget scrutiny is an important part of the normal process for setting annual Scottish budgets, but I think that we all agree that the circumstances that we face today are anything but normal. Our public finances are under huge pressure from soaring inflation—which is at a 40-year high—and the cost of living crisis. Uncertainty has increased with the negative market reaction to the UK Government’s tax announcements two weeks ago.

The combination of the on-going cost of living crisis, high inflation and the forecast recession has increased demand for Government funding. Not surprisingly, the committee has consistently heard that theme from witnesses in the culture sector. The limited cash funding that the Scottish Government can make available for public services is being eroded by rising inflation. Our budget for this year, as you know, is worth about £1.7 billion less than when it was announced in December, with inflation having risen from 4 per cent to 9.9 per cent in the meantime.

Our cash plans in the resource spending review announced little more than four months ago are similarly being eroded by greater inflation. That is a challenge that faces public services in all Government portfolios, but I am acutely conscious of how economic circumstances are affecting the culture sector. Building-based organisations in particular face steeply rising costs. Everyone who works in the sector is rightly concerned about their pay as living costs rise so steeply.

Added to that is the mixed picture of post-Covid recovery in visitor and audience numbers. On the one hand, I hear some positive reports of recovering visitor numbers in museums, galleries and heritage attractions, but, on the other, there is a more tentative picture in relation to audience figures in performing arts and cinema. Most of all, there is the continuing uncertainty, as the rising cost of living undoubtedly means that people are cutting back on leisure spending. What the committee has heard from witnesses is what we are hearing from our discussions with our culture public bodies and the broader sector.

To address those economic challenges, the Scottish Government is making hard choices to prioritise spending through savings that were announced by the Deputy First Minister on 7 September and the emergency budget review that is due later this month. Although none of that is a surprise to the committee, it is worth repeating the context to what will be difficult decisions in the forthcoming 2023-24 budget.

The resource spending review envelope for culture and major events for the next financial year is £172.8 million, which is a cash reduction of £4.2 million, or 2.3 per cent. That does not include the impact of inflation, which shows that there is already a challenge before inflation is factored in and, indeed, before the possible further public spending cuts that are being trailed by UK ministers.

I will continue to argue for the most public funding that we can afford for the culture sector. I am also keen to conclude some work on multiyear funding, even if economic uncertainty means that the figures for later years can be at most only indicative, because I know that multiyear figures would help the sector to plan ahead.

I know that the committee wishes to concentrate on the culture budget in its pre-budget discussions, but I would also be happy to answer any questions on other areas of my portfolio. If there are any questions that I cannot answer today, I will, of course, write to the committee.

Galleries and museums are in a better position to understand trends in visitor attendance and spending, but we know the headline numbers and percentages. To be frank, a lot of that is encouraging and shows that people are visiting, which is one reason why we are committed to free public access.

We hope that people who view evidence sessions such as this will take every opportunity to encourage the public to visit our amazing galleries, museums and public cultural institutions. I will take a stab at answering by saying that discretionary spending reflects how people are feeling about how much money they have in their wallets. Although people might enjoy going to see great works of art, they might be economising on other things—they might be choosing to use the cafes less and to buy less in the amazing, high-quality shops in our galleries and museums. That is my best stab at answering that question, but I have no doubt that those who are in charge of galleries and museums will be looking at all of that.

Notwithstanding that, I take the opportunity to encourage people to be aware that such facilities are still free and are open to the public to attend. They are also warm spaces, which people should consider as we enter the winter months. As we emerge from Covid, we should remind ourselves that we perhaps have not been to visit our galleries and museums for a while so should take the opportunity to do so.

I am sure that those who are charged with making some of these project funding decisions will be looking closely at the evidence that has been given. The committee took evidence from Creative Scotland before I sat in this chair. I am sure that they will be thinking about that, because they will be thinking about it anyway. If I am entirely honest, I think that it will be an eternal question. We want new and innovative projects, do we not? We want to learn the best from elsewhere and we want to try to improve things. There is always an attraction on all our parts, regardless of where we sit politically, to say, “This is a good and new thing, and we need this new thing to help address this shortcoming or this challenge or this opportunity.” At the same time, we have a series of established projects that are supported. There might be a feeling that those are holies of holies that could never be challenged. There is a tension in that, is there not? I do not think that there is a simple answer to this, but we need to be on the ball with that particular dynamic. We need innovation and projects, but we also need to protect that which is good and that which works.

That is one aspect of the challenge, but on the second question of different funding pots, it was always thus, was it not? As well as the Scottish Government and Government agencies that are charged with supporting projects, there are other places that provide funds for cultural projects. I am thinking of, say, the UK Government in some cases; in the past, we had the European Union; and beyond that there are different national and international pots.

Another dimension that is worthy of consideration is the amount of time that organisations have to spend on trying to identify where they can get funding from. One has to be of a certain size to do that sort of thing efficiently and effectively and to have the expertise to draw down those funds. I am not being critical here—it is just an eternal observation and a statement of fact.

Something that I would be concerned about if it were so would be people not knowing where to turn in order to draw down funds. That is as relevant in the public sector as it is for Government and other organisations. After all, there are some very important funding sources beyond Government; I can think of, for example, the Heritage Lottery Fund and, indeed, the Postcode Lottery, which, incidentally, is headquartered in Edinburgh and gives a lot of support to a lot of small and medium-sized community and cultural projects.

I know that there was a lot in that, but what I will say is that if the committee has evidence that people are finding it difficult to know where to turn—which is potential criticism number 1—or, secondly, that they are not being treated fairly when they seek support, I have to say that I would like to understand that better. The context of all this is constrained budgets, which are an issue affecting not just Government but other funding organisations in both the private and public sectors. I should also mention philanthropy, because there are cases of people who have been extraordinarily generous in supporting culture and the arts but whose spending has now been constrained.

There is something in all of that. I take upon myself the fact that I have some responsibility with regard to my convening power—if I can call it that—to be able to help in different areas of funding, whether it be national or local government, philanthropy or the private sector. I am doing some of that work already, but maybe there is more that I can do. I am open to encouragement, Mr Cameron.

Forgive me for not having mentioned it, but there are cross-party groups in Parliament that do a lot of work in parallel with the formal subject committees. Unfortunately, I am not able to go to as many of those meetings as I might want to, but I would hugely welcome feedback from them. If you are learning important lessons and meeting important people who you feel we need to hear more from or understand better, please get in touch. We are keen to be as informed as we can be.

I am alive to the points that you are making. As, I think, committee members know, the challenges of Covid led to an unsurpassed level of dialogue between the Government, Creative Scotland and the creative sector, because we were dealing with an existential crisis across the entire sector. We were in the fortunate position of having funds to dispense in that emergency situation. The Government tried its best, as did Creative Scotland, to get funding to where it was needed through the different phases of the intense Covid period in order to deal with the specific challenges that Covid posed to the cultural sector. We were being very well advised as to what those challenges were.

My first observation is that having the funding to distribute undoubtedly made the situation a lot easier than it would have been had funding not been in place. Secondly, it is worth noting that when one is dispensing such a significant level of funds, there is always a risk that fraudulent applications for financial support could be made. We know that that happened with personal protective equipment and the like during the Covid period, but I am not aware of any significant parallel development in culture funding. In significant part, that is because of the experience of Creative Scotland as a funding organisation, for which it deserves recognition: we should not take that for granted.

The convener made the important point that we are talking about public money. People need to have confidence in the culture sector, the public agency that supports it, the Government and the Parliament, which oversees that funding and makes strategic decisions around it. We should never take that for granted. Creative Scotland deserves to be recognised for having managed the funding process.

I will move on to the substantive point about cultural organisations after the most extreme phase of Covid. I completely understand that it is a tremendous challenge that there is not now the amount of money going out the door to support organisations that there was during the height of the Covid period. People are trying to balance their books, recover from Covid and recover visitor numbers and the numbers of people who pay to come through their doors in theatres, cinemas or similar venues. I hear the warning that things are going to get more difficult, in many respects. This summer, festivals across Scotland have been very successful, in comparative terms. There is a feeling, however, that next year will be more difficult—not least because of inflation, among other reasons.

I will address the specific point: I will take it away and will be happy to write to the committee on how organisations are advised in relation to funds that they hold, and on how they are advised on funding decisions that might be made on the basis of their having £X in reserve meaning that funders are prepared to give only £Y in public funding. Organisations might have made difficult decisions about having reserve funding in place so that they can keep their heads above water, because they do not know what the situation will be like in three, six or 12 months. I am content to go away and look at the matter so that I can try to get the best guidance, because I want organisations to feel that they are being treated fairly.

However, again it behoves me to say that we are talking about dispensing taxpayers’ resource during a cost crisis. Therefore, decisions have to be made on the basis of who has funds—full stop. All I am trying to say is that it is not easy. I want decisions to be as sympathetic as they can be, but I also want people to be advised as best they can be advised. There is an additional dimension to that. I have had conversations with people in the culture sector who are looking at next year’s festivals or the following year’s tour, for example. They are having to make medium-term and longer-term financial plans, and it is extraordinarily difficult for them to work out how things will add up.

We will be as helpful as we can be. Unfortunately, I do not have the magic wand that can answer all the queries, but I want things to be fair and I want people to be well advised. I do not want people to feel that they are being penalised for running effective organisations or that they are hard done by compared with others.

Incidentally, I should say that, although we look closely at the public evidence sessions and the evidence that the committee receives, if you have information about circumstances that I and my officials might not know about—any information that might not have been said in public or that you have picked up during visits—please let us know. In that way, we can be as well informed as possible.

Of course.

If you ask a really difficult question, I will say that I have answered it already. [Laughter.]