Arts Council England annual review shows a mixed picture of efficiency savings countered by increases in costs elsewhere.
Efficiency savings totalling £1.36m in 2004/05 have been announced in Arts Council Englands (ACE) latest annual review, but these savings have been more than offset by £1.7m spent last year on a new IT system which is still not operational. The system, designed to manage grants and other information systems across all of ACEs regional offices, is still being tested and an ACE spokesman confirmed that further expenditure on top of the £1.7m had been incurred in the current financial year and that the total anticipated cost related to this major project is £6.4m. The system will be launched in 2006.
The accounts for 2004/05, approved by the National Audit Office, also reveal significant increases in staff costs, with the total wage bill increasing by almost 11% and employers pension contributions rising by over 25%. Staff cost the organisation a total of £30m in 2004/05, and salaries rose to an average of £28,500, with 42 employees earning in excess of £50,000 and six of the executive directors receiving bonuses. Staff numbers increased by 52 over the year to reach an all-time high of 792, partly as a result of the expansion of the Creative Partnerships scheme. These increases came in advance of a pledge made by ACE in April 2005 to place a three-year freeze on its administration costs.
ACE claims to have exceeded overall efficiency targets of £6m set by the Department for Culture, Media and Sport. By its own calculations, it saved £6.97m last year compared with the costs of maintaining its pre-2002 organisational structure. However, these efficiency savings do not take into account the costs associated with Creative Partnerships, the new IT system or over £200,000 spent last year on redundancy payments stemming from the merger of the Arts Council with the regional arts boards. When these are factored in, ACE concedes that its operational costs actually rose by nearly £2.6m during 2004/05.
Progress towards other targets has also been mixed. Audience and visitor attendance figures at Regularly Funded Organisations (RFOs) are 25% ahead of target, and attendance at education sessions run by RFOs is also ahead, by 47%. However, a range of social inclusion targets which ACE has pledged to meet by 2006 are currently running behind. Only 26% of disabled people attended the arts in 2004/05, against a 2001 baseline of 29% and a 2006 target of 32%; and despite meeting targets for grant-making to Black and minority ethnic (BME) artists and arts organisations, ACE reports a drop of 26% in participation in the arts by BME audiences. ACE has defended its progress in this area by pointing to changes in the way that attendance figures are calculated. A spokesman said, definitions of regular attenders have changed since the baseline figures were established & the figures cant be directly compared. The Liberal Democrat culture spokesman, Don Foster, ridiculed claims by Peter Hewitt that ACE was delivering real progress for Black and minority artists. He said, If the Arts Council considers this progress, I would hate to see what failure looks like. The Arts Councils increase in grants to ethnic minorities is admirable but it seems this is merely papering over the cracks of a much wider problem.