Successful arts organisations are highly skilled tightrope-walkers who use the balancing influences of public funding and self-generated income to keep themselves from falling into oblivion. This week’s main stories reveal the precariousness of that existence. In Scotland, The Lemon Tree (p1) has missed its footing by misjudging the impact of losing its status as a core-funded organisation: quite understandably, it seems that board members felt unwilling to resort to a commercial loan. After all, why should they risk offering personal guarantees against the financial failure of their organisation when they are not in a position to gain financially from it in more successful times? At Derby Playhouse, it appears that a drop in earned income as a result of building works over which it had no control, combined with two major funders who failed to agree a support package to see it through its crisis, were enough to tip it over the edge.
Also this week, like Exeter Northcott, a thousand arts organisations in England are finding out whether they too are at risk of falling (p3) – not only because of their own competence (which is only one of the criteria for judging their continued worthiness for public subsidy), but also because of Government-imposed targets relating to social issues way beyond their own control, which are these days used to assess the competence of their primary funder, Arts Council England. Finally, what future for those arts organisations in the north of England whose funding has evaporated because of the fall of Northern Rock (p3) – a financial disaster whose origins were not even UK-based? They too are innocent victims of powerful forces way beyond their own control. Of course, private sector organisations are vulnerable to significant external events too, but the public/private mixed economy endured by so many in the arts sector revolves around a particularly uncomfortable set of volatile variables. The former Chief Executive of Derby Playhouse has hinted at a new-style business model for the theatre “without structural reliance on discretionary grants”, and suggests this approach may assist other tightrope-walkers too. Let’s hope she’s onto something, because Derby Playhouse and the Lemon Tree certainly aren’t the first to stray away from that fine line between solvency and insolvency, nor will they be the last.
Liz Hill