Culture minister Tessa Jowell has suggested that Arts Council England looks to its own house to make spending cuts. Charles Morgan examines its record so far?
Arts Council England (ACE) published two sets of accounts last year. It did its best to ensure that nobody noticed. You might have expected that the first annual report of the new Arts Council for the year 2002/03 would have warranted a bit of a fanfare. Instead it crept out, somewhat belatedly, on 27 January 2004. This was the day on which the House of Commons was debating the introduction of university tuition fees and the day before publication of the Hutton report. A very good day indeed to bury bad news. The second publication, the annual report for 2003/04, followed on 29 November 2004, soon to be overtaken on the arts news agenda by the Government?s grant settlement and, fortuitously for them, by the controversy surrounding Gurpreet Kaur Bhatti?s play, Behzti at Birmingham Rep.
In October 1998, soon after their arrival at Great Peter Street, Gerry Robinson and Peter Hewitt announced reorganisation plans promising ?a new kind of Arts Council... which will be leaner but more effective?. In March 2001, they came up with Prospectus for Change, their scheme to create a single arts funding and development organisation which ?will employ fewer people than the 660 currently employed by the Arts Council and the RABs together?. This was followed in July of that year by Working Together for the Arts, which boasted that ?the Council intends that the changes should yield administrative savings of £8?10m a year, once transitional costs have been met?. Even Peter Hewitt did not seem entirely convinced that these savings would materialise. At a London Arts consultation meeting in September 2001 he admitted, ?I completely accept the detail wasn?t and isn?t there. But how can you judge it? ... You can come back to us in one or two years? time.? So let?s come back to it.
Counting costs
Needless to say, neither of the reorganisations came for free. The costs of redundancy and outplacement arising from the Arts Council?s first restructuring in 1999/2000 and 2000/01 were £1,419,000. The accounts for the years 2001/02 to 2003/04 show further costs of £7,468,000 relating to the merger of ACE with the RABs. This makes a total of £8,887,000, without taking into account costs incurred by the RABs on the merger ? of which, at least £720,000 is identifiable in the accounts for 2001/02.
In 1997/98, the accounts for ACE and the RABs showed staff numbers of 652.5 (up from 564 the previous year). The first reorganisation succeeded in bringing this number down to 651 in 2000/01! The latest accounts for 2003/04 show staff at 707, the highest number ever.
Pay rises
Staff salaries have grown from £15,647,000 in 1997/98 (up from £12,567,000 the previous year), to £25,929,000 in 2003/04, an increase of 66% over the six years of Peter Hewitt?s reign. Senior executives have led the way. The Chief Executive?s remuneration has increased from £78,581 in 1998/99, his first full year in office, to £152,000 in 2003/04 (an increase of 93%). In 1997/98, the highest paid RAB Chief Executives were receiving salaries in the range £40,000?£49,999; in 2003/04, the salary range for Regional Executive Directors at the new Arts Council is £70,000? £93,000 (an increase of 75% at the lower end of the scale to 86% at the top end).
The costs of permanent staff are only part of the story. In November 1999, following my suggestion in a letter to The Times that the arts funding system had launched an unprecedented recruitment drive before the 1997 election in order to make later administrative ?cuts? less painful to themselves, Peter Hewitt wrote to me to say that the first reorganisation of the Arts Council would not only reduce staff numbers but ?will deliver for the Arts Council without the need for temporary staff?. In 1997/98, the agency staff bill for the Arts Council was £1,520,000 and in 2003/04 £2,827,000. During Peter Hewitt?s period in office, the Arts Council?s accounts include expenditure of £13,875,000 on temporary staff. Professional Fees fell from £2,863,000 in 1997/98 to £1,700,000 in 2003/04, so at least there is one area which shows a ?saving?, even if it is not enough to make up for the increases elsewhere.
The Lottery
Then there is the mystery of External Assessment ? fees to consultants to assess Lottery applications. In 1997/98 the Arts Council spent £8,428,000 on the external assessment of Lottery grants of £445.8m. The Lottery accounts for 2001/02 show that, even though Lottery grants were down to £162.8m, external assessment expenditure was still at a level of £8,066,000. However, in the following year this figure had been ?restated? as £1,861,000, a reduction of £6,205,000. There was no explanation of where this money had been ?restated? to. It can?t have disappeared (what a useful trick that would be) so where had it gone?
?Efficiency target performance?, paragraph 26 in the most recent accounts, declares that ACE achieved actual savings of £5,614,000 in 2003/04 (against a target of £5m) in comparison with the administration costs of the 11 previous organisations ? excluding the one-off costs of change, the cost of new developments and inflation. That would be fine if there was any evidence to support this claim but there is no explanation of where the savings are supposed to have been made. Almost every other paragraph seems to contradict the assertion. There may be a case for excluding the one-off costs of reorganisation but that doesn?t make it any less money that was diverted away from frontline arts activity. And does anyone remember the Arts Council saying, ?we will make savings of £8?10m a year ? provided that nobody has any new ideas??
Six years on, with nearly £10m spent on reorganisation, the Council has ended up with more staff than ever before, a salaries bill which has increased by 66% and an additional bill for temporary staff approaching £3m. ?Leaner and more effective?? I don?t think so. ?Savings of £8-10m a year on administrative costs?? That?ll be the day.
Charles Morgan is a freelance arts researcher.
t: 01454 261350; e: morgangregory@lycos.co.uk