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An enquiry backed by the UK’s four arts councils recommends that creative industry tax reliefs should be extended, that more cultural organisations adopt contactless giving, and that cities across the UK introduce fiscal measures such as a tourist tax to fund culture.

Photo of Cliffords Tower York
Clifford's Tower, York

Cities across the UK have been urged to bring together business, education and cultural leaders in formal partnerships to “unlock the full potential” of the arts as a driver of community cohesion and economic growth.

A new report, backed by the Government and the UK’s four arts councils, recommends the creation of ‘cultural compacts’ – collectives of key local stakeholders from a broad range of sectors – that would “secure the social and economic benefits” of embedding culture in civic life. 

The Cultural Cities Enquiry says such initiatives would attract greater levels of local investment and help find solutions to local challenges, such as regenerating high streets, developing tourist revenue, and supporting local creative talent.

The authors also recommend a series of other measures to boost growth in the creative sector, such as a greater consideration of the tourist tax across the UK, and support for arts organisations to embed contactless giving technology.

Speaking at the launch of the report – which comes the week after new figures estimate local authority culture funding has fallen £400m since 2010 – Arts Minister Michael Ellis pledged £110k in Government funding to support trial compacts across England.

“Culture is the lifeblood of our cities,” he said. “A greater diversity of ideas is absolutely crucial to strong cities, which means a stronger UK, at home and abroad.”

Effectiveness and sustainability

The enquiry looked into the resources available for culture in cities, and potential interventions that could improve arts organisations’ sustainability and effectiveness.

It was produced in partnership with the UK’s four national arts councils, and overseen by an independent board of sector leaders, including Arts Council England Chair Nicholas Serota and Seona Reid, Deputy Chair of the National Lottery Heritage Fund. The report makes recommendations for how culture could integrate communities and drive growth - and whether the use of loans, peer-to-peer lending, local sponsorship and crowdfunding could become more widespread.

It says that cultural compacts would use shared interests to promote creative and digital innovation and secure external investment.

A key part of their role would be creating business plans setting out local cultural priorities such as “reanimating city centres, increasing income from tourists or international students, or establishing a creative cluster”.

The compacts would provide a structure enabling the introduction of other recommendations in the report, which include:

  • Corporate Social Venture Funds, which would provide loans and business support for local social enterprises
  • An extension of creative tax reliefs to cover literature and popular music
  • The use of cities’ cultural property assets to revive high streets and city centres, which would help prevent displacement of cultural activity caused by urban regeneration
  • A series of creative talent pathways, setting out new and coordinated routes for developing creative talent, aligned with local priorities and including diversity targets for leadership and boards. It urges the Government to make apprenticeship levy rules more flexible.

The report says that the Corporate Social Venture Funds would enable the cultural sector to scale up its use of social investment. It also proposes new tax measures including tourist levies and BIDS+ - an expansion of the existing remit of Business Improvement Districts, that would allow areas where businesses invest in local culture to share in additional tax receipts.

A further recommendation is that cultural organisations adopt contactless giving technology to increase their donations income.
The report warns that cities “can’t afford to stand still”, as cities around Europe are prioritising cultural investment in the global competition for talent, investment and tourists.

Explaining the Government’s reasoning for backing the recommendations, Culture Secretary Jeremy Wright said: “Local people know their towns and cities best. By bringing people together to work in partnership, I hope the culture and creativity that makes our communities unique can continue to flourish.” 

Enquiry Chair Jayne-Anne Gadhia, CEO of Virgin Money, said the study aimed to help cities “unlock the full potential of culture”.
“Smart investment, innovation and collaboration are at the heart of our proposals to radically increase the ability of cities to use arts and culture to maximise the social and economic benefits of a city’s culture for everyone,” she said.

“There is a huge opportunity to work together to attract and enhance investment in culture across the UK and so attract and support the diverse and talented people that will ensure that our cities thrive through social and economic growth”.

Cllr Clare Coghill, a representative of London Councils, commented: “We welcome the recommendations of the enquiry and agree on the importance of a place-based approach to promote cultural growth, create employment opportunities and ensure investment is relevant to local needs.”