During the final passage of the Budget Bill for 2023-24 earlier this year, the then Deputy First Minister announced that a planned reduction of £6.6 million in the funding of Creative Scotland would be reversed, leaving Creative Scotland with the same Scottish Government funding in 2023-24 as it had received in 2022-23.
The financial position of creative, heritage and arts sectors remains difficult however. This is due to a number of factors: increasing costs, a sometimes slow recovery of audiences following the pandemic, and longer-term funding pressures. This extended blogpost looks at the longer-term trends of public funding of culture by national and local government in the context of current cost pressures.
This is longer than our normal blogs, so we have added a contents popout below for ease of navigation:
A precarious situation
In the past year you might have heard that the culture sectors are facing a “perfect storm” or quite alarming predictions of significant numbers of organisations being at risk of failing. For example, last autumn saw the company that runs the Edinburgh Film Festival go into administration and more recently we have seen campaigns to prevent the closure of local libraries.
The funding of the cultural sectors has been a perennial consideration of this Parliament. A recent report by the Constitution, Europe, External Affairs and Culture Committee noted the pressures on the sector and recommended the Government take an innovative approach to support. The Committee suggested:
- additional public and private investment
- mainstreaming culture so that other policy areas, such as health, fund cultural activities which support outcomes in those areas
- multi-year funding.
The equivalent Committee in the previous session of Parliament was also concerned with how the arts were funded. Its 2019 report Putting Artists In The Picture: A Sustainable Arts Funding System For Scotland made similar recommendations. It also noted the contribution local authorities make to supporting the arts in their areas, and recommended that the Scottish Government work to reset the relationship between it and local government.
Scottish Government support to creative, arts and heritage sectors can be either directly through Scottish Government grants to national collections or companies, or through agencies such as Creative Scotland or Historic Environment Scotland.
This section explores the longer-term trends in funding and also shows the real-terms changes over the past decade or so.
First off, a bit of jargon-busting. “Revenue” or “Resource” is funding that is to be used for day-to-day spending like salaries or fuel bills. “Capital” is spending on things that will endure, like a building or a painting for the national collection.
“Real terms” is when I use economic data (the Treasury’s GDP deflator, March 2023) to estimate the effect of inflation – this is not perfect, but it is a way to account for the fact that £100 in 2014 bought more than £100 will now. In this blog, the bar charts represent the cash terms data and line charts show the real terms changes.
Indexes explained Real terms in this blog are presented as indexes. This means that we give a reference year the value of 100 and every other year is represented as a proportion of this value. Example: if the real terms funding in 2014 was £50 million and that is our reference year, that is shown as 100. In 2015 if the funding was £40 million, the index in 2015 would show 80 (80% of funding in 2014); if in 2018 the funding was £55 million, the index for this year be 110, 10% more than the funding in 2014. This approach means we can see the relative changes year on year and the percentage change from the reference year.
The Scottish Government’s budget is split into four levels: Level 1 is at the level of a Cabinet Secretary’s portfolio; Level 4 is the lowest level of funding published in the budget documents.
Ten years: Creative Scotland and Other Arts
The first part of the budget I will look at is a Level 3 area called Creative Scotland and Other Arts.
“Creative Scotland” is for core funding for Creative Scotland which covers its operational costs and various grant schemes. “Other Arts” includes ring-fenced funding for Creative Scotland including for Screen Scotland, Youth Music Initiative, Expo, Festivals and Arts and Business and other smaller cultural opportunities and priorities; it also has included additional monies to make up for reduced national lottery funding. Not all of the budget under Other Arts goes to (or through) Creative Scotland, e.g. funding for the V & A in Dundee goes directly to that organisation.
The large jump between 2017-18 and 2018-19 in Other Arts was largely due to increased funding for Screen Scotland.
The figure for 2023-24 does not include the £6.6m the Deputy First Minister announced during Stage 3 of the Budget Bill. This will be transferred in-year and it is not yet known where this money might come from, or indeed if it would translate to a £6.6m increase in these budgets overall.
The chart below shows the relative real terms changes in the budgeted resource funding in the Creative Scotland and Other Arts lines compared to 2014-15.
What we can see here is a trend of real terms falling planned revenue funding between 2014-15 to 2017-18, then a large increase to support Screen Scotland in 2018-19. But then from 2018-19 the trend of falling planned spend in real terms continues.
These data are budgets, not actual spending. And Creative Scotland also distributes Lottery funding – Government grants are only one part of the picture in terms of the resources available to Creative Scotland.
The chart below shows the outturn funding from the National Lottery and Scottish Government to Creative Scotland. The 2022-23 data is the budget Creative Scotland was working to in that year. The chart shows that the National Lottery funding to Creative Scotland fell between 2014-15 and 2018-19 and since then has recovered somewhat. It also shows the significant support to the sector through 2020-21 and 2021-22 in response to the pandemic.
The chart below shows the relative real terms changes in the sum of Lottery funding and Grant in Aid funding from the Scottish Government, but not including emergency covid funding.
This shows that, ignoring emergency covid funding, the total grant funding for Creative Scotland in 2021-22 was about 10% lower in real terms than in 2014-15. This is despite the Scottish Government providing additional money for Screen Scotland since 2018-19. Therefore, the real terms cuts to the areas of Creative Scotland since 2014-15, that are not screen related, will be substantially more than 10%.
Ten years: Cultural Collections
The next area is Cultural Collections. This includes the three national collections: National Museums of Scotland; National Galleries of Scotland; National Library of Scotland. Cultural Collections also includes funding for “non-national” museums and libraries. Up to 2015-16 this line included funding for the Royal Commission on the Ancient and Historical Monuments of Scotland; for better comparability this is removed from the data presented below.
The chart below shows the resource and capital spending for this level 3 area.
As we see Capital spending can be quite volatile and the resource funding has a small upwards trend, in cash terms. The staff for the National Collections sit within the Scottish Government’s pay policy and the Government has provided additional funds to meet annual pay awards.
The chart below shows the relative real terms changes in the budgeted resource funding in the Cultural lines. The resource expenditure in this area has been roughly flat in real terms but with an up-tick in 2023-24. In 2023-24 funding was around 6% higher in real terms than in 2014-15.
Ten years: National Performing Companies
The National Performing Companies are: National Theatre of Scotland; Royal Scottish National Orchestra; Scottish Ballet; Scottish Chamber Orchestra; and Scottish Opera. Funding in this area also provides for the international touring fund.
Funding for NPCs has remained flat in cash terms since 2016-17. The chart below shows that this represents a real terms cut of over 20% in the past ten years. These companies also generate their own income but they are nonetheless reliant on the core Scottish Government grant. A report in 2018 showed that core grants represented around 54% of the NPCs’ income in 2016-17 and 61% in 2017-18. Ticket sales accounted for 25% and 18% for those years.
Historic Environment Scotland
HES runs many of Scotland’s historic buildings. It is also the strategic body for the historic environment in Scotland and provides grants to the sector. It was formed in 2015 through the merger of Historic Scotland and the Royal Commission on the Ancient and Historical Monuments of Scotland (RCAHMS).
HES receives a significant amount of money through entry fees and memberships. The Scottish budget includes estimates of this income and not always accurate, for example the estimate for income in 20-21 was not reflective of the income generated in that year which was heavily impacted by the pandemic. The chart below shows the total planned Scottish Government grant (ignoring non-cash) to HES and its estimated income. For 2014-15 and 2015-16, the budgets for Historic Scotland and RCAHMS are added together.
The chart shows a growth in the running costs of HES in this period. Up to the pandemic, this was mainly funded through increased commercial income. Government support was increased substantially after the pandemic.
The chart below shows the relative real terms changes in the budgeted resource and capital funding of HES and its predecessor bodies over the past 10 years. The increase in grant funding for HES to mitigate the fall in earned income after the pandemic has been significant. The grant funding in 2023-24 was significantly higher in real terms than in 2014-15.
Local Government funding
The total planned Scottish Government funding on culture and the arts in 2023-24 is around £210 million, not including funding for HES, nor indirect funding for the arts for example through education.
This is roughly equal to the funding for culture by local authorities. Financial data presented here is based on collations of individual local authority outturns (Scottish Local Government Finance Statistics workbooks and 2022-23 Provisional Outturn and Budget Estimates).
There are 32 local authorities in Scotland and a variety of ways to fund culture in those 32 areas. Some have Arms’ Length External Organisations to run their culture services and how spend in these areas is presented can vary. This data is Net spend – so does not include spend funded through local authorities’ commercial income (ticket sales, rentals, coffee shops’ income etc.).
The areas I will look at here are spend on museums and galleries, other cultural and heritage and libraries. There was an increase in funding on these areas around 2014-15 which is possibly due to the Commonwealth Games. To avoid starting on an unusually high year, the data presented starts at 2011-12. The data includes a budget estimate for 2022-23 which is not directly comparable to the other data in the table (we don’t have the outturn data for 2022-23 yet.
Because this data is what was spent, rather than what was planned for, the impact of the pandemic in 2020-21 is more visible. Spend on museums and galleries and other Cultural and Heritage activities goes up and down in cash terms over this period. For libraries there is a clearer trend of reduced spend in cash terms.
The charts below show the relative real terms changes of local government spending on: the sum of museums and galleries and other Cultural and Heritage activities; and libraries. Again, the final year is a budget estimate and is not wholly comparable to the earlier data. Both charts show significant real terms reductions in spend by local government in these areas.
Covid support and recovery
Between March 2020 and March 2022 Creative Scotland issued emergency funding totalling £150 million, delivered in 18,000 separate awards to people and organisations in Scotland’s culture and creative sectors. There were also a number of direct grants to organisations from the Scottish Government and the sector benefited, to a greater or lesser extent, from economy-wide support packages such as furlough.
The cultural sectors have had a bumpy ride through the pandemic. Particularly those parts which rely on people turning up – live music, theatre, participatory activities, museums and galleries and so on.
At a UK level, the Cultural Participation Monitor which is undertaken by the Audience Agency along with the Centre for Cultural Value looks at people’s changing participating patterns since the pandemic. The Spring 2023 wave of this research found that around a quarter of people still see Covid as a reason that they do not attend culture events. However, cost-of-living concerns are now a bigger barrier with around 60% of people saying this is a barrier to attending cultural events.
As the data above shows, there has been a long-term trend of reducing real terms spend on culture in some areas of Scottish Government funding and local government.
This along with increasing costs and the slow return of audiences and participants will mean that many organisations find themselves in a precarious position.
This blog is not about whether the amount spent on culture is too little or not given the overall fiscal context. Others will make those arguments. However, spending on culture has not been a budget priority for the Scottish Government or (taken as a whole) local government. The majority of local government spending is funded by a grant from the Scottish Government.
The Scottish Government is currently refreshing the national Culture Strategy. In a letter in February 2023, the Constitution, Europe, External Affairs and Culture Committee called for the refresh to set out how the immediate challenges of the sector would be addressed and “a clear and strategic sense of how the Scottish Government is working to ensure a more sustainable future for the sector”.
Ned Sharratt, Senior Researcher, Education and Culture