The Arts Council

HL Deb 20 April 1990 vol 518 cc267-305

1.33 p.m.

Lord Rees-Mogg rose to ask Her Majesty's Government what are their plans for the future of the Arts Council, and in particular whether they intend that it should continue to enjoy independence under its charter.

The noble Lord said: My Lords, I am very grateful for the opportunity to open this debate on the Question which stands in my name. I should like to take the opportunity to thank my noble friends Lord Goodman and Lord Gibson, who joined me in asking for this opportunity.

The Question which we are to discuss arises out of the Wilding Report and out of the statement made in another place by the Minister for the Arts on that report. The Wilding Report has been generally welcomed, although there are obviously points in it which are controversial. It is the Minister's statement, which may well not have been perfectly understood—and the Minister has expressed some anxiety about that—which has led to the difficulties to which we have to refer. It has also led to the resignation as Secretary General of the Arts Council of Mr. Luke Rittner, who has been a most distinguished secretary general of that body and has contributed very great services to the arts. The fact that he felt unable to operate what he believed to be the forthcoming system is a matter of considerable concern to all of us.

What is the difference between what Mr. Wilding—who was himself Head of the Office of Arts and Libraries until he retired—has proposed and what is taken to be the understanding of the Minister's position? Why has one been welcomed and why has the other caused concern?

Mr. Wilding recommended substantial devolution of arts companies from direct funding by the Arts Council to funding by the regional arts associations. However, he recommended that a group of companies, probably amounting in all to about 40 and including those companies which have national status—major companies including all the touring companies and, very significantly, innovative companies—should remain with direct funding by the Arts Council.

The Minister's letter to the Arts Council has been taken to mean something different. It has been taken to mean almost total devolution from the Arts Council to the regional arts associations. It certainly sets up a Minister's steering committee, which will be chaired by the current head of the Office and Arts and Libraries—that is to say, by a civil servant responsible to the Minister—and will report to the Minister, and which is supposed to take the key decisions about devolution.

In broad terms, the Wilding proposal would amount to devolution of about 75 per cent. of the companies which are now directly funded by the Arts Council, but the other proposal, if indeed that is what is in the Minister's mind, would amount to devolution of about 95 per cent. In practical terms, the nub of the matter is whether there is supposed to be 75 per cent. devolution or 95 per cent. devolution.

It would certainly be my view that 75 per cent. devolution would leave an effective and strong Arts Council with genuine and sufficient knowledge of what is happening in the country. On the other hand, 95 per cent. devolution, leaving the Arts Council with only a strategic role plus oversight of the regional arts associations and of the five major national companies—the Royal Opera House, The South Bank and so on —would leave an Arts Council which was not sufficiently strong to be able to do the job it was left with.

Why should one prefer the Wilding Report to the further proposals which appear to be put on the back of it? The first point is the very ability and quality of the regional arts associations themselves. There is a tendency to look at such questions as drawings on a map, as though all the regional arts associations were identical, all equally capable of bearing the burden of responsibility. That is not so at all. Some of the regional arts associations are very good, well organised institutions. In general they have certainly been getting better. However, some of them have had very considerable and persistent problems. In particular, and this is a real difficulty, the largest of the regional arts associations —Greater London Arts—is also the one which has had the greatest problems.

Greater London Arts used to be a sister to the arts operation of the Greater London Council. That operation, under the guidance of my noble friend Lord Birkett, was a very good operation. However, since the Greater London Council was abolished, Greater London Arts has found it very difficult to find any secure base on the London boroughs and has gone through a succession of difficulties. It would be ironic if the administration which abolished the Greater London Council and the Inner London Education Authority were now to give great new responsibilities to the Greater London arts association, at least until it had proved itself far stronger than it yet has. The first point, therefore is that the regional arts associations are not all equally capable of taking on the responsibility.

However, there is also the question of cost. There is the basic, simple point that the Arts Council is a single insitution and 10 regional arts boards are proposed. On the face of it, to reach the same level of capacity to deal with clients, there will have to be 10 enhanced bureaucracies as against one at the present time. The overheads of the regional arts associations are already far higher than the overheads of the Arts Council. The last year for which those figures are available is the year 1987-88. In that year the Arts Council had an overhead —an internal spend—of 4-.5 per cent. of its total expenditure. The regional arts associations in total had an overhead—an internal spend—of 18.5 per cent. of their total expenditure, so the overheads of the regional arts associations are no less than four times as high as the overheads of the Arts Council itself It is no wonder that the arts companies are worried. They think that money which goes through the regional arts associations to them will have an overhead deducted on the way and it is difficult to see that they will necessarily be wrong on that. I am afraid that, if the proposal for complete devolution were to be implemented the probability is that a good deal of money would be lost to the serious arts.

The third objection is that the Arts Council would be left as a shell. One suggestion is that it would have only 20 staff against the present staff of about 160. That staff would not have the range of experience and skill to undertake the tasks that would be left to the Arts Council. In my view, it would not be possible to persuade the experienced people in the arts who work for nothing for the council itself or its panels to continue their work. I cannot see what appeal there would be in joining a body which had been diminished to that point. Nor do I even think that it would have much to contribute where it retained responsibility. I do not see it as being able to be effective in imposing accountability on the proposed regional arts boards. I do not see it as being able to make much of a contribution to supervising the funding of the Royal Opera House and the other major national companies which would be left to it, so it would be destructive of the Arts Council.

There is a fourth objection; namely, that most of the arts companies do not want it. During my seven years as chairman of the Arts Council, I never had a single arts company which did not object to a proposal that it should be devolved from central to regional funding. Let us take the case of symphonic music. There are four major national symphony orchestras, all of which, if the proposal were to be put into full effect, would be devolved to Greater London Arts. I have not asked all of them, but I know that most of them view that prospect with considerable concern and dismay.

There are four regional symphony orchestras, all of which tour widely outside their own regions and none of which regards itself as purely local in character. One of them, the Birmingham Symphony Orchestra, under Simon Rattle, has been one of the great artistic successes of the 1980s. They include the Halle Orchestra which is an absolutely first-class orchestra. They would be put against their will into regional arts association funding, in which, I am bound to say, they seem to have inadequate confidence. It would not be right to conscript those great orchestras into a system against their will.

However, there is a broad principle with which this House is particularly concerned because it goes wider than the Arts Council. I am glad to see that the noble Lord, Lord Bonham-Carter, who has been very much concerned with this principle in another area, will speak later in the debate. That principle is the so-called arm's length principle—the principle of the independence of the Arts Council.

Starting with the BBC, we have had a principle in this country that governments should keep out of the operation of broadcasting and the operation of the arts. In the case of the BBC, it is just as importnat that it should have its independence in respect of the creative art that it produces and shows as that it should have its independence in respect of its journalism. The two things go together.

The independence of the Arts Council is not something which should be regarded as a selfish benefit for the Arts Council itself It is the separation between the creative artist, the performing arts company and the government of the day which must be maintained. In this case, we have had the steering committee manned by the Minister's man and reporting to the Minister. What has the Arts Council itself, which has so far been pretty mild in its responses, said about that? It has said that it runs counter to the historical tradition of an arm's length policy.

If we could have them—and they would be of great benefit to the arts and would remove many anxieties—I should like three assurances. They would fit not too badly with the statement that the Minister for the Arts made in another place.

The first assurance would be that at every stage serious consideration will be given to the wishes of the arts companies themselves. By that that I mean the major arts companies. I do not say that every small arts company can have a permanent right to be funded directly from the centre whether or not that is a reasonable way to do it, but that the wishes of the major arts companies, as defined by Mr. Wilding, should be given the greatest possible weight.

The second assurance that I should like is that devolution will leave a strong and independent Arts Council. I am sure that, if one cuts too far, nothing useful will be left. The third assurance that I should like is that the Government remain as committed to the principle of the independence of the Arts Council as I believe the great majority of Members of this House are.

1.47 p.m.

Baroness Elliot of Harwood

My Lords, it is with some diffidence that I take part in the debate as I have had some experience of working with the arts and the Arts Council, but nothing compared with that of the noble Lords, Lord Rees-Mogg, or Lord Goodman.

My experiences have been provincial. I was chairman for a number of years of the Georgian Theatre in Richmond, Yorkshire. It was only a small theatre, but one of the oldest in the country. It was restored by my sister, Lady Crathorne, who raised the money to restore it. It has now been working successfully and happily for some 40 years in the Yorkshire region. I feel strongly in favour of the proposed devolution as we should never have been able to achieve that in Yorkshire unless there had been proposals to encourage local people, regions and enterprises. I would not at any point criticise or make any comment about what the noble Lord, Lord Rees-Mogg has said about devolution. I can speak only from experience.

I am in favour of devolution to regions. It encourages local support and local interests and it can develop local enterprises. I have seen that happen. I have seen local theatres, picture galleries, orchestras and plays encouraged and developed by co-operation with the local authorities through the Arts Council. I hope that that will not in any way be reduced under the new scheme. I think that it should be increased. The Arts Council will remain the governing body but the regional councils will be free to organise whatever they believe that the public will enjoy.

As we all know, finance is the vital item. There will never be enough money for what those who love the arts want to have. On the other hand, we should congratulate the Arts Council on having managed to obtain an extra 24 per cent. this year to distribute. I know that is limited but it is a step in the right direction.

I understand that under the new proposals there will be 10 regions instead of 12. Provided that they cover well all the areas, that should not hamper the work. I am impressed and delighted that the director of the Scottish Arts Council, Mr. Mason, is to be the managing director of the new body. Scotland is honoured by that choice. I wish him well. He has a tremendous task to fulfil.

I also approve of the suggestion that the Scottish, Welsh and Northern Ireland arts councils should co-operate together. That would help lead to further developments. I have had some connection with the Crafts Council, and I was interested to learn that that council should remain independent. I am sure that that is right. I hope that as much support as possible will be given to that organisation.

The suggestion made by the noble Lord, Lord Rees-Mogg, about the British Film Institute and films is an interesting one. I hope that it will work. It is a good idea that the British Film Institute should co-operate with the Arts Council in greater use of films and videos which can be made available to individuals and groups. It could lead to good propaganda for the arts. It would spread the interest over a wider field and encourage people to attend plays, and hear orchestras and music in general.

In the development of national arts there are encouraging signs. A total of 2,500 British museums are open and 100 million people went to museums in 1989. That is an increase from a figure of 80 million in 1987. I understand that the new British Library building will be completed in 1990. It will have the greatest collection of books and will cost, as noble Lords will know, some £400 million. We owe that great enterprise to the noble Viscount, Lord Eccles, who planned the project and secured the money for it.

As I mentioned previously, money is always in demand. However, I was glad to read that grants from private bodies and private sources—business and so on—have increased enormously in recent years. They are the people who can truly help the great national organisations such as the Royal Opera House, Covent Garden, the Royal Shakespeare Company, English National Opera, and the National Theatre. All those organisations are dependent on the Arts Council but they could also find enormous encouragement in grants coming from private sources. Grants have increased—not enough, as we all know —and public support has been encouraged.

Unfortunately, for all these things, like everything else in life, costs increase. It is very difficult to cover all that is needed for the future. These great institutions attract people from all over the world. I do not look upon that money as money that is just spent and given out; it is an investment. It means that thousands of people can come to this country for our arts, music and museums; they would not come if those facilities were not available. They bring a tremendous number of people to this country and that is very valuable for us.

We all support the Arts Council and wish it well in the reorganisation. Mr Luce is to be thanked and supported by us all. He is doing a splendid job. It is up to us to try to help in every way we can to make this work as successful as possible.

1.55 p.m.

Lord Jenkins of Putney

My Lords, we are all very glad to hear again from the noble Baroness, whose record of interest and support for the arts in this country is quite unrivalled. No doubt she will agree with me that the contribution that private investment can make to the arts must always be the icing on the cake. It cannot and is not intended to replace the fundamental role of the state. I am glad to note from the Minister's report (which is basically what we are discussing today) that he does not take the view anywhere in his statement that there is any considerable possibility of replacing the role of the state with private investment. The discussion is a different one.

There are those who see the changes proposed not as leading in themselves to the destruction of the Arts Council or to the disappearance of state support. Rather they see the situation as one from which at some later stage that might develop. In other words, it is a beginning and a step by which, gradually over a period of time, the role of the Arts Council would be whittled down and eventually we should find ourselves without the vital part which state support plays in the arts today.

My view is that that is not the case; or perhaps I should say not necessarily the case. Indeed, it could become the case. Almost anything that one does could become something else. It would be perfectly possible to whittle down the role of the state without abolishing the Arts Council. All that one has to do is starve the Arts Council. After all, for all its vaunted independence the Arts Council is the creature of the Government. All the people on the Arts Council are place men of the Government. The Government maintain in it a degree of independence because it is necessary that the Arts Council should be seen to be independent, even if it is not as independent as it seems. But if one wants to whittle down the role of the state any government can easily do so without going through the laborious procedure of decentralisation.

Noble Lords will be relieved to hear that I shall not make so long a speech as I had first thought I might have to make. The reason that I have been able tC' dispose of most of my speech is that I did not hear from the noble Lord, Lord Rees-Mogg, the broad attack on the whole proposition of devolution that I thought I might hear. The noble Lord shakes his head and is agreeing with me. In other words, he says—and I think I can join with him—"I am not against devolution as such. I am worried about the consequences of the proposal that the Minister has put before us". I can go along with that proposition. I cannot go along with the general proposition that devolution in itself is wrong and that the Arts Council must continue to be controlled centrally by the state. That would fundamentally be contrary to something in which I strongly believe.

Recently I looked again at Jennie Lee's first White Paper in 1966. Indeed, it is the only White Paper on the arts that has ever been prepared. It is perhaps high time that that lacuna is filled. I noticed that from the beginning the Minister was concerned that the tendency of the capital city to absorb the arts and, as it were, become the only seat of artistic excellence in the country should be fought against. So long ago at the very beginning, in the White Paper the importance of decentralisation was emphasised. It may have been because the then Minister saw that the action of the Arts Council, when it was first established immediately after the war, in getting rid of its regional offices was a mistake.

It was the first stage in a process of centralisation under which for many years the Arts Council became more centralised and "Londonised". That was not entirely the fault of the Arts Council. To some extent it was the inevitable consequence of London's growth and emergence as a capital city rather than simply one of a number of important cities as in pre-war years. At that stage the Minister was driving against such centralisation. One has constantly to do so because London is over-centralised.

I warmly welcome the Minister's decision to introduce the proposal of decentralisation of control and responsibility, although I recognise almost as clearly as the noble Lord, Lord Rees-Mogg—perhaps not quite so clearly because his experience in the matter is much more recent than mine—the dangers in the process of devolution. That nearly always sets the minds of people who have been closely involved in central activity against the proposition of devolution because generally speaking one devolves to people who are less efficient than oneself.

I refer to the dissolution of the British Empire, the disappearance of the British Commonwealth and the devolution of those areas to national governments. Some of the national governments were pretty disastrous, were they not? However, will anyone argue that because of that factor that event should not have happened and that we should have kept the Commonwealth centrally organised? That cannot be done. Devolution has come about. One has to ensure that it is done properly.

I have read the Minister's letter to Mr. Palumbo. I have read the speech. On the whole I believe that the Minister intends well. He deserves the praise that he has received. To that extent, I join in it. However, dangers might arise from devolving the authority of the Arts Council upon a number of regional bodies of varying efficiency and experience. They might not be able to be relied upon in all cases to exercise the skill and integrity that has characterised the Arts Council as the state's main distributor of its patronage. Can the regional bodies resist not only the tendency but the strong temptation of politicians at a local level to impose their will upon regional bodies as successfully as the Arts Council has resisted the temptation nationally? Possibly not so. There is a danger that a local councillor, being close to the regional body, may seek to have a greater influence upon the activities in the arts at a local level rather than at national level.

The proposition of the arm's length principle must not be thrown away. I has to be strengthened. One has to ensure that is adopted at a regional level to the same extent or to an even greater extent than it exists at national level. The preservation of that principle has been responsible for the excellence of the British artistic scene since the war. It is vital that it is retained. Politicians must keep their fingers out of what happens on the stage and elsewhere.

As Arts Minister, I tried unsuccessfully to introduce an element of devolution some years ago. Among the proposals that I put forward was that the regional associations should be funded directly from the Ministry rather than through the Arts Council. It was a somewhat more drastic proposal than the relatively mild suggestions put forward by the present Minister. Whether the proposal was right or wrong, I received much less support from my Cabinet than Mr. Luce has from his for this proposal.

On the other hand, I never wished to lose the Arts Council. I believe that I am the only Arts Minister who has ever been a member of the Arts Council before becoming Arts Minister. I had the privilege and pleasure of serving under the chairmanship of the noble Lord, Lord Goodman. He and I have seen eye to eye on arts matters for a very long time. This afternoon there may be a difference between us on this point but I hope that it will prove only a difference of emphasis, such as may exist between the noble Lord, Lord Rees-Mogg, and myself, and not a total difference of view. It would be a disaster to open the door to the horror of direct government control of the arts. That is no more desirable than to open the door to government control of the media of communication.

I therefore hope that the noble Lord, Lord Rees-Mogg, will be reassured about the future of the Arts Council. The charter should be altered or replaced in order to admit the introduction of selected or nominated members of the council. I do not believe that the proposals should be opposed in principle. They should be submitted to Parliament, examined in detail, and amended where necessary with due regard to the interests of the staff of the council whose work has not always received the credit that it deserves.

I regret the decision of the secretary of the council to submit his resignation on this issue. There may be reasons behind that which are not apparent to us.

I cannot believe that his resignation was a result of the ministerial statement. As I understood it, the decision that he was going to resign had already been made prior to that—I am wrong about that. However, there must have been something else behind it.

It is also my view that the recommendations of the steering group should be the subject of parliamentary debate in government time in due course. I recommend doubters to read again Jennie Lee's White Paper in 1965, A Policy for the Arts. The emphasis on the importance of developing the regional associations is no less important today. Indeed, one might say that with a highly centralising Government in office it is even more important.

As regards the question of devolution and what must stay in order that the Arts Council remains a credible body, I do not know whether the answer is 90 per cent., which I agree is too small, or 75 per cent. It is a question which should be considered carefully because it is important that the Arts Council should still feel that it is doing a worthwhile job.

I see a difficulty arising in respect of personal assurances. The noble Lord, Lord Rees-Mogg, suggested that organisations should have the opportunity of opting out. It is natural that a single organisation which is asked to change its master should be doubtful about doing so. However, in making a change it might be difficult to allow one body to opt out while allowing another to remain. I am not sure therefore whether the suggestion is practical.

There is total agreement between us on the noble Lord's final point. No change that is made shall make a fundamental difference. The changes must not have the effect of reducing the total financial input to the arts from the state and its organisations; that is whether we mean the state nationally, regionally or locally. The total input to the arts must increase at a greater level because inflation in the arts rises faster than anywhere else. That is because the arts are heavily dependent upon labour and it is in the nature of things that labour costs rise quicker than others. In deciding to subsidise the arts one is climbing onto an escalator and there is no possibility of ever getting off. Everyone must reconcile themselves to that fact. If anyone considers that there is an opportunity of reducing the state input they are much mistaken and that must be resisted.

There must be no erosion of the principle of the arm's length of the state keeping its finger out of the pie. It is vital that that should be preserved, extended and made general throughout the whole arts scene.

2.10 p.m.

Lord Donaldson of Kingsbridge

My Lords, I can follow the noble Lord, Lord Jenkins, on a number of points, particularly on the arm's length principle which I am sure all noble Lords will be steady in supporting. Indeed, some of us believe that there are risks in the present arrangements but I shall deal with that matter later.

The noble Lord, Lord Jenkins, has always been much more devolutionist than I. I agree that the Minister intends well and thank goodness he has not gone as far as the noble Lord wished some years ago. He will realise that that is a perfectly fair comment.

The main criticisms of the Minister's approach to the Wilding Report were put well and forcefully by the noble Lord, Lord Rees-Mog, and I have little more to add. However, the problem of funding the arts is not in deciding whether the money should go to London or to the regions. Anyone who takes any interest in the subject will be aware that there must be sufficient money for both. The problem is that there never has been sufficient because over the years the Arts Council has been so successful in stimulating demand from all classes in the regions that the need for more money steadily rises. There has never been enough money to do full justice all round.

It is natural that any regional organisation concerned with the arts should believe that it is neglected; and inevitably that is sometimes the case. It is a general problem in no way confined to the arts. Therefore it is not surprising that those in the regions tend to resent the central council, nor is that disturbing. However, I agree with the noble Lord, Lord Jenkins, that it is disturbing to see no sign of more cash thereby allowing both to flourish. There can be no priority between central and regional excellence; neither can flourish without the other.

One of the recommendations put forward by the Wilding Committee is to save £2 million as a result of reorganisation. In that connection two points arise. First, it is extremely doubtful that such savings can be made because the number of RAAs is being reduced only to 10 and not seven and much of the suggested saving was to come from that. However, Mr. Wilding said that the money saved should be used further to assist the arts. Does the Minister think that the Treasury would ever agree to earmarking the use of savings in that way? I am afraid that I do not.

While entirely agreeing with Wilding that local government associations must work very closely with the RAAs, which in general is the present position, the chance of getting any more money out of them is very remote after the Government's prolonged attack on their expenditure with rate capping, poll tax capping and so on. A reduction seems more probable than an increase from that source.

I find myself broadly in favour, as are the noble Lord, Lord Rees-Mogg, and the noble Baroness, Lady Elliot, with the Wilding suggestion of federation. However, that was based on a specific three-tier organisation hinted at by the noble Lord in his opening speech. The first tier is to be all the major institutions looked after by the Arts Council, and that includes local orchestras as the noble Lord pointed out. The second tier concerns decisions with the RAAs and the Arts Council about the most important matters in the regions' areas. The third tier involves the regions making their own decisions on all smaller issues. That is roughly what is recommended.

However, the Minister's policy—which seems to be a decision and not just a proposal—is to leave out the middle tier thereby leaving the Arts Council with no more to do than to allocate an agreed share of the whole to the major institutions. That is emasculating the Arts Council to an extent which is certainly not acceptable to me nor indeed, as we all know with regret, to the council's very able secretary-general. All decisions as to details are to be left to a steering departmental committee. Therefore, we have only the most sketchy idea of what they will be.

I do not wish to be beastly to the Government but I have a feeling that I have been here before. It is certainly not a new situation in this House but is rather one which we have seen far too often over the past f'ew years. The Government think up a scheme almost invariably based on a perfectly reasonable desire to save money and they then force it through in the teeth of those best acquainted with the practical realities.

It is really an abuse of the English language to call the Tory party "Conservative". It has always claimed that the word means saving the best of the past in a changing world, which indeed it does. However, time after time we have been presented with ill thought-out schemes which ruthlessly disregard the damage which may be done as part of the reorganisation and by Bills which had to be written as they went along and by reorganisations which, even if they contained the possibility of improvement, invariably left the people on the ground with too little money to run matters properly.

On this side of the House we are becoming tired of constantly being told that our only solution to problems is to throw money at them. The Government's delusion is that reorganisation is good in itself and that matters will somehow be worked out with a bit of luck and the help of a departmental committee even without adequate funds to do so.

However, we agree that the arts is a subject beyond politics and my objection to the Minister's approach is not political but is against its ineffectiveness. I remind your Lordships what Keynes said at the founding of the first Arts Council which noble Lords of my age or order will remember was a post-war transformation of CEMA—the Council for the Encouragement of Music and the Arts. That was founded during the war by the Board of Education. Keynes' triumph was to arrange that it should be funded directly from the Treasury. He said: I do not believe it is yet realised what an important thing has happened. State patronage of the arts has crept in. It has happened in a very English and informal way—half-baked if you like … At last the public Exchequer has recognised the support and encouragement of the civilising arts of life as a part of their duty". I believe that the Arts Council has now reached the stage where that idea of Keynes could be further developed throughout the whole country. If the Wilding suggestion of federation is accepted in its entirety, that will be a proper and effective development. But let us have no more half thought-out schemes which are left to a departmental committee to work out.

The second half of the noble Lord's Question is of the greatest importance and everybody has spoken of it. The Arts Council must continue to enjoy independence under its charter, but the work of the proposed committee reporting to the Minister must be scrutinised in a hostile rather than a friendly way. The arm's length principle is fundamental to the council's success. My noble friend Lord Bonham-Carter will deal more fully with that argument later.

I hope that the Minister can persuade his right honourable friend to read the report of this debate very carefully and allow himself to be influenced by the doubts and criticisms so widely held and stated here.

2.20 p.m.

Lord Goodman

My Lords, may I at the outset say how grateful I am to the noble Lord, Lord Rees-Mogg, for suggesting that this discussion should take place? It is a discussion of considerable importance and the fact that our Benches are not full of people avid to discuss it is a disappointment. Many years ago when I was chairman of the Arts Council one of my few principles was that an essential freedom of any Englishman was freedom from culture. If I may say so, that is sometimes unhappily reflected in the composition of our Chamber.

The only other person to whom I wish to convey thanks is the noble Baroness, Lady Elliot of Harwood. She made a remarkable speech, although I do not entirely agree with her emphasis on the local interest in regional associations. If one examines that point, the local public are not interested in the association; they are interested in individual institutions. In Manchester they are interested in Halle; in Stratford-upon-Avon they are interested in the Shakespeare theatre. Very few people even know what the constitution of their arts council is, and I do not believe that making this change will encourage support for the arts. In some ways it might discourage support for the arts, but that is a question which requires rather longer discussion than we have time for this afternoon.

I should like, in the few minutes available, to convey to the House the exceptional reputation which the Arts Council has enjoyed, not merely in this country, despite the constant criticism which, needless to say, comes from dissatisfied applicants who have either had their grant application refused or inadequately supplied, or from people who do not like the arts at all. I am sorry to say that one finds an element of that kind in every party. It is not a situation where any chairman of the Arts Council could say that it was easier to do business with a Conservative council rather than a Labour council. My experience was that on the whole it was slightly more difficult to deal with Labour councils.

Whatever the justice of that situation there is not the slightest doubt that the one hallowed principle that needs to be maintained is the so-called arm's length principle. I am disappointed that the previous speeches treated the infringement of that principle with such gentleness. It is the most flagrant and brutal infringement of the arm's length principle that we have encountered on the basis of a report from one civil servant. I know nothing about the gentleman, but I am sure he is highly competent. That report was confirmed by one Minister, who is relatively inexperienced but a very nice man. The fact remains, however, that on the basis of those two opinions it is proposed to invade a principle which is regarded with admiration and almost hallowed both in this country and in other parts of the world.

I should like to recommend to the House a symposium that was published by Encyclopedia Britannica Inc. in 1977. The symposium represented the views of art experts and practitioners in five countries. Perhaps I may be permitted to incorporate in my speech one or two observations made about England in the publication. They would be useful for the Government and the House to consider. One section is headed "Great Britain: patronage and passivity". I shall not read the whole of it because it is much too long but I give two extracts. I should point out that this was written and published abroad. The writer refers to the creation of an arts council and states: The new agency was to be the principal vehicle for distribution of official support for the arts; at the same time, elaborate measures were taken to ensure its formal independence. The council is composed of private citizens who are appointed by the government but who have complete authority for setting policy and for distributing the funds it receives. The politicians leave the council free to spend as it thinks fit. Parliament provides the funds but does not lay down purposes or priorities for which they must be spent". That is directly at variance with the suggestion that there should be a steering committee answerable to Parliament. If anyone cares to write to me I shall be happy to secure a copy of this publication for them because it is basic reading for anyone concerned with the administration of the arts in this country. I quote one more passage which I hope will sink in: Whatever the particular contours of Arts Council policy, British cultural life in many fields has flourished during the period of its existence. London has regained its position as a world center of drama, music, opera and dance. Its actors, actresses and directors have given it a leading position on the international stage. The country has made a remarkable record in finding new playwrights and choreographers. For the first time since Purcell, Britain has produced composers who have attracted international admiration. The least that can be said for the government's aid to the arts, therefore, is that it has avoided the danger of official stultification". All I wish to say about that is that anyone reading that on the morning when the Minister's letter appeared would be in a state of total bewilderment. One would find it difficult to believe that this was the view of the Arts Council taken by informed experts in another country and contrasting with a view of an Arts Council which is on the verge of total destruction. If I may say so, if this policy is put into effect one would have great difficulty in finding an insurance company to issue a policy for the survival of the Arts Council.

My noble friend Lord Rees-Mogg put forward a proposal for compromise. I support that proposal only in the sense that it is better to have something than nothing. The Government should think again about pursuing this policy in the way that they have. One has an unhappy feeling that people organising this policy know very little about the Arts Council. They do not appear to know anything about its diverse functions that have nothing to do with money. On my journey here this morning I prepared a short list of those activities. I am sure it would astonish the Minister to learn of them. For example, the Arts Council advises the Government on copyright situations. It advises the Treasury. I took two deputations to the Treasury in regard to income tax on authors, which is of crucial concern to the Arts Council. The Arts Council has a committee on and has published an elaborate book on matters of censorship. It has established the new activities committee. It has been prominent in establishing and lobbying for public lending rights. Who will do all that if we have 10 regions with responsibility divided between them? It is an absurdity.

I have an unhappy feeling that whoever devised this plan knew nothing whatever about these extra-mural activities which have been carried out so industriously and quietly by the Arts Council over the years. It would be a very great pity if the Arts Council were deprived of the capacity to do these things because of a governmental review.

I could continue for a very long time but I know that we are all anxious to return to our country homes and so, in mercy, I conclude by saying that my hope is that the debate will draw the attention of those in charge of these matters to the fact that there are a great many imperfections in what is proposed which need to be rectified.

2.30 p.m.

Lord Sainsbury of Preston Candover

My Lords, I too am grateful to the noble Lord, Lord Rees-Mogg, for opening this debate and I agree with a very large part of what he said. Among other things he spoke about his fear of increasing bureaucracy. Any of us who have had to deal with the Arts Council or with arts management share that fear of bureaucracy. About 10 years ago I was invited by the Arts Council to join a working party under the chairmanship of the noble Lord, Lord Hutchinson. There were four of us who were invited to look into the structure and management of the Arts Council.

As a member of that working party, I was amazed at the amount of detailed work that went on in the Arts Council and at its extraordinarily clumsy, awkward and difficult structure. I counted no less than 45 committees in the Arts Council at that time, about half of which appeared to report to the Arts Council itself The load of paper, the load of work, the amount of talk and the little decision taking of the 45 committees surprised me greatly.

Much has changed since then. I believe that many of the recommendations of our small working party were adopted. I am perfectly certain that the number of committees and the efficiency of the Arts Council, in terms of its bureaucracy and decision-taking process, is greatly improved. However, recent experience with something which is rather ironically called "incentive funding", which is to be a reward for enterprise, was handled, regretfully, in a most bureaucratic, unimaginative and unenterprising manner. When an Arts Council has such a broad spread of responsibilities and such a vast variation between the largest and smallest of its clients, it is very difficult to give the attention which that very early Keynesian Arts Council was able to give to all its clients. It tried hard, as did its dedicated Secretary-General and his staff. I very much regret that they have resigned.

In principle I share the view of the noble Lord, Lord Rees-Mogg, that there should be devolution. I believe that his figures are much more likely to be right than perhaps the implication that the figure should be 95 per cent. I read what was said in another place. I read that the associations will be responsible "for most clients". When I came to read the Minister's letter the emphasis seemed to be very different. He said in that letter: I believe that in principle all regionally based organisations should become the day to day responsibility of the regional arts boards'. As someone who is innocent of the ways of ministerial decisions, there seems to be a very marked contrast of emphasis between what was said in another place and what was said in the letter written to the Arts Council. What should govern the question of who is a client of the Arts Council as opposed to a regional board should be the decision of the Arts Council and not of the Minister. I do not think it should be a question of what the client would like; it should be a question of where the Arts Council, taking into account that much of its work should be devolved, thinks it can bring special expertise to a decision. There are the kinds of examples which the noble Lord, Lord Rees-Mogg, gave and I agree with them.

There is another point which has not been mentioned yet. As I understand it, the right of the Arts (Council to nominate members to the regional boards—I believe that it does so now to the extent of two in each association —is being ended. That is very sad. The Arts Council is very well placed to suggest members of regional boards. I urge the Minister to reconsider that decision. In the end the way in which the Arts Council works so greatly depends upon the money that the Government give it.

As a client —I declare an interest as chairman of the Royal Opera House—I find it easier that the principle of arm's length is upheld and there is enough money to go around. When there is not enough money to go around I would consider it most important to complain not only to the chairman of the Arts Council but also to his paymaster, the Minister.

For a structure to work well it must be properly funded. I have to give the House the example of how badly it has worked lately. The Priestley Report was a thorough and lengthy assessment of the needs of the Royal Opera House and the Royal Shakespeare Company. The year after the report had been accepted by the Government and funds had been voted in acordance with its recommendations the report was forgotten. To all intents and purposes it was forgotten by the Arts Council. The formula that it suggested was ignored. As a result, in the five years that followed, the grant to the Royal Opera House was reduced in real terms every year. By last year we had experienced a 15 per cent. reduction in grant in real terms.

We have been told of the marvellous recent Vote that the Minister has been able to achieve for the arts. We received an increase in grant of about 11 per cent. In the current year it is substantially more than inflation. But last year's very small grant of 1.7 per cent., taken with 11 per cent. in the current year, makes a total of 12.7 per cent. That still represents a reduction over that two-year period of 3 per cent. in real terms.

We are commissioning an independent survey of opera houses throughout Europe. I shall not be surprised if it shows that the Royal Opera House is the most underfunded major opera house in the whole of Europe. If the Minister is going for a new structure he should so arrange funds that it is possible that the major institutions of this country are funded adequately. The very worthy wish of the Arts Council through its policy the Glory of the Garden, which turned out to be a disaster at Covent Garden, to obtain more funds for the regions should not be at the price of the major art institutions in the centre. They serve the nation as a whole and not just those who go to the actual performances. Private funding cannot bridge the gap. We have increased enormously our private sponsorship, by 60 per cent. in two years, but we still have a huge gap which is conservatively estimated at £2 million this year against what the objective Priestley Report would have suggested.

I support devolution. I hope that as a result a better balance is kept between the great and largest institutions and the important mass of institutions around the country. I hope that we do not get more bureaucracy through spreading the load to the different regions. Being smaller they should be carefully controlled to avoid any increase in bureaucracy.

2.39 p.m.

Lord Annan

My Lords, I wish that I could be as sanguine as the noble Lord, Lord Goodman, that the Government will listen to what is being said in this debate. The almost unanimous approval in another place when the Minister made his statement gives me great grounds for fearing that whatever is said here will not cut much ice. Of course we know why there was such unanimous approval. Every Member of another place representing a constituency naturally supports a set-up which he thinks will reward the interests of his constituents.

I myself think that the Government's policy follows almost inexorably from the famous publication of the noble Lord, Lord Rees-Mogg, The Glory of the Garden. We should also remember that it is 50 years since Maynard Keynes set up CEMA, which was the forerunner of the Arts Council. During that time enthusiasm for the arts has spread over the whole country and it is natural therefore that there should be some devolution to regions. The sheer number of candidates clamouring for funds means that it must really be beyond the capacity of one body sitting in London, however dedicated, lively and contentious its committees may be, to judge between different claimants.

How big is this devolution to be? There the point made by the noble Lord, Lord Rees-Mogg, is fundamental to this debate. Is it to be 75 per cent. or 95 per cent? And, for example, what is to happen to that superb orchestra in Brimingham under the leadership of Simon Rattle? Is it to be considered a national orchestra or merely a provincial orchestra?

However, let us be under no delusion: under present proposals this is the end of an era. Keynes' vision was never realised until the noble Lord, Lord Goodman, became chairman of the Arts Council, and that was a singularly glorious chapter in its history. From now on, the Arts Council is going to be like the old University Grants Committee; and how odd it is that the Government, having abolished that committee, now create a body that is in almost exactly the same relationship with these regional arts boards as the University Grants Committee was with the universities—but with a difference. No single vice-chancellor ever sat on the University Grants Committee, whereas here it is proposed that five out of the 10 regional arts boards should have direct representation on this award-giving body. That really seems to me, organisationally, to be mad. Either you have none or you have the lot. Of course I am in favour of none because I think that anyone who is chairman of a regional arts board is bound to want to paddle his own canoe and to take biased decisions.

May I issue a warning here? It follows immediately from what the noble Lord, Lord Sainsbury, said a moment ago. Unlike West Germany and Italy, where no single city is the cultural capital of those countries, in both France and in Britain the capital city is also the cultural capital. Tourists come to London to see the theatre and hear opera and concerts; and it is London that sets the artistic standards for the rest of the country. If those standards decline, Britain will be elbowed out of what might be called the cultural contest. What is worse, the whole country's standards will fall.

I am lost in admiration for the vitality of Glasgow's cultural life when I go there. I remember very well touring in the 1950s the provinces with the committee set up by the Gulbenkian Foundation under Lord Bridges to support the arts. I remember how struck I was with the determination of Newcastle to extricate itself from virtual cultural bankruptcy; and it has done so, of course. However, the success of the arts in the regions depends on London. The Welsh National Opera is a marvellous company and it has had the good sense to employ the dazzling German producer, Peter Stein. However, Cardiff will never be a rival to Milan's La Scala. So let us remember that London needs the subvention because the whole of the cultural life of the rest of the country depends on it to some extent.

I hope that when he comes to reply the noble Lord will tell us a little more about what is called the strategic role of the Arts Council. I do not quite follow the noble Lord, Lord Goodman, in thinking that the Arts Council will disappear. As I understand it, it will certainly remain but it will be given a strategic role. That is a fine phrase, but what the devil does it mean? I remember when the noble Lord, Lord Gibson, was chairman of the Arts Council. I once asked him at a meeting whether the council regarded itself as responsible for rationalising artistic activities. He replied that in his view part of the council's role was, if it could, to drop pennies into the hats which clients held out. Has there been a change of policy? That is the point to which I should like the noble Lord to address himself.

In the view of some good judges, there are too many orchestras in London and musical standards have suffered as a result. I used to hold the view that there was at least one too many ballet companies in the country supported by the council. Is the council now intended to review the role of the major companies—the Royal Shakespeare Company no less than the orchestras?

May we also hear a little more about the so-called strengthening of accountability? The Minister referred to forward planning and budgeting by the regional boards. Does that mean, for instance, that a regional board will require a theatre to submit budgets for all future productions in that theatre? That great impresario at H. M. Tennent, Mr. Hugh Beaumont, was an old friend of mine. He once told me that he was astonished at the laxity of control in our great state opera and theatrical companies. He could put on "My Fair Lady" and keep it within budget only by exercising the most rigid personal control. He had to ensure that none of his leading ladies could declare that the costume or hat she has to wear in Act III should be disposed of and another garment or headgear more suitable to her taste be substituted for it. If he could keep those people in control, why can companies financed by the Arts Council not do the same?

Of course imperious renowned producers of international reputation may refuse to come to this country to produce operas or plays unless they are given carte blanche. But there are ways of meeting their demands without giving way on the point of principle that budgets for productions must not be decorous garlands but should be regarded as fetters that can only be struck off in exceptional circumstances.

Lastly, I am bound to say that I regard with Stygian gloom the Minister's enthusiasm for substantial representation on regional boards by local councillors. As the noble Lord, Lord Alexander of Potterhill, often says when we discuss education in schools, the politicisation of education in the 1950s was a disaster. I predict that we shall see an increasing politicisation of the arts by local councillors when they set their minds to it.

Do noble Lords remember the noble Lord, Lord Boyd-Carpenter, reassuring the House in the most dulcet tones that the infamous queer-bashing Clause 20 in the Local Government Act, which was inspired by the very proper desire to stop the circulation of books in schools advocating homosexuality, would never be used to censor works of art? However, last year Kent County Council, with immense self-righteousness, managed to stop its schools from seeing a production of Benjamin Britten's "Death in Venice". Does the noble Lord regard that as a splendid achievement in the promotion of the arts?

It is not clear who will appoint members to the regional boards. Can the noble Lord tell us whether it is to be the Minister himself, and whether anyone will advise him on that matter? Noble Lords have been trying to put the view to the Government that no one really expects the Minister himself to begin to interfere personally in the grant to this organisation or that company, but they are worried that in some subtle way the membership of these boards, and perhaps of the Arts Council itself, will tend to be drawn not necessarily from a political party but from people who hold similar views to that party. I should like some reassurance that there will be a diversity of views on the boards. That is all I have to say and I apologise for having detained the House so long.

2.51 p.m.

Lord Birkett

My Lords, I can happily be brief as so much has been said so eloquently already. I, too, am grateful to the noble Lord, Lord Rees-Mogg, for introducing this debate. He asked for reassurance from the Government on three points but the debate has brought up two vastly important points of principle. One concerns independence and the other concerns the degree of devolution in this matter. Everyone seems to welcome devolution, and indeed it looks reactionary and undemocratic not to do so. However, the exact degree of it depends, as the noble Lord, Lord Rees-Mogg, pointed out at the beginning of this debate, entirely on the quality of to whom one hands over. The noble Lord, Lord Jenkins of Putney, was brave enough to point out that it is often the case that devolution involves handing over responsibility from a reasonably efficient body to a series of inefficient bodies. At any rate that has been known to happen. Of the two principles I have referred to, obviously independence is by far the most important and any erosion of that principle would be by far the most dangerous.

I do not regard the matter with quite the same view as the noble Lord, Lord Goodman, who was severe in his condemnation of the Minister's Statement because he thought it eroded the principle of independence. I may be naive in my thinking and I may have mistaken the intention of the Minister's Statement, but it seems to me that the steering committee that was referred to in the Minister's Statement in another place is a steering committee which is designed to make the working nuts and bolts of this devolution come together.

The arm's length principle is surely designed to prevent governments from influencing the arts and, above all, from influencing the content of them, lest any interfering or domineering government should be tempted to start down the path which decades later could end in the kind of censorship that we have seen under totalitarian governments. We may think that is unlikely in this country, God willing, but it is the start of a path which should never be followed. It seems to me that that is what the arm's length principle enshrines and what it defends.

If I understand the matter correctly, I do not think that principle is endangered by the steering committee. However, the minute the steering committee starts to determine in what way the newly organised regional arts boards should spend their money and upon what clients and in which particular cultural climate and temperature they should operate, I shall share every moment of the alarm of the noble Lord, Lord Goodman. However, at the moment I do not share that alarm. I am more inclined to share the alarm of the noble Lord, Lord Annan, about the presence of local councillors. I cannot join the noble Lord in Stygian gloom, but I am prepared to stand beside him in a light shadow on the matter.

In my experience politics is as rife in local government as it is in central government. It can be as dangerous. Above all, it is twice as changeable if that is possible. Therefore I am enormously relieved to see embodied in the Minister's statement an absolute embargo on local councillors of any political complexion being in the majority on the local arts board. I am dismayed to find that they may nevertheless be its chairman. Although there are many exceedingly bright and wise local councillors, for a local councillor belonging as he invariably will to one political party or the other to be the chairman of a board seems to me to be dangerous. I am surprised that the Minister turned his face against the suggestion that they should be banned from the boards.

It seems rather churlish to say such a thing in view of the many bright and intelligent councillors I know, but I believe that the principle is probably wrong. I urge the Minister to make sure that the local arts boards do not take on the political complexion that the noble Lord, Lord Annan, so graphically feared. If they did so I believe that they should be reformed and their constitution changed forthwith.

On the question of the extent of devolution, I share the view of the noble Lord, Lord Rees-Mogg, regarding the equation; namely, that 75 per cent. might be tolerable but 95 per cent. would be a mistake. I say that for two reasons one of which is the capability of the regional boards to cope. It is a cliche that the Arts Council is a remote and central temple of mandarins incapable of understanding small local needs and that local arts authorities —the regional arts associations that we have at the moment —are incapable of understanding anything else and are composed entirely of reactionary community arts people bent upon saw-toothed local drama and little else. Those two cliches foolish though they are, are very widely accepted in my experience. Simply because they have been accepted there is a certain edge of truth. The two animals are different. The central Arts Council and the regional arts associations comprise different kinds of people.

In view of the extent of devolution which is contemplated—even if it is 75 per cent.—the new regional arts boards must be capable of understanding national needs. It is a difficult point to argue. The noble Lord, Lord Rees-Mogg, and others have mentioned the orchestras, particularly our much admired Birmingham orchestra. There are other instances—Opera North, in London the Royal Court, the Whitechapel Art Gallery and Sadler's Wells. All of those are at once local and national. Whichever way one cares to place one's argument one can use those instances. They can be local if one's argument is local and they can be strategic if one's argument is strategic. However, I suggest that with such a degree of devolution any regional arts board must be capable of assessing the wide, general and even national needs of such bodies as well as the purely local needs which it has already experienced. Unless that happens we shall find ourselves with no Arts Council and no substitute for it either. If the regional arts boards are to become merely the Arts Council sliced up neatly and apportioned, wisdom and all, around the country there would be not so much alarm.

Therefore I tend to share the view of the noble Lord, Lord Rees-Mogg, that about 75 per cent. devolution would be about right. I also share the confusion which the noble Lord, Lord Sainsbury, expressed between the Minister's statement and his letter. The statement refers to "some organisations" while the letter refers to "almost all".

I believe that the notion of the 40 or so additional organisations—even if it means the tier system that the Minister said that he had rejected—would represent a good balance, and I believe that he should reconsider. I sense that most noble Lords in this House share that view. Devolution is to be welcomed with all the reservations that we have about freedom and about the remaining clients of the Arts Council.

3 p.m.

Lord Gibson

My Lords, perhaps I may be allowed to say that I think we have made up in quality for what we have lacked in numbers of audience. Almost everyone has spoken of the importance of the arm's length principle and almost everyone, if not everyone, has spoken in favour of the principle of devolution.

Let me begin by saying that I am totally ranged on the side of devolution for every reason, including that which has not perhaps been mentioned; namely, the enormous size to which the Arts Council has grown. I was Chairman of the Arts Council, a post which I left 13 years ago. One cannot handle sensibly and without a frightening bureaucracy the amount which the Arts Council now handles without devolving, so there is no choice in the matter; there must be devolution. The question is one of degree.

When I retired from the Arts Council, I had the privilege of following the late Lord Clark as the president of the South-East Arts Association —one of the regional arts associations—until I retired from that post last year. I watched with great admiration as it grew under its excellent committee. It has a first-class arts administrator whom it recruited from the Arts Council and it does excellent work all over the South East.

It is obvious that, as time passes and as such associations grow and become more qualified to take over the funding in the regions, the Arts Council must devolve more and more of its work to them, as it has done. There is not much disagreement about that.

As has been mentioned by a number of noble Lords, the questions that should be asked are what the Arts Council should retain and why it is necessary for the independence of the council that it should retain direct funding of anything in the regions. Those questions should first be considered from the point of view not of those who fund the arts, but of the artists themselves and those who run the orchestras, theatres, opera companies, picture galleries and so forth in the regions. It is they who produce the arts and it is what works for them that matters most, not what seems tidiest and politically easiest for those who provide the subsidies.

I have no doubt that it will work best if major regional theatres, orchestras and so on retain a direct link with the Arts Council in London. The regional arts boards, as they are to be called, are fine, but the link with a national body able to make comparisons with what is going on all over the country and, through its international links, all over the world, is essential for the major arts companies.

Furthermore, when the Arts Council directly funds a major regional company, it is able to counterbalance through its national position the influence of local politics to which the noble Lord, Lord Birkett, and other noble Lords referred. That inevitably follows the presence on regional boards of local politicians representing local authorities' funds. Local councillors are often on the boards of the regional arts companies, and why not? It does not fill me with Stygian gloom, provided that the Arts Council is there to counterbalance it. One cannot expect to get the money out of local authorities and not have them represented on the boards. I hope that the Minister will accept the Wilding recommendation that, for the reasons given by the noble Lord, Lord Birkett, councillors should not be chairmen. They will certainly be there, but they must be counterbalanced. A national body is best able to achieve that end.

Above all, what is so important to the major arts companies is the direct link with the officers of the national arts council—officers whose standing and experience will hardly be repeatable in each of the 10 boards which it is proposed should take over the Arts Council's responsibilities. So, from the standpoint of those who run the major arts companies in the regions, that direct link is a very important source of support. I know that they themseves believe it to be so. For instance, I know that the chairman of the Arts Council has had many requests from such companies in recent weeks that that direct link be maintained.

Last week I took the chair at an address given by Mr. Palumbo at the Royal Society of Arts on his first year's work as chairman of the Arts Council. It was a very good address. The place was packed. There was an audience overflow downstairs. His address was followed by an hour's questioning, which he handled with great knowledge and skill. But it was Sir Ian Hunter, possibly the most experienced administrator of arts festivals in the country, who stressed at that meeting the important part which he considered the direct participation of the Arts Council to have played in the success of the festivals which he organised.

That is why I feel that the Minister's Statement that the big regional companies are—to quote his words—"essentially a regional resource", though perfectly true, misses the point.

So much for the point of view of the regional arts companies. From the Arts Council's own point of view the direct link is also very important. The Minister claimed that, after these proposed changes, the Arts Council would still be in what he called "the driving seat". That is a much more theoretical than real statement. It is rather like what the noble Lord, Lord Annan, said—what does "the strategic role" mean? It does not mean just dropping pennies into hats —which the noble Lord, Lord Annan, said was how I described the Arts Council's role in my early days—although of course that is part of it. But we have been told that it is the regions' accountability to the Arts Council which will keep the council in the driving seat and that the power to increase or diminish the regional grants will give it the authority that it needs. Authority, yes; but knowledge, no. It will be much too remote from what is going on.

The power to grant money to or withhold it from an organisation which itself then decides how to allocate that money does not lead to a real understanding of the problems of the ultimate recipients, nor to the power to influence the solution of those problems. In practice all that the Arts Council will have, if these proposals are followed, is a power of veto. That is not the best foundation for a constructive relationship.

The role of the Arts Council will be restricted to a broad assessment of the quality of the arts in the regions—an assessment of results without any close contact with the processes that have produced them. I fear also that a region which feels that it has a grievance that it has suffered perhaps in comparison with another region may be tempted to appeal to the Minister. If he agrees to intervene—which I hope that he would not, but some ministers may be tempted to do so—that would put him right in the middle of questions that he ought not to be asked to resolve, because then the arm's length principle would finally have been destroyed. Incidentally—and this has been referred to certainly by one: noble Lord and perhaps by more—I was more than a little dismayed to note in the Statement that, in finally determining what was to be devolved, the Minister would have to be satisfied that the excellence of what was to be devolved would be maintained or enhanced.

Why do we have an Arts Council if that judgment is to be made by the Minister? Why cannot he trust the Arts Council to carry out his plans—it has given him considerable support—without appointing a steering group headed by the no doubt admirable director of the Scottish Arts Council, instead of leaving it to the Arts Council to do? I find that that is a most extraordinary move. I must say that, if I were the chairman or indeed the secretary-general of the Arts Council, and had that imposed upon me, I should not stay. That alone would be sufficient to cause me to walk out. I believe that a most extraordinary misunderstanding of the position must have led to this proposition, whatever the merits or demerits of the remainder of what is proposed.

However, the most important point still remains; namely, that the major arts organisations need the direct link with the Arts Council for the reasons that I have given; and, conversely, the Arts Council needs the direct contact with them. Only a direct funding role can secure that. If the Arts Council does not play that role, its usefulness will be seriously curtailed and it will gradually be found quite easy to dispense with it.

Mr. Wilding, whose report the Minister largely rejected, clearly understood that position very well. He was a thoroughly experienced and intelligent observer. He talked to every conceivable interest before making his recommendations. He devised the three-tier system to which the noble Lord, Lord Donaldson, referred. In my view that would largely have overcome the difficulties. The Minister dismissed that recommendation as confusing and liable to lead to confusion, in particular with regard to the middle tier. It is true that in an ideal world such proposals would not have been necessary and would have been ridiculously confusing. But we do not have an ideal world. Those recommendations recognised the facts as they are and attempted to reconcile them. It is a great pity that Mr. Wilding was not heeded.

However, I understand the Minister's difficulty. I do not think that it is reasonable to blame him, or that it is not his duty to examine and call for a review of the structure of arts funding. That does not mean that he wishes to become involved in what money should go to whom. The structure of the funding is his business.

There is no perfect solution to these problems. In every nationwide organisation, whether in business, in the public service, or in any large-scale administration the same problem always occurs. What is the right relationship between the centre and the periphery? No one is ever quite satisfied with the answers and the search for them is permanent; it goes on forever. If one devolves too much, one eviscerates the centre and there is no common goal. If one over-centralises, bureaucracy prevails and morale at the periphery disappears. It is a difficult problem. I agree that Mr. Wilding's solution left certain unsatisfactory aspects unresolved. But at least he understood the danger of leaving the Arts Council—which is the successful embodiment of the arm's length principle —with too little to do. It is that which makes me fear for the future independence of the council.

I do not believe that the proposals represent some 'sinister intention to breach the arm's length principle. However, I believe that such a breach would in time have that effect unless we can build on three very important words in the Minister's Statement. I beg the Minister to consider this. He said that the Arts Council's direct funding should be restricted to the four national companies, the South Bank, education, touring, one or two other aspects, and "some other organisations". I urge that those three words be built upon to preserve the direct link between the council and the 40 major arts organisations in the regions. There seems to be some agreement, and it was certainly Mr. Wilding's view, that there would be some 40 major arts organisations in the regions. I take it that that is the 75 per cent. figure to which reference has been made, although I have not worked it out. There would then be some chance of retaining effective contact with the arts over the country as a whole and thus of retaining the services of the council's experienced officers—certainly its most valuable asset and one which it may otherwise lose. If that is not done, the Arts Council is in danger of becoming a mere talking shop and, sooner or later, a talking shop about the arts will be dispensed with.

3.14 p.m.

Lord Bonham-Carter

My Lords, I am happy to follow the noble Lord, Lord Gibson, in this interesting and important discussion. He is the third former chairman of the Arts Council to participate in the debate. I wondered in the course of the debate whether any of those three former chairmen of the Arts Council were consulted by the Minister before he made his Statement or before he issued his letter. I find it difficult to believe that he consulted them because, had he done so and had he paid any attention to what they had said, the form of the Statement and of the letter would have been very different.

I join other noble Lords in thanking the noble Lord, Lord Rees-Mogg, for introducing the debate so powerfully and for providing the House with an opportunity to discuss an extremely important matter. In one way or another all noble Lords have referred to the arm's length principle, to which I shall return.

I agree with the emphasis placed by the noble Baroness, Lady Elliot, on the economic benefits gained from the arts by the country as a whole. I also agree with the analysis given by the noble Lord, Lord Sainsbury, of the way in which funding has been delivered to the institutions. I hope that the Minister heard and understood those comments and that he will not tell the House once more that during the next three years funds will be increased by 22 per cent., which is an act of great generosity. Having regard to the inflation from which we are now suffering, it is nothing of the kind. As all noble Lords have said, the most important aspect in dealing with the arts is the funding that they receive.

The issue raised by the noble Lord, Lord Rees-Mogg, is a matter of principle and practice in connection with the arm's length relationship. I have always had doubts about the wisdom of appointing a Minister for the Arts, although I am sure that, the noble Lord, Lord Goodman, would disagree. I believe that there are few topics on which politicians are less qualified to pronounce. It is an area in which their direct intervention is almost always destructive. Of course if you are a Minister for the Arts you feel bound to do something and to say even more.

Hence the importance of the Arts Council. It acts as a kind of buffer between the Minister and the Government —between their words and deeds —and the activity of artists, who need government money but who cannot afford to be directed by them.

The classic quango is the BBC. As the noble Lord, Lord Rees-Mogg, said, unless it is seen to be independent, it loses all its authority. Another classic quango is the Arts Council, which cannot do its job unless it is independent. The independent centre of power—that is to say, independent of government—is an important element in the unwritten constitution of this country. I regret to say it is an element for which this Government have shown little understanding and scant respect. They have made too many political appointments and indulged in too much bullying.

I respect the efforts made by Mr. Luce on behalf of the arts. However, he should not be surprised if his Statement and his letter to Mr. Peter Palumbo are examined with a degree of scepticism. I agree with other noble Lords that the two are not synchronised; there are substantial differences of emphasis between one and the other. At times it appears as though two different voices are speaking, or that it is one voice in very different tones: first, for example, in respect of the relationship between the Office of Arts and Libraries and the Arts Council itself The Office of Arts and Libraries is part of government and part of the Civil Service. While it has responsibility, as I understand it, for proposing that grants be given to its clients —the Arts Council, the Museums and Galleries Commission, the British Film Institute, and so on—it does not have responsibility for seeing how that money is spent. That is a responsibility of the bodies which receive the grants.

In the case of the Arts Council —and this is the point raised by the noble Lord, Lord Gibson —it is for the council to be satisfied that the bodies it grant-aids maintain standards of artistic excellence. That is the situation as it always was but no longer will be if the Minister's letter goes through unchallenged.

In paragraph 4 of the letter he writes in the last sentence: I will need to be satisfied that standards of artistic excellence will be maintained and enhanced in the regions as a result of any changes". That puzzles me as it puzzled the noble Lord, Lord Gibson. That does not seem to me ever to have been the job of the Minister. That has always been the job of the Arts Council. It is a gross violation of the arm's length principle for the Minister to start interfering and taking over a responsibility which has never heretofore been his.

Again, the Minister established a steering committee. In his Statement he said: I am establishing a steering group to be responsible for implementing the changes. This group will report to me. I am pleased to announce the apointment of Mr. Timothy Mason … to manage these reforms". —[Official Report. Commons, 13/3/90; col. 156.] That group is to report not to the Arts Council but to the Minister. Mr. Mason and not the director of the Arts Council is to manage the reforms. In the light of that, it does not seem to me to be surprising that Mr. Rittner felt unable to continue to be director of the Arts Council. His responsibilities had been taken away from him by the Minister and handed over to other people. I do not know whether the chairman of the Arts Council was consulted but I am sure that if former chairmen of the Arts Council who have spoken had been consulted they would have predicted precisely what happened.

Secondly, there is the relationship, which has been touched on on many occasions in this debate, between the Arts Council and the regional boards. The latter are to be responsible for the day-to-day administration but accountable to the Arts Council. That is the federal principle about which we have heard so much. There are to be 10 regional arts boards but only five are to be on the council. That seems to me to be in defiance of any federal constitution of which I have ever heard; namely, that the elements of the federation are not represented on the body which runs the federation. That seems to me to be a constitutional deformity of a gross and unnatural nature.

There are those who say—and I think that the noble Lord, Lord Annan, said this—that there should be no members of the regional boards on the council. That is a possible drastic and rather dictatorial solution. However, if you are to have any boards on the council you should have all of them. Those which are not on the central council will have no hand in policy-making and the excuse that that would increase the council membership from 20 to 25 seems to me to be totally inadequate.

We then come —and this has also been mentioned by many of your Lordships—to the extended responsibilities of the regional boards. That matter is set out in paragraph 5 of the letter. Those responsibilities are extensive. I should have thought —here I speak without personal experience—that inevitably if they are to carry out those responsibilities properly they will require increased numbers of staff. If they have that increase in staff and if the Arts Council's responsibilities are as important as the Minister suggests, the idea that there will be any saving in the overheads of the whole organisation is extremely unlikely. I should expect an increase in staff and increased overheads as a -result of the changes.

We then come to the last question, which is what, in the name of fortune, under this reorganisation will 1 he Arts Council do? The question was asked by the noble Lords, Lord Rees-Mogg, Lord Annan and Lord Gibson. None of them was capable of giving a satisfactory answer. The council's revised responsibilities are set forth in paragraph 2 of the famous letter, which states: A; I have indicated in my statement, the Council should also retain [in addition to its strategic role] its leading responsibility on matters such as broadcasting, education, training, research and international affairs". I know that national strategy is difficult to define. I know that the monitoring of arts boards is relatively easy to understand. But I do not understand the responsibilities which the council is to retain. I thought that touring and international promotion were the responsibility more broadly of the British Council than of the Arts Council. I never knew, though that may be ignorance on my part, that the Arts Council had any responsibility for broadcasting or, if it did, how it would carry it out and in what direction. How it is to do that I cannot tell.

Those are some of the questions which require an answer. The basic anxiety which is shared by many noble Lords and which has been expressed today is that the Minister's response to the Wilding Report, which purports to be about devolution and the dispersal of power, is window dressing and conceals what, in the result, will be a centralisation of power not in the Arts Council, but in Whitehall. By elevating the Arts Council to have responsibility for strategy; by giving it responsibility for the "glamour" companies (which, let us face it, arouse the most envy); and by leaving five out of the 10 regional arts boards off the council, in my view the Arts Council will find itself emasculated, just as the Nature Conservancy Council was emasculated by being split into three in the name of devolution. The Government's power will be less fettered; opposition will be more muted from an emasculated Arts Council.

Those are the anxieties which some of us have tried to express today; those are the anxieties which the Minister must address and that I trust he will be able to allay.

3.28 p.m.

Baroness Birk

My Lords, one of my worst nightmares is that I shall wake up and find myself answering on this side of the House, being the last speaker in an arts debate which up till then has been entirely taken up by the great and the good; with people who have had experience as past chairmen of the Arts Council, ex-Ministers of the Arts and so on. There are practically no Indians here today; it is practically all chiefs who have spoken in the debate, apart from the noble Baroness, Lady Elliot, and myself, if she does not mind being classified in that way.

I should like to start by saying that the devolution proposals are very attractive and I welcome them. On this point I am sorry to differ with the noble Lord, Lord Goodman, whose experience is so great and whose partnership with Jennie Lee in the 1960s was the golden time of the Arts Council. We should perhaps be a little more patient. Listening to this debate I have the feeling that we are not sufficiently taking account of the fact that the Statement was made only five weeks ago. After all, the regional arts boards are not already in operation. There must be time for the new system to shake down. There are obviously many corners which need to be smoothed. Many questions have been put to the Minister and it is clear that a considerable amount of clarification needs to be given.

As regards representation of the regional arts boards on the Arts Council, I believe that unless all the regional chairmen are members of the council, inevitably there will be a feeling that some regions will get a better deal than others. As the Arts Council is to be even more fully in charge of providing finance for the regional arts boards than it has for the associations, the worry must be acknowledged to be genuine. Equally, unless the Arts Council, having lost many of its detailed funding responsibilities, includes all the regional bodies as a basic part of its decision-making process, the opportunities for divide and rule by government —a fear expressed by almost every speaker this afternoon —will be dangerously increased.

I do not share the great fears that have also been expressed about participation of local government and local councillors. This is very important. For example, after the abolition of the GLC it was pointed out time after time and night after night during our debates on the arts component that the local authorities would take on a great many of the responsibilities in this respect. Some did, some did not; some could and some could not. Nevertheless, one cannot try to draw in people and say "We require your help both financial and in encouragement" and at the same time refuse to let them participate, saying "You are too political" or "You do not know enough about the subject".

I have found, as I am sure have other noble Lords who sit on committees outside this House, that politics are not the monopoly of politicians and do not occur only when political matters are dealt with. There are, for example, medical politics and politics on almost any body on which one sits. The same applies to the arts and will apply to the regional arts boards.

Of particular concern is that the gap between the Arts Council and the Government is becoming disturbingly narrow. The Minister said in another place: How one interprets arm's length is a matter for debate. How far it is taken is a matter for argument and discussion". —[Official Report, Commons, 22/2/90; col. 1168.] I share the strong feelings of the noble Lord, Lord Goodman. I agree that this is a matter of great concern. If it were the intention of the Government to create a fully-fledged interventionist ministry of culture in the Continental tradition, which they have never given any indication of wanting to do —and this is not the time to discuss the merits or demerits of that —they should do that properly by bringing forward a White Paper for debate.

These changes are so far-reaching and go so deep that I feel —a feeling that has increased as I listened to the debate—that this matter should be brought before Parliament. It should not be dealt with by way of a Statement and correspondence between the Minister, the Arts Council and other people. At the same time that is what we should be investigating and probably asking for.

The management of the changes is not to be handled by the Secretary General of the Arts Council as one might reasonably expect. The point has been made by practically everyone else. The management is to be by a committee headed by a civil servant which will be responsible to the Office of Arts and Libraries. That lends further credence to the suspicion that the Government are significantly lengthening the arm's length policy and almost getting to the point that if they take it any further the arm will be amputated.

Why is it necessary to bring in an outside manager, Timothy Mason, who has done an extraordinarily good job in Scotland? It is no personal reflection on him. However, why is it necessary for an outside manager to be brought in to dictate the manner of reforms to the Arts Council? Can the Minister say why the Minister for Arts does not believe that the Secretary General of the Arts Council is competent to run the affairs of the council rather than to have them located in the Office of Arts and Libraries? That fact is causing us all a great deal of concern.

In that situation it is very understandable why the present secretary general, Mr. Luke Rittner, had decided to resign. Whatever the strength and weaknesses of the present system there is no possibility of it working without proper funding. We have talked around the subject and a great many wise and sensible things have been said about the future of the regional arts boards. At the end of the day, we return to the question of whether there will be sufficient resources.

We have heard graphic examples from the noble Lord, Lord Sainsbury, of what happens when funds are too small. I have had experience of that in other parts of the arts field including in particular the British Film Institute. At best these bureaucratic arrangements are just a distraction from the real problems facing the arts whether regional or national. Shifting the burden of grant-giving from a large and poverty-stricken institution such as the Arts Council which is also being starved of funds, to a smaller regional arts board which is just as impoverished, will not help the theatres to remain open, the orchestras to give innovative programmes or galleries to acquire new works.

Even more damaging is the unavoidable administrative cost of the upheaval which will transfer resources to the bureaucracy at precisely the moment when they are most needed by the arts companies themselves. The basic issue that worries me is how far any artist, performer or musician will benefit from this structure. If they are to benefit and there are extra resources to make it possible, we should feel happier about the situation.

The money for this restructuring is expected to come from the Arts Council's existing budget. Despite the Government's assertion that the council's budget has been increased significantly, the optimism is illusory as the National Campaign for the Arts has recently pointed out. The increase of 12.5 per cent. for the first year is fine and that is what we all applauded. There will be 5.1 per cent. for the next year and 3.9 per cent. for the years 1990-93. They represent an actual fall in the real level of the grant when set against inflation. I shall not trouble noble Lords with the figures though they are plain to be seen and quite simple.

The Arts Council has already had to find extra money to compensate English National Opera and English National Ballet for the disappearance of their support from Westminster City Council. That is the final chapter in the saga of the abolition of the GLC. I say in parenthesis that whatever the GLC did or did not do—I do not believe that it was perfect —the loss to the arts and to many other areas of our national life since its abolition has been extremely great. The failure of the Government either to accept all the recommendations of the Priestley Report or to tackle the Arts Council's calls for what it needs leaves the arts weakened and renders the change irrelevant. None of this will help the Arts Council to deal with the crippling deficits of the national and regional companies. The housing of the arts will not be improved unless extra funds are made available.

The Wilding Report suggested that local authorities would be able to relieve the regional arts boards of much of the present Arts Association responsibility for community projects. But with the poll tax eating into local government funds and with the capping of local authorities, they have little room for manoeuvre—even those local authorities that would like to do more for the arts. They will not be in a position to expand their services for some time to come. Many have taken on arts officers and some would like to have done so but could not because of lack of funds.

How is this wonderful strategic function to be financed? The Arts Council does not have the money to do its present job. A bureaucratic shuffle will not solve the problem. Without the injection of new investment how can this devolved system achieve anything? In a press release of 10th April the PSI gave figures for 1987 for direct public expenditure on arts and museums. We come at the bottom of the list. It is something of which we should be ashamed. In Britain we spend £9.8 per head, compared with £27.8 in Sweden, £20.5 in the Netherlands, £21.4 in France, £24 in Germany and £17.4 in Canada. Internationally we have a very bad record. It is not for lack of people like ourselves trying to nudge this Government, and indeed all governments, to do something for the arts.

I hope that the Minister will offer some illumination and light when he answers the questions put to him. Is there any possibility that all the chairmen of the regional arts boards will be on the Arts Council? There would then be 10 instead of the seven suggested. That would make an enormous difference because it would also deal with some of the problems raised by the noble Lord, Lord Goodman, and others. If they were there as part of the Arts Council they would have an opportunity to work together instead of feeling remote and having to fight for their own region.

3.44 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh)

My Lords, it is very rare that I am envious of the Minister in another place, but today I think I can truly say that I am envious of the position my right honourable friend was in the other day when he made his Statement. If I might carry the allusion of the noble Baroness, Lady Birk, a little further, I believe I am the third Indian in this debate today in your Lordships' House.

I am grateful to the noble Lord, Lord Rees-Mogg, and to the other noble Lords for their thoughtful contributions to the debate. I am very conscious that the noble Lord and other speakers today are able to bring a great deal of knowledge and personal experience to the subject of the funding of the arts and the role of the Arts Council. I hope nevertheless that I shall be able to give them some reassurance about the particular concerns that have been raised.

Before turning to those concerns in detail, it might be helpful for the House if I were to set out briefly some of the background to the noble Lord's Question. As noble Lords will know, the last decade has seen a major expansion of the arts economy. Increased levels of central and local government support for the arts and greater private affluence have enabled arts organisations to increase their turnover to record levels. The Arts Council of Great Britain and the 12 English regional arts associations, which are responsible for funding some local arts organisations, have played a major role in this expansion. Over a long period a situation has developed, however, whereby in any one region a theatre or gallery might be funded by a regional arts association but a similar organisation a few miles away might be funded directly by the Arts Council. This reflects the haphazard way in which over 30 years or more the regional arts associations have established themselves to met local arts needs without ever being fully integrated into a national system of planning and decision-making.

That is why in December 1988 my right honourable friend the Minister for the Arts set up the first major external review of the role of the Arts Council and the regional arts associations since the council was established in 1946. The review was undertaken by Mr. Richard Wilding, the former head of the Office of Arts and Libraries. In his report Mr. Wilding was asked to pay particular attention to four specific objectives.

First, there was the need for greater accountability by the regional arts associations. Currently some £35 million of the Arts Council's £175 million grant is allocated to the regional arts associations, which are responsible for the development of the arts in their regions. But although the officers of the council and the associations have worked closely together, the associations are not directly accountable to the council for the ways in which they allocate and spend council money within the region and for the value which they get for it.

Secondly, there was the need for a more coherent funding policy. I have already described the way in which both the Arts Council and the associations might both be funding arts organisations in the same area. As a result, local authorities have to deal with both the Arts Council and the regional arts associations, and they may find that the two tiers have different policies and priorities.

Thirdly, there was the need for improved structures for the handling of business. In the past it has proved difficult to combine the effective handling of business with due recognition of the multiplicity of interests which have a legitimate claim to be represented in the decision-making process. Meetings are often attended by large numbers of people, and the pressure of immediate business makes it difficult to see the wood for the trees. The Minister for the Arts acknowledged that some associations were already tackling this problem and he now wanted to consider whether these improvements could be disseminated more wisely.

Fourthly, the Minister for the Arts asked Mr. Wilding to consider the administrative cost of the whole system so that he could be satisfied that the taxpayer was getting the best value for money from the arts funding structure.

After consulting widely all the interested parties, Mr. Wilding submitted his report to the Minister for the Arts in September 1989. Copies of the report, entitled Supporting the Arts, were placed in the Libraries of both Houses. Following receipt of the report, my right honourable friend initiated an intensive period of consultation during which he received over 6,000 written responses. He also held discussions with all the interested parties and met a number of delegations of MPs and regional representatives.

My right honourable friend announced his response to the report in another place on 13th March. In it he accepted the thrust of many of Mr. Wilding's recommendations. In particular, he accepted the need to distinguish more clearly between the complementary but distinct roles of the Arts Council and the regional arts associations. He also accepted that the way to achieve this was by devolving many of the council's grant-giving responsibilities to the associations, which would be strengthened and reconstituted as regional arts boards. In return, the boards would become more accountable to the Arts Council for their spending of central government funding and for their delivery of national policy objectives.

In reaching his decisions, my right honourable friend has stressed that his primary objective has been to establish a system of arts funding which is best for the arts and for the public which is served by those arts organisations. The Government are not in the business of making change for change's sake, nor do they want to undermine the excellent work which the Arts Council has achieved over many years. Like Mr. Wilding, the Minister for the Arts concluded, however, that there was an urgent need for a better integrated system of planning and budgeting which could deliver a coherent policy for the arts and which takes full account of regional as well as national needs.

This is what led the Minister for the Arts to announce a major shift in funding responsibilities from the Arts Council to the regional arts associations. It is his view, which I share, that decisions about the funding of arts organisations can best be taken by the people who are in day-to-day contact with those organisations. In the majority of cases it is the regional arts associations, with their knowledge of local circumstances and their close working relationship with local authorities, which are best equipped to fulfil this role.

Moreover, it is in the regions that many of the most exciting developments have taken place in the arts in recent years. A few years ago the idea of Birmingham as a major artistic centre would have been greeted with hollow laughter. Yet the City of Birmingham Symphony Orchestra has now built for itself an international reputation. Later this year it will be joined by the Sadler's Wells Royal Ballet which will be re-named the Birmingham Royal Ballet when it moves into its new home in the Birmingham Hippodrome. The orchestra itself will be moving into a new concert hall which promises to be one of the finest in the country.

The same story can be repeated in many of our great regional towns and cities. Last month saw the opening of the new West Yorkshire Playhouse which is another addition to the excellent facilities that are already available in Leeds. In Liverpool, Manchester, Bradford, Newcastle and in many other centres we have witnessed in recent years a renaissance of the arts. This has not only been a stimulus for civic pride but also a major force for economic regeneration, as my noble friend Lady Elliot pointed out. Many of these developments have been the result of local authority investment working in partnership with other government agencies and with the private sector. It is these partnerships in the arts that the Government now want to build on with their reforms.

Nothing in these reforms is intended to diminish the role of the Arts Council. On the contary, they will enable the council to develop its key strategic role of determining national arts policy. That role is of crucial importance. First and foremost, the council will remain the national body with sole responsibility for determining the overall direction of arts policy. The framework for that policy will be a national strategy for the arts which the Arts Council has been charged with producing by April 1992. The council will also be responsible for ensuring that the strategy is implemented through a system of forward planning and budgeting and by monitoring its delivery.

In addition to its strategic role, the council will retain and develop a wide range of specific responsibilities which can only sensibly be handled at the national level. It will continue to fund directly the four national companies—the Royal Opera House, the English National Opera, the Royal Shakespeare Company and the Royal National Theatre —as well as the South Bank Centre and some other organisations, still to be determined. It will also retain responsibility for other major policy issues such as touring, innovation, broadcasting, international affairs, research, education and training.

Within the exercise of its responsibility for planning and accountability, the council will also need to satisfy itself in future that standards of excellence in the regions are being maintained. Indeed, devolution will not take place until my right honourable friend the Minister for the Arts is satisfied that there are satisfactory arrangements in place to maintain and enhance standards of excellence.

As I have already described, the regional arts associations will be re-constituted as regional arts boards. They will be reduced from 12 to 10 in number to ensure that they are of sufficient size to take on their enhanced responsibilities. They will continue to be responsible for determining the shape of their decision-making structures provided that local authority representation is not in a majority. The Minister for the Arts has not, however, accepted Mr. Wilding's recommendation that all the boards should in future have an automatic place on the Arts Council because this would risk making the council unwieldy. Instead, regional representation on the Arts Council will also be increased from three to five places.

The Minister for the Arts also announced that the Crafts Council would remain an independent body and would not be merged with the Arts Council. He has, however, asked the two councils to explore ways of co-operating more closely so that there is no duplication of funding at the regional level. He has also defined more clearly the complementary roles of the Arts Council and the British Film Institute in the funding of film and video work.

I should record at this point that the announcement by the Minister for the Arts received strong support from all sides in another place. I know that the noble Lord, Lord Annan, made reference to that point, and I shall return to it at a later stage. It has also received the personal support of the chairman of the Arts Council and has been endorsed by the lull council at a specially convened meeting. It has been welcomed by the regional arts associations.

Nevertheless, the Minister for the Arts has recognised that, following his announcement, there are concerns on the part of some of those who are directly affected by the changes. To some extent this is inevitable. It is not possible to implement a set of proposals as complex and wide-ranging as the ones I have described without creating some uncertainty. This was one of the reasons why the Minister announced the appointment of Mr. Timothy Mason, the director of the Scottish Arts Council, who commands wide respect in the arts world, to manage the changes resulting from his announcement. It will be Mr. Mason's job to advise the Minister for the Arts on the detailed implementation of his decisions, having taken account of the concerns raised by interested parties whom he will consult. He will be working with a small steering group that has been set up by the Minister.

My right honourable friend intends that the Arts Council will remain a strong and robust organisation as a result of these changes. I hope and believe that the noble Lord's fears on this score are misplaced. The council's overall responsibility for arts policy and funding will be enhanced.

The noble Lord is also concerned that the arm's length principle of arts funding, and with it the independence of the council, is being eroded. Nothing in the changes that the Government have announced will compromise the council's independence. Decisions about the allocation of the council's grant-in-aid, about artistic priorities and about the funding of individual arts bodies will continue to be the sole responsibility of the council and regional arts boards. The structure of arts funding and the mechanism for ensuring the accountability of taxpayers' money are, however, properly a matter for the Government and the Arts Minister, who must demonstrate that accountability to Parliament.

Concern has also been expressed that these changes will threaten the standards of excellence being achieved by leading arts organisations when they are no longer funded directly by the Arts Council. Excellence is not of course the sole preserve of the Arts Council. Nevertheless, the Minister recognised that it was important to ensure that the position of these organisations would be protected in any new arrangement. As I made clear earlier, he will therefore want to be satisfied that standards of excellence will be maintained and enhanced before devolution of funding responsibilities can take place. In particular, where the Arts Council has agreed a level of three-year funding with an arts organisation this will be maintained by the regional arts board.

Beyond that, the new planning and monitoring arrangements will require the Arts Council to approve in advance the funding of major organisations. Each autumn the council will indicate its provisional grant allocation to each regional arts board. The board will then assemble a detailed programme for the coming year which will include its allocation to major arts bodies. The programme will need to be submitted to the Arts Council for its approval and the board will be subsequently held to account by the council for the delivery of that programme. To enable it to maintain its knowledge of regional organisations, the Arts Council will also retain its responsibility for undertaking in-depth assessments of leading arts organisations and their funding bodies.

Various points have been raised and I shall try to answer some of them. Other points will only be answered as the working party proceeds in the months ahead. The noble Lord, Lord Rees-Mogg, mentioned the increasing costs and bureaucracy that devolution could bring about. That point was in turn returned across the net, so to speak, by the noble Lord, Lord Jenkins, who referred not only to devolution but to dissolution. Whatever the outcome, he made the very respectable point that when the British Empire came to an end the question of whether the system that succeeded it was more efficient was offset by the de facto coming of that end.

The noble Lord, Lord Annan, questioned the meaning of "strategic role". The Arts Council has been charged with producing a national strategy for the arts and holding the regions to account in delivering it. If they do not deliver it the Arts Council will ensure that they do not receive any money. That is what we mean by the Arts Council having a strategic role.

It was, as always, a privilege to hear the noble Lord, Lord Goodman, speak in your Lordships' House this afternoon. He raised the point that there are activities that the Arts Council engages in of which the Minister may not be aware. I had the privilege many years ago of discovering some of the good work that the noble Lord was doing when I led a small delegation to the Treasury. I thought that there was a unique and unshakeable case for special treatment for a group of individuals who had a very short life-span and career—namely, racing drivers. It was pointed out to me by an official that the Arts Council had been making the case for years in the case of authors. Therefore I am aware of what was written on the back of the envelope which the noble Lord, Lord Goodman, brought with him this afternoon.

Regarding the broader aspects of the important items which he mentioned, which if I recollect correctly included copyright, we believe that if the Arts Council is freed from having to deal with hundreds of small regional organisations it will have more time to attend to important issues which are not commonly brought to the attention of the public.

The noble Lord, Lord Jenkins, and many other noble Lords, referred to the beginning of the end. In his case the noble Lord referred to the finger being taken out of the pie. That is far from the case. The Government have increased expenditure substantially in recent years and are totally committed to the Arts Council and its successful future.

The noble Lord, Lord Rees-Mogg, raised three principal points which he wanted answered if he was to be convinced that the Government were dealing with the case with sincerity. The first of those points was that arts organisations should be consulted before being devolved. I hope that I have made it very clear from my reference to the steering group that that will certainly be the case.

The noble Lord then referred to the need for the Arts Council to remain a strong organisation. The Arts Council will continue to be responsible for arts policy nationally, as I pointed out earlier. I believe that it will be unfettered by a number of small issues. That will allow it to concentrate on the larger issues and to have more time effectively to lobby the Government of the day on behalf of the arts.

Thirdly, the noble Lord wanted an assurance that the Arts Council would remain independent. As I said earlier, the Arts Council will continue to be responsible for decisions about art. The Government have no desire to be in any way involved. They have an interest only in answering to Parliament for expenditure undertaken on behalf of the taxpayer.

Arts expenditure has been referred to. The subject was not dealt with in great detail, although it could form the subject of a separate debate in your Lordships' House. However, I should point out that in the lifetime of this Government expenditure on the arts has risen in real terms by some 40 per cent.

The noble Lord, Lord Birkett, raised a very valid point with regard to the intentions of the steering committee. He described the position perfectly when he said that the committee would deal with the nuts and bolts of the devolution changes as they took place. That is correct. I should add that that committee consists of five people, of whom three are from the Arts Council itself. That ensures that the Arts Council will have a majority on the steering committee.

The matter of local councillors was raised. In some ways I was rather surprised because I am often accused at the Dispatch Box of not having the needs of local councillors to the forefront of my heart and desire. We have insisted that local councillors will not have a majority on any board, but it should be recognised that many local authorities give a considerable amount of money to the arts. It would not be practical to say that local councillors could not be represented on the boards, although I know that that will not satisfy the noble Lord, Lord Annan.

Baroness Birk

My Lords, given the way that the Minister looked at me when speaking about local councillors, I thought that he had perhaps misunderstood me. I was arguing that local councillors should be involved. For those few minutes I was on his side.

Lord Hesketh

My Lords, I agreed with the noble Baroness. I am sure that, when she inspects Hansard, she will find that I was in agreement with her on that occasion.

The noble Lord, Lord Annan, and the noble Baroness, Lady Birk, referred to appointments to the regional boards. Again, we were divided on that issue. I have to say—I am often assaulted in this respect when speaking at the Dispatch Box for the other department which I represent —that one of the Government's principles is a commitment to local democracy. One of the ways in which we shall achieve that is through having local councillors on regional arts boards.

The noble Lord, Lord Bonham-Carter, drew attention to what he believed was the compromise of the arm's length position. The key point to remember is that the Government hold a responsibility for the structure of the arts in terms of funding. There must be some connection between the Government and the arts because the Arts Council itself was a government creation, but we do not have any intention of involving ourselves in the arts.

The noble Lord, Lord Gibson, raised the reasonable point of why we need a steering group. The Wilding Report makes some 80 detailed recommendations. The Minister felt that he could not prescribe all the answers without further consideration and advice and he has therefore set up that steering group which has a majority of Arts Council members. I hope that that satisfies the noble Lord up to a point.

The noble Lord then drew our attention to three crucial words—"some other organisations". One of the reasons for setting up the steering group was to consider that matter. It is too early to say whether there will be 40 organisations, as he believes is correct, but those words are there and the noble Lord is quite right: there will be other organisations.

The most important point about this afternoon's debate was that first raised by the noble Lord, Lord Donaldson of Kingsbridge, and by many other noble Lords later. The noble Lord, Lord Annan, pointed out that the Statement received a welcome response in the House of Commons for reasons which he felt were obvious. He felt that there was a different interest for elected Members of Parliament than for Members in this House who have shown their interest in and experience of such matters this afternoon. I had frequent discussions with my right honourable friend in the days preceding this debate. I can assure noble Lords that he will read the entire debate with great interest because a great deal which is of interest has been said this afternoon. I hope that in the limited time available to me this afternoon I have been able to give some reassurance that the concerns raised by noble Lords are being taken on board by the Government.

We are concerned that the artistic features of this country should be the best. I have to say to the noble Baroness, Lady Birk, that if I were given a choice of going to Sweden, Canada or the United Kingdom for the benefit of a creative week, I should choose the United Kingdom every time with regard to the arts.

We believe that the Arts Council will not only survive but will thrive. It is the Government's firm view that the council is set fair to meet the challenges that lie before it in the 1990s.

Lord Annan

My Lords, perhaps before the noble Lord sits down I could make clear my point about local councillors. Of course local councillors should be on these bodies. It was simply the enthusiasm of his right honourable friend who said, "I should like far more, though they must not go over 49 per cent." that I thought was perhaps a little questionable.

House adjourned at ten minutes past four o'clock.