ROYAL OPERA HOUSE AND ROYAL SHAKESPEARE COMPANY (Hansard, 20 December 1983)

The Earl of Gowrie

The Government broadly accept the findings and conclusions of the scrutiny, and have decided, subject to parliamentary approval of the Supply Estimates, to include, within the total grant of £ 100 million to the Arts Council for 1984–85, an additional sum of £4.1 million, over the allocation which would otherwise have been made. This sum comprises an additional £2.8 million for the Royal Opera House and Royal Shakespeare Company, and an additional £1.3 million for four other opera companies: English National Opera, Scottish Opera, Welsh National Opera and Opera North. A corresponding addition will be made to the total arts and libraries programme for 1984–85 as announced in the Chancellor of the Exchequer's Autumn Statement, to be met from the contingency reserve. Provision will also be made for subsequent years.

The additional sums for the ROH and RSC are intended to establish the following new total provision for them, in line with the Priestley recommendations:

ROH	£12.350million
RSC	£4.900million

The special provision of£1.3 million for the four other opera companies is also intended to strengthen their financial base, in recognition of the particular difficulties which they have experienced; allocation of this sum will be a matter for the Arts Council of Great Britain.

In addition, parliamentary approval will be sought for a supplementary estimate in the current financial year, 1983–84, to increase the revised cash limit on Class X Vote 21 by £3.5 million from £108.3 million to £111.8 million. This additional money will be allocated to the Arts Council, to enable the accumulated deficits of all the companies mentioned (including that on the Scottish Opera's theatre in Glasgow) to be written off. The increase will be charged to the contingency reserve and will not therefore add to the public expenditure planning total.

I believe that these increases, together with the writing-off of accumulated deficits, will enable the companies concerned to operate on a satisfactory financial basis in future. I have asked the Arts Council to emphasise to the companies that the higher level of operating activity allowed by the new figures must be regarded as a level which they do not exceed; and to ensure that financial management is strengthened on the lines recommended in the Priestley report, that close cost controls operate in future, that budget ceilings for all activities are set and held, and that the possible savings identified by the report are pursued. Given these measures I believe we have now reached a satisfactory level of operating subsidy for the companies in question.