Arts Council (Grants) (Hansard, 19 February 1981)

§ Mr. Channon

[pursuant to his reply, 17 February 1981, c.31.]: I attach my letter of 10 February to the chairman of the Arts Council and the reply of 13 February.

FROM THE MINISTER FOR THE ARTS

Rt Hon. Kenneth Robinson

Chairman

Arts Council of Great Britain

105 Piccadilly

LONDON

W1 10 February 1981

You will have seen the exchanges in the House of Commons on 2 February on the decisions taken by the Arts Council in respect of its 1981/82 grant. We have already had a talk about this but 1 am writing to put my views on record.

The distribution of the Arts Council's grant for 1981/82 was of course settled before I assumed office. In no way would I wish to intervene in the individual decisions made by the Arts Council within the total sum available nor the strategy which lay behind them. I am however a little concerned—and this concern was reflected in the views of Members on both sides of the House—about the precipitate way in which the cuts appeared to be announced, in some cases to bodies which had evidently not clearly understood that withdrawal of Arts Council support was a possibility. Although I am aware of the circumstances, it was unfortunate that in a few cases in London the notice of withdrawal of grant reached the body in question after it had first heard the news through the media.

As I indicated. I attach considerable importance to telling bodies well beforehand when the Arts Council is dissatisfied with the quality of their work to an extent which could bring into question the continuation of grant. In these circumstances I hope that in future it may be possible to ensure that they can have the maximum time to adjust and seek extra help from other sources. I am also somewhat concerned at the suggestion which has got about that the reason for the Council's action was financial, arising from the level of the grant. Your strategy, with which I certainly do not want to disagree, was partly based on other, primarily artistic, considerations, and I would welcome any move which helped to make that clear.

PAUL CHANNON

Dear Minister,

Thank you for your letter of 9 February conveying views expressed in the House about the Council's announcement of grants for 1981/82.

Perhaps I can begin by referring to your last paragraph. As you know, I advised your predecessor in August that the revenue bids from the Council's clients for 1981/82 in aggregate exceeded £90 175W million. Our revenue bid to the Government for the lower figure of £84 million represented a proper appraisal of our clients' due needs after discounting what we had to recognise as their more unrealistic aspirations. The final revenue grant figure of £77½ million announced in December was substantially more than might have been expected given the current state of the economy and its consequences for public expenditure levels generally. At the time of the grant announcement, we warmly welcomed this response to the needs of the arts.

Nevertheless, the increase in grant for the coming year remains slightly below the Government's own forecast of inflation over the period, and is appreciably below our original bid. There is no doubt that to have distributed the final sum on anything like a pro rata basis to all existing clients would have been insufficient to prevent the collapse of some companies, including some of the very best and some which are making the most vital contributions to the arts in the regions. Apart from the level of Council subsidy, the general economic situation is making it more difficult for companies to increase box office receipts; the constraints on local authorities are affecting their contributions to the arts; and some of the costs which our clients have to bear (such as travel and accommodation costs for touring companies) have been rising far more steeply than the general rate of inflation.

In the case of some of the clients whose grants we are not renewing in 1981/82, our decision was based solely on dissatisfaction over a period with the quality of their work. Their subsidy would have been at risk whatever the level of the Council's grant-in-aid. But I have to say that, for the reasons I have already indicated, many of our decisions were indeed closely related to the level of grant. A principal objective of the exercise was to provide necessary margins of safety for those clients whose survival we saw as of paramount importance.

Turning to what you refer to as "the precipitate way in which the cuts appeared to be announced", we were naturally concerned not to delay our announcements any longer than was absolutely necessary after the Government's own announcement of our grant-in-aid. Of course we had given the matter a great deal of thought before 9 December. For some months beforehand, the Council itself, its Finance and Policy Committee, its specialist Panels and Committees of advisers and its staff had all been reviewing clients in their respective fields with considerable care, bringing to bear in the process all the wealth of knowledge, expertise and factual information accumulated over many years from so many sources. Your letter perhaps implies a suggestion that it would have been preferable for the Council to let clients know from the outset that they were under that kind of scrutiny. The difficulty is that, until the actual grant announcement, we could not come to any firm conclusions about the number of clients for whom it would not be possible to renew grant. We had necessarily begun by making more pessimistic assumptions about the level of our grant. Had those assumptions been realised in the event, the list would have had to include far more than 41 clients, perhaps more than twice as many. If we had told all those clients that there was a possibility that their grants would not be renewed, we would have caused a great deal of needless anxiety and distress. Indeed in some cases, the news could have undermined their financial positions even in the current year and precipitated their collapse under pressure from their banks and other creditors. In our view this would not have been preferable to the course we decided to adopt.

I agree that the Council has a standing obligation to tell any client when it is dissatisfied with its work, and indeed where its future grant may be at risk for whatever reason. There may have been cases in which this policy has not been adequately implemented in the past, and we shall ensure that this does not recur. But I doubt whether such a warning will necessarily soften the blow of a subsequent decision not to renew grant. Perhaps I can give you just two examples from recent history. In the case of one of the 41 clients, we have consistently and repeatedly expressed over recent years our grave concern about crucial aspects of the company's affairs; and yet the company's administrator expressed total astonishment when the Council decided not to renew grant. The case of the National Youth Theatre, where the Council decided not to renew grant for either the amateur or the professional sides of the company's work, provides another illustration. Only this week, the company's Director has made clear in a letter to The Times that he has always known that the Council's grant to the amateur wing was inconsistent with our general policies and priorities. As to the 176W professional side of the company, an important factor in our decision not to renew grant was the fact that its work attracted very poor audiences as evidenced by weekly figures supplied to us by the company itself. Yet here too the company's Director has referred to the Council's decision as "a bolt from the blue" It is perhaps only natural for any client, however clearly he knows the facts and understands our position, to suppose that in the event any blow will always fall elsewhere.

We fully share your distress that, in a few cases in London, clients whose grants were not to be renewed first heard the news through the media, despite our best efforts with the Post Office to avoid just this. In the light of experience, we will try to ensure that it does not recur should it be necessary to announce similar decisions at the same time next year.

Should you wish to publish this correspondence I have of course no objection.

Yours sincerely

Kenneth Robinson

Chairman