LA funding survey: Commercial mindset increasingly important

Arts organisations need to be increasingly aware of commerical opportunities to make up lost income as a result of council cuts, respondents to Arts Professional's latest Pulse survey have said.

With 54% of respondents saying their local authority had cut direct funding to arts and culture, and 15.3% saying their council was planning to make cuts, the survey findings highlight a range of measures arts organisations are taking to cover the shortfall.

After applying for funding from trusts and foundations, which has resulted in concerns they are becoming overwhelmed, the second and third most popular measures taken by organisations in the face of cuts were "new strategies to earn income from arts or cultural activities", and "new strategies to earn income from commercial operations".

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Meanwhile, 72% of respondents agreed with the statement that arts organisations "should be more commercially savvy" compared with just 10.7% who said they "should not be run commercially".

One respondent said that while they believe funding cuts are "inevitable", the creative sector will "always find innovative and collaborative ways to continue delivering cultural services which are essential to economic growth and community wellbeing".

Another said: "Merging the operational costs of venues in close proximity to each other without actually physically merging - [such as] technical support, HR & Legal, Box office, and marketing - would help."

Another respondent said too many arts organisations "rely on funding and not operating a commercial model". 

"[They] need to develop other models of income raising," the respondent said.

"Maybe they need to come together more to reduce costs. Do they need [their] spaces/buildings? Can they share resources such as HR [or] finance [with other organisations]. They aren't smart in how they work. 

"[It is] sometimes cheaper to employ people on fixed term contracts and stop employing freelancers long term."

Outdated business models

It was also suggested that arts organisations "exist based on business models from the past".

One respondent said this was especially the case if their buildings were created by Arts Council England's Housing the Arts programme, which was introduced in 1965 and ran into the 1980s, or with National Lottery funding. 

"The scale of cuts today is existential for those reliant on those previous models, with huge overheads needing subsidy, before marginal cost programming is possible."

Meanwhile, nearly half of survey respondents agreed that local authority cuts have resulted in arts organisations taking fewer artistic risks.

Speaking this week, Shadow Culture Secretary Thangam Debbonaire said, should Labour win the next general election, she wants to explore the widest possible range of finance for the creative industries.

"This includes creating a private finance model to attract funding from different sources. It includes reviewing the whole range of tax incentives," she said.

"Every single opportunity there is to get more finance into the creative industries, whether that be private finance, philanthropy, new partnership models, state investment, the lottery, every single one should be taken."