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How to save money and save the arts

On Radio 4′s Front Row tonight, I was asked for ways to save money in the UK arts, which are facing a cross-board five percent cut. Boldness is called for.

Here are my remedies:

1 Abolish Arts Council England

Why? Much of its work is overseen and duplicated by the Culture Department.

Saving: c£10 million p.a.

How? Ensembles receiving £1m+ in subsidy to be funded direct by DCMS. Increases to be inflation linked, to avoid excessive intervention. The rest to be devolved to regional councils, the funding ring-fenced for the purposes recommended by the same (unpaid) experts who presently advise the ACE.

Benefits: Less bureaucracy, more attention to grass roots.

2 Privatise the South Bank.

Why? There is no need for it.

Saving: £20m p.a., plus £120m in planned renovations.

How? Put the site out to tender. There will be no shortage of promoters who will want it.

Benefits: Huge savings, better programmes, same diversity, greater flexibility.

southbank

 

3 Over 8-10 years, privatise the Royal Opera House

Why? The ROH already earns more in private subsidy than in public. Its average seat price is beyond the average citizen. Cut it loose, over time.

Saving: up to £25m p.a

Benefits: Huge savings, better programmes, same diversity, greater flexibility.

 

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Comments

  1. James Brinton says:

    Excellent. But be prepared for charges of heresy and willful breaking of rice bowls.

  2. Just get rid of the monarchy, tax the rich and you got money to spend on the arts. Problem solved.

  3. I see the wisdom in #1 and #2 but #3 will simply mean a swift end to the opera company. I agree that the government shouldn’t be providing such a large proportion of its budget, but it takes a long time to replace funding like that, so unless you know a dowager empress or two who have 20-30m pounds to donate every year until the company figures out a proper business model, be ready to say goodbye.

    • Iain Muir says:

      “but #3 will simply mean a swift end to the opera company”

      Not necessarily, it would probably just mean an end to the cheaper seats. The most expensive seats currently subsidise the cheapest ones. Whether the ROH would feel the need to continue this without the pressure of public funding is debatable. No doubt privatisation of the ROH would be followed by calls for further privatisation, since the perception that opera is “not for us” would have been reinforced. The “savings” would disappear into the ether, but the impact on the UK’s £1trillion national debt would be negligible.

      I’m sure there is a larger potential audience for opera in the UK. Interest in Classic FM and Katherine Jenkins suggests to me that people are looking for something beyond the usual diet of pop, even if they’re not quite getting there. Privatisation of not one, but two national companies, would be an admission of defeat.

      No mention of the fact that the ENO is saddled with a huge theatre, five minutes from the ROH.

      No evidence is provided for “Benefits: Huge savings, better programmes, same diversity, greater flexibility” and I’m sure “average seat price is beyond the average citizen” was drafted on the back of an envelope. Poor stuff.

      I’m sure NL could still afford the tickets. Screw those who couldn’t.

      • Wrong, wrong and wrong again. Tickets at US opera houses, where there is no subsidy, are generally far cheaper than at Covent Garden. Privatisation will allow the company to maintain a uota of cheap tickets, while raising the top prices as high as they can go, without political outcry.

        • Is it really a fair comparison to bring in US Opera houses to this argument. As I understand it, their funding and business model is entirely different from the UK mixed funding strategy and is typically heavily reliant on philanthropy and corporate sponsorship to enable cheaper tickets. A larger number of (often very expensive) subscription ticket sales means US Opera Houses know their audience figures in advance and thus what they can afford charge for single seats.
          I’d imagine a similar situation in US concert halls too.

          A further reduction in public subsidy coupled with an increase in private funding could be a safer solution?

        • Iain Muir says:

          Without the detailed analysis that you haven’t provided, this is pure conjecture.

          The Met, for instance, has economies of scale with 3,800 seats in a country with a different culture and attitude to funding. You’ve never seemed particularly impressed with it in any case.

          How much higher can ROH prices go? Do you actually know?

          You say “Wrong, wrong and wrong again” but provide no links or evidence of any research whatsoever.

          • Nor did you. Your assertion that cheap seats ill be scrapped is unfounded supposition. I will provide more evidence to the appropriate parliamentary committee, when privatisation becomes realistic.

          • Iain Muir says:

            NL: “Nor did you.”

            I’m a private individual, in a career totally unconnected with the arts. You are not.

            You’ve proposed drastic changes with little or no supporting evidence or argument.

        • The tickets at the Met are considerably more expensive than at the ROH. I provide numbers and documentation below.

          The tickets for the current production of Simon Boccanegra, for example, range from 31 to 150 pounds. (That’s $49 to $229.) That would put the average price somewhere around $139, though probably less since there are probably more seats on the cheaper side of the range. For the ticket prices see:

          http://www.roh.org.uk/productions/simon-boccanegra-by-elijah-moshinsky

          The average price for a ticket at the Met was lowered this year to $156 (previously it was $174.) Orchestra level seats average about $350. So average prices seem to be about $25 more at the Met. And the best seats are about 30% more expensive. For the numbers see:

          http://www.nytimes.com/2013/02/27/arts/music/metropolitan-opera-to-reduce-ticket-prices-next-season.html?_r=0

          But the whole story is far worse. The Met sales subscriptions of 6 tickets first which average over $900 per person and over $2000 for the best seats. In addition, donors are also given priority seating. It takes a donation of several thousand dollars to qualify. By the time these priority services are completed most of the good seats are gone. The cheap seats in a 3800 seat house are not so great unless one likes to watch theater through binoculars, but that is all an average person has access to.

          The average price for an opera ticket in Germany is somewhere around 30 Euros – about $40. That’s about one quarter the average at the Met, and one third the ROH average.

          I’m so sorry to see Britain’s admirable social democracy being dismantled.

        • Raising top ticket prices “as high as they can go” assumes they can go much higher than they are now. Which assumes Broadway musical-level demand, and I just don’t know if that exists for the opera. The Met has experienced a near-disastrous drop in ticket sales recently, in part because they changed the pricing in the house (and also because they are cannibalizing some of their audience with the cinema thing). Given the market for opera tickets, I don’t think a private operator of the ROH would be able to charge much more than the current management would feel comfortable charging from a political point of view. So as I see it, that’s a wash.

      • If they depended only on audiences who can afford the most expensive seats, they will be playing to houses of 500-600 people every night and there will be little increase in net income.

  4. Hasbeen says:

    What evidence is there that private subsidy leads to greater diversity in programming?

  5. A thought regarding privatizing the ROH. If the UK follows the American model of private patronage for the arts, opera will all but disappear from the UK. The USA only has 3 cities in the top 100 for opera performances per year.

    • You and your weird “top opera performances” statistics!

      Some cities simply do not have demand for tons of opera. If the huge government subsidy were taken away and there was no market for opera, then that opera company needs to figure things out.

      Also, while the US may only have “3 cities in the top 100 for opera performances,” it has PLENTY of cities with opera houses that present perhaps 3 to 5 productions a year, which meets the appetite of their communities just fine.

      • Our opera “houses” are cultural country clubs for the wealthy. 3 to 5 productions a year indeed meets their needs. We do not have the forms of education and arts support that would allow opera to reach a wider audience and thus require more performances. In our system of arts funding, the wealthy service themselves and say to hell with everyone else.

  6. anonymous viola player says:

    The next few years are going to be particulalrly difficult for clients of the Arts Council. The orchestras have been told to expect to drop down the pecking order in order to protect funding to key organisations: the opera companies, the National Theatre and (wait for it) the South Bank Centre. This last fact fills this correspondent with despair. Why should the taxpayer be funding this organisation at all, let alone at this level?

    The SBC does not promote the concert seasons of the resident orchestras: it merely skims off commission on the concerts, whilst charging rent for the use of the centre. The orchestras take the risks and the SBC takes as much of the credit as it can, it seems to me.

    Furthermore the SBC, since the recent revamp, now makes a considerable income from all the retail outlets and restaurants on the site. And still they want more, so that they can repeat their success with the Queen Elizabeth Hall site.

    I simply do not understand why taxpayers up and down the land have to support an arts centre in London. The SBC is in a unique position as a centrally-funded venue. Why? And why should they continue to be funded at this ridiculous level whilst avoiding the cuts that we understand are coming over the next few years?

  7. Bang on, Norman: in every sense. ACE has favourites towards which it is disproportionately helpful, with others as deserving or more so falling by the wayside.

    When it comes to funding the biggest operations, much of the money seems to end up diverted into funding bloated administrations and football-player fees to an elite of a smallish circuit of favoured conductors and soloists. I believe the founding fathers of the Arts Council never intended taxpayers’ funds to be paying out five-figure fees to conductors and soloists on a daily basis, nor supporting armies of office staff. This funding ends up distorting the market against those who run truly cost-efficient operations. If some of the opera houses, orchestras and concert-halls want to continue with their budgeting in that way, that is fine by me but let them do it with sponsors’ cash not that of taxpayers.

    If we are going to go down this alternative road, then we need the government to take another look at tax strategies for sponsors and donors to make the numbers work more effectively. Few sponsors and donors enjoy seeing a high proportion of their donations going to the taxman.

  8. Definitely abolish the top tier of ACE supervision of our national companies. They are far better run now than ACE ever was during its entire history. But allow those companies to keep the 20% VAT they charge on tickets and dutifully return to the Treasury where it is merely churned by yet another crew of numerate misfits and the odd special advisor. This would be a more secure and honest subsidy than they currently receive.

    • Iain Muir says:

      Good points. The whole issue of zero v standard rating makes little sense. Why, for instance, should glossy magazines be zero rated?

  9. Jonathan says:

    I entirely agree concerning the need for change but am less convinced about the mechanisms you propose. ACE is clearly a problem but one which needs extremely careful handling: you mention regional councils but I would regard these as entirely untrustworthy, history suggests that they will (a) fail to use funds any more efficiently than ACE and (b) at the first chance they will divert money elsewhere. In the end ring fences are always open to demolition and it will surely come. Demolishing ACE in favour of direct DCMS activity is risky too, having seen the consequences of undue political interference in other countries I think there is a lot to be said for the “arms-length” principle.

    Similarly, privatising venues (as with anything else in terms of public service) has become a Great British Tradition but I have yet to see any evidence whatsoever that anyone (apart from the shareholders) benefits. My suspicion is that the result in the case of SBC would be still higher costs to promoters and finally less choice – and in any case, certainly not better programmes. It would be nice to see at least the RFH sold off, though, if the funds could be used to to provide a concert hall of the level London needs.

    The opera house is also a difficult question because I would like to see a house like Covent Garden providing an accessible service and subsidy is needed to achieve this. The situation there, though, does lead us to the real elephant in the room: here as in so many other places – and not just in the UK – rather than pursuing a different agenda from the rapacious bankers (amongst others), the arts have taken exactly the same route: continually allowing those with high positions to take more and more of the cake. The bankers took the rap but everyone was at it and mostly they still are. I cannot shake off the idea that it is simply ludicrous that the CEO of a subsidized opera house is paid far more than the Prime Minister and that the Music Director apparently receives a sum which puts him within the top 0.1% of UK earners. I am all in favour of musicians being well-paid but this is simply absurd; until the arts pursue an agenda of genuine community service rather than continuing support for the principle of inflated earnings for the few whilst the majority toil for pennies, there is little feasible argument for subsidy of any kind.

    From what I can see, the UK public is sick to death with being taken for a ride by people abusing their power and privilege in pursuit of personal empire and profit. If the arts start to lead positive social change rather than following the negative leads we can so easily observe in other spheres of enterprise, then subsidy might become more obviously justifiable and support therefore might become more widespread.

  10. The Vienna State Opera has a yearly budget of about 100 million Euros (128 million dollars.) See:

    http://en.wikipedia.org/wiki/Vienna_State_Opera

    That’s the norm for major opera houses in Europe.

    The projected budget for the Washington National Opera in 2012 was 22 million, about 1/6th that of the Vienna State Opera. See:

    http://www.washingtonpost.com/wp-dyn/content/article/2011/01/20/AR2011012001924.html

    The 2010-11 budget of the Seattle Opera was $23 million. Like the WNO, its budget is about 1/6th that of major European opera houses. See:

    http://seattletimes.com/html/thearts/2015863861_opera10.html

    The Met’s budget is 300 million per year for a seven month season. That’s about twice the average for major European houses, all of which have 11 month seasons. The Met uses the most expensive stars and lavish sets. The Met’s wealthy donors service themselves luxuriously while neglecting the rest of the country.

    Much of the opera in the USA is performed with pickup musicians in often poorly suited rental facilities. The sets and costumes are often created with bare-bones budgets. These productions often compare poorly to those in Europe where fulltime musicians work year-round in dedicated houses backed with large, well-staffed production facilities.

    The UK could expect developments like these if it privatizes the arts, and especially opera. Reform of its public funding system might be better than elimination.

  11. In general the idea that privatization has the effect of lowering prices is of course very dubious, and no serious economist holds it, at least not without qualification. There are many examples where privatization has had the effect of dramatically increasing prices (for instance, in France gaz and electricity were privatized pursuant to European regulations, and prices have never been higher).

    So I totally agree with Mr Osborne.

    Thatcher was wrong about economy in general; thatcherism gets even wronger when the economy of culture is targeted.

    • Kenneth Griffin says:

      It’s likely that current schemes such as the RSC Stratford £5 tickets for 16 – 25 year olds, supported by BP, and the Donmar Warehouse £10 front row seats, supported by Barclays, would continue after privatisation. Companies like BP and Barclays see this support as a way of sweetening their public image, which is otherise toxic.

      • Timon Wapenaar says:

        So if these companies ever clean up their act, there’s no reason to spend money on the arts?

  12. Isn’t the Arts Council an example of a completely useless institution that is nevertheless essential to our national life, like the royal family? Just as the royals save us from the horror of a president Blair or Thatcher, so the Arts Council protects us from state control of the arts, by simply sponsoring any old crap that ticks the right boxes.

  13. I think I’m right in saying that moving to the US model would involve transferring the entire benefit of tax relief on donations to the donor.

    Since donors are generally quite wealthy, but perceived as being very wealthy, I’m not sure how a UK government would sell that idea to the tabloids. Just a subsidy by the back door?

  14. The idea that cutting support for the arts will somehow “save” it is ludicrous. Or that it will result in a lowering of ticket prices is counter-intuitive. All the bean counters in the world will not help the arts flourish, they will merely screw things up more than they already are.

    The management and execution of opera is a very expensive proposition, and a bunch of know-it-alls is not what is needed, but rather a careful top to bottom analysis that includes the identification of specific funding sources before the financial guillotine is further employed.

  15. Emil Archambault says:

    I’d beg to differ from your assertion that “private” opera houses have more diversified programming. If the intention is to make money, experiments like the Minotaur and Written on Skin (both at very cheap ticket prices) do not go down well. Rather, I’d expect an increased reliance on warhorses like Tosca, Bohème, Traviata, Don Giovanni, etc.

    Look at the MET, Houston, or any major American opera house. You’re likely to see rather dull seasons, where the most adventurous is a ‘rare’ Verdi such as Ernani (MET) or I Due Foscari (Los Angeles). The next MET season is not bad (with several Strauss, a Britten, A Shostakovich and a Borodin, in addition to Two Boys). The one which just ended, apart from The Tempest, only has one Poulenc and one Zandonai on the ‘adventurous’ side.

    Los Angeles has, in three (!) seasons, staged two Brittens, one Glass and Thais, in addition to I Due Foscari (with Domingo) outside mainstream repertoire. San Francisco has been much more daring, with 4 world premieres and several outsiders (Nixon in China, Moby-Dick, Mephistopheles, etc.). Washington has one world premiere and Moby-Dick on the audacious side. All the rest is repertoire warhorses. As for Chicago, in the same 3 years, the most daring piece was…Elektra!

    I don’t see how programmes will be improved by privatizing the ROH. I expect the contrary, with a narrowing of the range of operas presented and soloists invited. Could you explain how exactly diversity would be encouraged?

    • Kenneth Griffin says:

      I presume that the ROH proposal isn’t privatisation but retention of charitable status with phased withdrawal of public funding and its associated constraints on activity. The diversity of the programme could be supported by charitable trusts and targeted donations.

  16. Fabio Fabrici says:

    A very easy (dis)solution to the “art-follows-money” misconception would be to reintroduce the gold standard, but instead of backing the currency with gold we back it with art in all it’s materialized forms…

    Isn’t art, together with science, the ONLY achievement mankind can claim to have outgrown our biological ancestors on the trees?

    Let’s make it the backbone of our value systems. And then bankers will kneel in front of the artists, not the other way around.

  17. Mark Pemberton says:

    Couple of points to raise here:

    1. The Met relies on its huge endowment, built over over 100 years through the US system of tax breaks. ACE could not cease funding the ROH until such time as it had been able to build a similarly sized endowment.
    2. Most arts organisations do not charge VAT on their tickets, under the ‘cultural exemption’. As a result they are unable to reclaim VAT on production expenses.

  18. chris charles says:

    Probably a bit late to comment now, but I’d abolish ACE and give the money to the BBC, with a brief to identify and develop, across all media platforms, events and organisations that could benefit from such support and exposure

    Apart from providing a more realistic perspective as to what is worth supporting, this could also help differentiate the BBC’s role in UK society so that it has less need to ape commercial media

    Just a thought

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