Olympic Games 2012: Heritage and Arts Funding

My Lords, I am grateful—I think—to the noble Lord, Lord Baker, for securing this interesting and timely debate. As he said, he is an old friend, and I very much hope that our friendship will survive the speech I am about to make. I thank the noble Lord, Lord Coe, for coming here today in his position and for making a measured and interesting contribution to the debate. It contrasted with the mood of some of the other speakers. We have got the Olympics, which is absolutely brilliant and will bring enormous benefit to this country. Of course there are problems, some of which have been raised today, but we should not be quashed by them. Noble Lords have raised many interesting points; I am afraid that I will not be able to answer all of them in my 20 minutes, but I promise to write after the debate to those whom I cannot answer now. I wish to put this debate in a political framework—that is what my notes say, but in fact, the noble Lord, Lord Baker, did it for me. In her memoirs, The Path to Power, published in 1995, Margaret Thatcher made the following point—the only point about the arts in the entire book: "““There were more discussions of public expenditure that autumn of 1970. The Treasury had its little list of savings for the education budget—including charges for libraries, museums, school meals and school milk. I knew from my own experience . . . how vital it was to have access to books. So I persuaded the Cabinet to drop the proposed library charges, while reluctantly accepting entry charges for museums and galleries””." Fast forward to when the Conservative party lost the 1997 election—arts funding stood at £187 million a year. Incidentally, it stood at £139 million when the noble Lord, Lord Baker, was Secretary of State for Education in 1988. This Labour Government increased that investment from £187 million, with a real terms increase of 73 per cent, to £412 million this year. This transformed the landscape of the arts in the United Kingdom. A 72 per cent increase in budget for theatre translated into increases in audiences of 40 per cent. Creative partnerships have been developed so that more than 610,000 young people can be involved in creative projects. Grant in aid to museums has risen by 29 per cent in real terms since 1997. Free admission to all our national museums has brought about an 83 per cent increase in total visits to formerly charging museums since 2001, representing an extra 6.5 million visits in 2006. The noble Lord failed to mention Renaissance in the Regions, a scheme I was involved in, to revitalise regional museums. Some £147 million has been invested in that initiative, and I can assure the noble Baroness, Lady Bonham-Carter, that this investment is safe. This Government do not need lessons from anyone on the importance of proper funding for culture, particularly from a senior and distinguished member of Margaret Thatcher’s Cabinet, the noble Lord, Lord Baker of Dorking. This Government have helped create a transformation in the cultural infrastructure of the country. Let me now move to the meat of this debate; the effect on heritage and the arts and other good causes of the transfer of lottery funds to the Olympics. The first thing to say is that the Government have always been entirely clear since deciding to support London’s Olympic bid that money raised from the lottery would be a key part of the funding package. A number of points have to be made that I hope will reassure the arts and other good causes and meet some of their concerns, as well as answering some of the concerns raised today. We have agreed with the Big Lottery Fund that resources for the small, voluntary and community sector will be protected. This means that the sector will still receive at least the amount implied by theBig Lottery Fund’s earlier commitment—around£2 billion. The NCVO has welcomed this, but clearly not the noble Lord, Lord Clement-Jones. The other distributors are also concerned that support for small scale and voluntary sector projects remains available. We have heard that 50 per cent—£210 million—of the Arts Council’s grant in aid funding already goes to smaller organisations and projects and that trend has continued. There has been a lot of discussion about the Olympic Park and repayment to the lottery. The Government will make sure that lottery good causes will have first call on any profits that come from the sale of the Olympic Park after the Games, so a share of money going to the Olympics will return to lottery funds after the games. A number of noble Lords have asked about that—questions that I absolutely agree with—and we will be providing more information to firm up that proposal. In his book Creative Britain published in 1998, my noble friend Lord Smith of Finsbury made the following point, which was also made today by several Peers: "““We must not forget the enormous importance that will still remain for support from the private sector. Arts organisations derive their funding from a range of sources, starting, of course, with their audiences, at the box-office. Additional backing is and must be a partnership between private support and sponsorship, and public subsidy. That partnership is vital””." The noble Baroness, Lady Kennedy of The Shaws, spoke eloquently about that issue and the matter was raised in a positive way by the noble Lord, Lord Luce, but characterised by the noble Lord, Lord Baker, as just getting money from rich philanthropists. The partnership has happened and the proof is that the private sector invested £529.5 million in culture during 2005-06. As we heard from the noble Lord, Lord Baker, earlier this month, the Tate held a gala dinner in New York. That charity has raised $81 million in cash donations. The Tate generates 67p for every grant-in-aid pound. The Royal Opera House only last week received £10 million from the Paul Hamlyn Foundation. But it is not only the big arts organisations that are raising money from sources other than the Government or the lottery. The Watermill Theatre in Berkshire is an excellent example: this small producing theatre represents a classic case of successful plural funding. The theatre’s Save the Watermill appeal is to raise£3 million capital funding. In less than two years, the theatre has raised £2,300,000 from private sources and £200,000 from Arts Council England: South East.  My noble friend Lord Rosser made a point about Sport England in relation to private funding and it is a point well made. There is a temporary diversionof some lottery funds towards Olympics-related projects and there are also, of course, other sources of project funding for entrepreneurial, dynamic arts organisations however large or small. I should like to say a few words about the lottery. It is a success story, raising around £1.4 billion for good causes every year. Figures released last year showed that the National Lottery returned more to society than any other lottery in the world. It is cost-efficient, innovative and reliable. In the previous financial year, more than 35 per cent of revenue was generated through innovations and channels introduced since the start of the second lottery licence. The funding plan for dedicated Olympic lottery games is ahead of schedule, beating the sales forecast in both the first two years of the plan. As the noble Lord, Lord Addington, mentioned, one way in which to mitigate the decrease in revenues for other good causes is to maximise the overall size of the lottery cake. It is also the Government’s intention—this clears up some confusion—that existing lottery projects need not be affected and that none of the money will be transferred until 2009. That point was well made by my noble friend Lord Faulkner. There has been much discussion about the Cultural Olympiad. In their bid to host the Olympic Games in 2012, the Government set out their aspiration to develop a cultural programme alongside the sporting elements of the Games. From the closing ceremony of the Beijing 2008 Olympics, as we heard from the noble Lord, Lord Coe, the UK will commence its Cultural Olympiad, a developing four-year period of cultural activity. The Cultural Olympiad is intended to encapsulate the widest possible range of culture from the arts, museums and galleries, to the historic and built environment, to libraries and archives, to the moving and digital image, from the biggest institutions to the smallest community groups. My right honourable friend Tessa Jowell made an absolute commitment in Liverpool two days ago. She said: "““We will soon be making a detailed announcement of a Legacy Trust—£40 million””—" to support cultural and— "““sports engagement across the UK in the run up to, and during the 2012 Games””." She added: "““My challenge to the Trust is that they spend 70% of their funding on culture””." As we have heard, the Heritage Lottery Fund will contribute a total of £161 million. This means that there should still be left over £700 million of new lottery money for the fund between 2009 and 2012. The Arts Council England will contribute a total of £112.5 million. This means that there will be£500 million of new lottery money for the council between 2009 and 2012. The period of the Arts Council England supporting very large-scale capital grants has come to an end, which means that there is now a focus on smaller grants to organisations and individuals. This fact may go some way to answer some of the genuine concerns we have heard today. That point was made by the noble Lord, Lord Clement-Jones. I should like to deal with a number of points that came up. As I said, I cannot answer all the points but a few themes must be confronted. Many noble Lords asked whether I could promise that no more lottery money will be diverted. The new Olympics budget has been rigorously and independently assessed. We have put in place rigorous cost-control measures. We believe that this is a robust package. It is not inevitable that costs will rise and—this is a crucial point—the inclusion of a £2.7 billion contingency means that, should the need arise, the funds are available to meet it. I will come back to the point that the noble Lord, Lord Howard, made in a moment. A number of noble Lords have talked about the Comprehensive Spending Review, and the double whammy of losing money to the lottery and the spending review being just around the corner. Noble Lords will understand that I cannot say anything about the next spending review, but many points have been made, and they will be noted. The noble Lord, Lord Marland, asked whether the new lottery games for the Olympics are damaging the good causes. Non-Olympic good causes may lose on average about 5 per cent of their income as a result of sales diversion. The new lottery games are on course, as I said earlier, to raise £750 million towards the cost of the Olympics. On the renewal of the licence, the winner of the new lottery licence will be announced by the National Lottery Commission in the summer, and an announcement of the preferred bidder is expected next month. The noble Lord, Lord Watson, talked very interestingly about Scotland and asked what the impact will be in Scotland. The cash contribution of the arts, including film, in Scotland to the 2012 Games will be around £15 million. However, there should still be more than £60 million for the arts, including film, in Scotland between 2009 and 2012. There should still be more than £410 million of new lottery money for Scotland between 2009 and 2012. The noble Earl, Lord Caithness, asked about the Heritage Lottery Fund. He may be encouraged to hear that the HLF expects to absorb the impact of Olympic funding over time, rather than make deeper short-term cuts. That means that there will be less impact on its customers, and it will still be able to provide support to the full range of heritage activities. Between now and 2019, HLF expects to distribute £1.9 billion to the heritage sector, some £180 million a year from 2009 and beyond, and it has also given a reassurance that those projects already-promised grants will be absolutely safe. The noble Lord, Lord Howard, interestingly, asked about what will happen to the contingency. Some£2.3 million would be met from Exchequer funds; the balance of half a billion pounds is to be met from the lottery. The lottery sum is already in the revised figures that were announced a few weeks ago, so if it is not spent, it will simply stay with the lottery. Obviously, it would be rather too much to expect Exchequer funds to pay money to the arts if the contingency is not used. There is an interesting note about the contingency and matters around it, which I will pass to the noble Lord after our debate. I draw noble Lords’ attention to the words of our next Prime Minister, Gordon Brown, speaking at the Brighton festival last Sunday. Much has been said about the present Prime Minister’s views on the arts, as expressed in his speech. Gordon Brown spoke of wanting to achieve two things; first, properly to fund the arts: "““I do intend to make sure that what happens over the next period is not detrimental to the arts and will not allow the fact that we are having an Olympic Games to come in the way of the arts””." The second thing that he wants to achieve is that every young person and every school child gets access to the arts and gets a chance to learn about the great range of culture, from music to drama, and everything else. This has been an extremely interesting debate. I conclude by saying that we were delighted to win the Olympic Games for our country. It will give huge pleasure and benefit to the people of Britain and it will help and encourage sport and the arts. It will leave a massive legacy of great benefit to all our citizens, and the Paralympic Games, which have not been mentioned today, will provide a showcase for some of the bravest and most talented people in our country. That in itself is a worthwhile objective.