Funding the North East culture sector:

A report to the Heritage Lottery Fund

Nigel Merriman

March 2014

Contents

1 Introduction 3

2 Impact on financial resources of the sector 4

3 The impact of the cuts on the North East Culture sector 8

4 Responses in the North East 9

5 Strategic choices 12

6 Conclusion and recommendations 22

7 Bibliography 24

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1 Introduction

As the Heritage Lottery Fund’s brief for this report states:

‘The recent economic crisis and the government’s austerity measures have had a negative impact on the financial stability and resilience of the heritage sector. The credit crunch and the subsequent recession reduced the value of endowments and investments held by the major Trusts and Foundations that fund heritage, and hit corporate giving, before subsequently leading public spending cuts.

The scale and pace of the reductions required of the local government sector appear to be greater in the North East than in other region and will be extremely challenging to deliver, with significant impacts on the public, private and voluntary sectors and on citizens and communities.’

At the same time the North East has suffered more than most of the English regions:

Unemployment still remains higher than the national average; on 31st March 2014, it stands at 10.3%, higher than the December 2013 figure of10.1%, whilst over the same period unemployment has fallen nationally to 7.1%

The 2010 Index of Multiple Deprivation shows that the North East is home to some of the most deprived wards in Britain. This is not likely to improve in the next review of the IMD, given rises in unemployment, changes in benefit rules and price rises in food and energy

Public health statistics also show that the North East faces some of the greatest challenges to health and well-being.

Hence the cuts have affected every aspect of life in the North East, not least cultural life and, at the same time, provided even more reason that the sector should ensure that it makes its contribution to improving the social and economic fabric of the region.

The task is therefore to undertake desk and field research to explore the effects of cuts in the heritage sector in the North East region and identify options for how heritage organisations might find funding in the future.

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Hence the Heritage Lottery Fund (HLF), in setting my placement task to review the fundraising capacity of organisations in the North East, recognise that little has been done on this topic and therefore this dissertation will enable me to make a contribution to the sector’s knowledge.

Having completed the required literature review, desk research and interview schedule, this report sets out to explore a very large, complex and important topic, by reviewing the financial crisis and its aftermath, describe the impact on the sector in the North East, identify the key challenges and issues for the future and to examine a range of approaches that may assist in helping the sector to recover and grow.

As the Coalition’s Budget 2014 statement proved, its commitment to long-term austerity clearly infers that culture and heritage will not escape further cuts, so new strategies and approaches must be found.

2 Impact on financial resources of the sector

The House of Commons Culture. Media and Support Committee recognised in 2011 that the impact of cuts would have far-reaching consequences:

‘ In some parts of the heritage sector it will take several years for the full effect of the cuts to be felt. Many of the submissions emphasised that public-private partnership funding was an essential component of the heritage sector and would be severely effected. Lottery awards of over £50,000 require partnership funding of at least 10% with awards of over £1 million requiring applicants to raise 25%. In many cases this comes from local authorities, which are themselves cutting budgets. Some larger urban regeneration schemes and public historic park projects require 70% match funding from within the public sector.’ 1

Cultural organisations in every region have depended for decades on a mix of national, regional and local public funding, with lesser amounts of funding from corporations and other sources. Hence, the response of the main funding organisations have, in many cases, increased competition for scarcer resources and set new and challenging criteria.

1 House of Commons Culture. Media and Support Committee. Funding the Arts and Heritage. March 2011. Page 47.

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In their exploration of Arts Council Funding decisions, for instance, the Committee states:

‘ With the new National Portfolio programme comes a shift in the criteria used by the Arts Council to make funding decisions. For the National Portfolio, the Arts Council is assessing all applications against criteria that extend beyond the artistic work of the organisation and includes factors such as governance and financial sustainability.’ 2

Although the Heritage lottery Fund and Arts Council England have been the resilient, yet obvious backbone to regional funding throughout the country, other public funding is and has been available throughout the years of austerity. English Heritage, Natural England, Coastal Communities Fund and supplementary European funding has also aided the heritage and culture sector via geographical and sector specific initiatives, including environment, regeneration, rural landscapes and technology.

Admittedly, this funding may not provide a direct route into heritage and culture funding streams but they do offer limited alternatives to organisations that are prepared to work in a partnership framework to access collaborative funding streams.

Cultural organisations outside of London were particularly hit by cuts in the budgets of local authorities, which in many cases were their main funders, no more so than in the North East:

‘ Councils were cut earlier and harder than the rest of the public sector as the Government began to implement its deficit reduction policy. If the same pattern of cuts to the public spending is replicated in the next spending review, councils will not be able to deliver the existing service offer by the end of this decade. Fundamental change is needed to one or both of:

The way local services are funded and organised Statutory and citizen expectations of what councils provide.’ 3

The report went on to say:

2 House of Commons Culture. Media and Support Committee. Funding the Arts and Heritage. March 2011. Page 31.

3 Local Government Association. Funding outlook for Councils from 2010/11 to 2019/20: Preliminary modeling. June 2012. Page 2. [online] available from < http://www.local.gov.uk/web/guest/publications/-/journal_content/56/10180/3626323/PUBLICATION>

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‘We have also modelled future services spending demand, assuming that efficiencies will make it possible to reduce spending in real terms over the whole decade. Our demand forecasts err on the side of caution.

On these assumptions, our model shows a likely funding gap of £16.5 billion a year by 2019/20, or a 29 per cent shortfall between revenue and spending pressures.’ 4

These cuts not only affected the resources available for the sector but have also impacted on skills base of the sector, and its ability to retain key staff. This happens in every sector; as soon as there is even a rumour that a sector or employer is making cuts the most talented and experienced people look for jobs with other employers, and some leave the sector for good.

In this case, the impact is therefore not only on museum and heritage staff but also on experts in local authority archaeology and conservation departments and those employed by private sector museum and heritage consultancies.

‘Given the cuts in local authority budgets and the removal of ring-fencing for local authority spending, it would seem that once again local authority conservation officers are under threat.’ 5

The House of Commons Culture. Media and Support Committee also expressed concern about any significant moves to reduce the sectors expert teams and replace them with volunteers.

‘ Volunteers cannot plug the skills gap left by a reduction in the number of heritage professionals. Volunteers play an incredibly valuable role in the heritage sector, but the Government must not be tempted to think that the success of the volunteer sector can excuse reducing the number of skilled professionals.’

Hence the Committee urged that the sector’s skills must be safeguarded for its long-term survival. 6

In attempting to minimise cuts, the Culture Committee also highlighted to H.M. Government the importance of the sector to the UK’s tourist economy:

4 Ibid5 House of Commons Culture. Media and Support Committee. Funding the Arts and Heritage. March 2011. Page 50. 6 Ibid, Page 52.

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‘ We commend the Government’s recognition of the importance of heritage tourism in Visit Britain’s budget, but note that the heritage sector has already suffered disproportionately from funding reductions over the years.’7

The Commons Committee cited the Heritage Lottery Fund and Visit Britain report, which stated that heritage tourism is a £124.4 billion a year industry, with domestic tourism and ‘staycation’ being the main component:

‘ Although the Government has acknowledged the importance of heritage tourism to the UK economy and Visit Britain’s £50 million marketing budget has been protected as part of the CSR settlement, continuing concern has been expressed about the value Government attaches to heritage. The Heritage Alliance, Historic Houses Association (HAA) and HLF have told us that they think the impact and economic potential of heritage tourism has been undervalued by government is the past.’ 8

This echoes one of the key themes, ‘staycation’, that One North East had presented in its ‘Passionate about Places’ tourism and culture strategy for this region.

The Coalition’s decision to abandon Regional Development Agencies removed another key source of regional funding for many museums and other cultural organisations in the regions. Seen as a stimulant for Tourism and broader economic development, a vital resource for education and skills, as well as a vital part of the cultural capital for attracting inward investors, the demise of these organisations exacerbated the impact of the sector’s funding crisis.

The 9 RDAs were replaced by 38 Local Enterprise Partnerships (LEPs), two of which cover the North East, though their impact is yet to be felt by the sector as they are only now submitting their Strategic Economic plans, along with their accompanying EU Structural Funding Frameworks 2016-2021, to the Department of Business, Innovation and Skills by the end of March 2014.

Recent changes in the EU Funding Framework will affect policy and Governance of Local Enterprise Partnerships (LEPs) potentially providing councils across the region with a greater balance of power and influence on any new directives. Hence it is important to explore the ways in which LEPs, working in partnership with local authorities, can provide support in the future.

7 Ibid, Page 5.8 Heritage Lottery Fund & Visit Britain. Investing in Success – Heritage and the UK Tourism Economy, March 2010 – quoted in House of Commons Culture. Media and Support Committee. Funding the Arts and Heritage. March 2011. Page 44.

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3 The impact of the cuts on the North East culture sector

The North East has some 67 accredited museums, 30 of which are run by local authorities, 11 by volunteers, 10 by independent trusts, 8 by the National Trust, 4 by English Heritage, 3 by Universities,

The North East is also home to two World Heritage sites – Durham Cathedral and Castle and Hadrian’s Wall. Northumberland also contains a national park and two areas of outstanding Areas of Outstanding Natural Beauty.

Unfortunately, the North East area was one of the hardest hit regions following the financial crisis, as much of its cultural sector’s funding was dependent not only on national public funding but also funding from local authorities.

Authorities in the North East faced some of the most savage budget cuts, which, in turn, led to hard choices and consequently huge reductions in the funds available for the sector. Newcastle City Council, for instance, announced a 50% cut to its arts and culture budget.

A further blow to the North East’s culture sector was the demise of the Regional Development Agency, ONE North East. The Agency had been a strong advocate and supporter of the sector, not only for its importance to attract new business investment and to support the tourism industry but as a key employer too. The Government Office North East, for instance, stated that:Culture, tourism, sport and recreation businesses and creative industries employ nearly 10% of the Region’s workforce. 9

So far, most of the organisations have found ways to survive, with the only casualties to date have been Durham City Arts, Wildflower Ark, North Pennines Heritage Trust and, most recently, the impending closure of Hadrian’s Wall Trust. This could be about to change with new budget reductions for culture and heritage.

9 Government Office of the NE. The North East of England Plan Regional Spatial Strategy to 2021, July 2008, Page 81

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Hence the funding and supporting organisations that still exist across the region are focused on finding ways to continue and secure the sector.

4 Responses in the North East

The financial crisis and its impact on regional structure and organisations has led to both a re-focus on supporting the North East’s culture sector and stimulate new supporting initiatives.

For instance, the Community Foundation; Tyne & Wear and Northumberland was established initially in 1988 to address regional specific social and cultural issues. Since the funding cuts, it has increased its focus on culture, partly due to the fact that Newcastle City Council has gifted the Newcastle Culture Fund to be managed by the Foundation. This may provide a possible role model for the management of regional cultural funding for the future.

In addition, a new partnership, the North East Cultural Partnership (NECP) was launched in 2013. It aims to harness the power of culture to promote health and well-being and forge a dynamic and successful economy. Co-ordinated by the Association of North East Councils, it includes elected members from all 12 local authorities in the region and leaders from arts, cultural, North East Chamber of Commerce and educational organisations.

Its focus on the economic and cultural benefits is not new. However, its focus on health and well-being is something that is only recently being recognized. Indeed, Newcastle University’s School of Arts and Cultures is establishing a reputation for its research in:

The role of creative interventions in fostering connectivity and resilience in older people

Dementia and Imagination Contemporary visual art and identity construction – wellbeing amongst

older people Contemporary visual art and the wellbeing of older people: policy and

practice Research for Community Heritage – North East England – phase 1 Research for Community Heritage – North East England – phase 2 Ageing Creatively. 

In fact there are already instances of North East museums taking an initiative. For instance, Newcastle Discovery Museum has just hosted a Conference on

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well-being (March 25 2014) and Beamish Museum has been engaged in initiatives to help sufferers of dementia for the last three years to support the Dementia Society’s annual awareness week.

Guidance has just been published on this important role, showing that this is clearly an area that is of increasing interest to the public health authorities and may provide a source of resources that will assist the sector’s organisations to develop a funding strategy. 10

In recognising the North East’s dependence on public funding and the need for hybrid funding strategies, the North East Culture Partnership recently prepared a submission to DCMS Committee’s inquiry into Arts Council England. Its website outlines it key observation, dated February 2014:

The limiting of ACE’s regional contribution by a growing distance from decision-making powers. Driven by successive funding cuts, this is reducing input from locally-informed expertise and knowledge

Our keenness to work with ACE on new ways of delivering funding and activity in the regions. These could draw in fresh funds and better achieve regional and national ambitions

ACE should create partnerships that devolve or share some areas of investment with expert regional groups such as NECP. This would assist a more equitable and effective geographic distribution of funding. It would build on the model of current partnerships with NESTA et al.

A need to rebalance funding that effectively takes money from regional economies to invest in London-based organisations.  The whole of England must also benefit more from ‘national’ organisations

We do not believe that subsidy per attendance is an appropriate metric to shape decision-making. It will discourage risk-taking and long-term thinking

We wish to work together on determined and sustained efforts to rebalance the current geographical pattern of distribution. ACE should invest in the many high quality and high impact arts and cultural organisations in the regions.

10 Chief Cultural and Leisure Officers Association on behalf of the National Leisure and Culture Forum. ‘ The role of culture and leisure in improving health and well-being..March 2014.

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It is interesting that the NECP note that more Lottery tickets are sold in the North East than any other region of the UK. However, in terms of total receipt of Lottery Fund contributions to regional cultural institutions and initiatives, the North East in is in the bottom three of the nine English regions.

This is largely because fund distribution is based on per capita population. In fact the North East is not only the smallest of the nine English regions but has also faced an even greater demographic downturn in recent years due to skills and economic migration and has attracted smaller number of economic migrants than the other regions. Hence the prospects of increases in HLF funding in the near future are remote.

Another factor though, according to the recent study led by Peter Stark, which focused on rebalancing the cultural economy is that, despite the fact that the North East’s cultural sector has traditionally been a less-well resourced and skilled fund raiser, with little private sector investment, it may be argued that the sector has fared well so far since the recession when compared with other regions. 11

For instance, visitor numbers remained strong in the early years after the credit crunch. The fact that the newly’ refurbished Great Northern Museum received over 170,000 visitors in the first five weeks of its reopening in 2009, for instance, and that, three years later, it still attracted almost a quarter of a million visitors between April and August in 2012, shows that there is a considerable appetite for culture in the North East.

In April 2010, Newcastle’s paper ‘The Journal’ reported that museum attendance in Tyne and Wear had reached an all-time high, breaking the two million barrier for the first time. However, by February 2014, the Journal reported that museum visitor numbers had slumped at North East museums ‘as cuts bite’, with museums losing up to 17% of their visitor numbers in 2013.

In essence their survival so far has been based on reducing their operating costs, through shorter opening hours and reduced programming and reducing staff levels and replacing them with volunteers.

These measures and the ever-extending austerity timescale set by HM Government suggest that this is not so much a short term fix, as it may have appeared in 2011, but in fact will require a wholesale cultural shift.

11 Peter Stark, Christopher Gordon & David Powell. ‘Rebalancing our cultural capital: A contribution to the debate on national policy for the arts and culture in England.’ 31 October 2013.

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Hence there is a need to fundamentally review the funding strategies for the overall cultural and heritage sector and for every one of its organisations as, unless the overall funding pool is enlarged, organisations will continue to compete for reducing resources.

5 Strategic choices

As Naomi Kinghorn, the National Trust’s Grants Consultant for Yorkshire and the North East noted:

“I know that the main aim of your report is to look at the impact of the current financial climate on funds received, but this is not clear cut or easy to measure unfortunately! Changes in fundraising income over the past few years is really difficult to assess for a number of reasons; for grants, as these depend on the projects we wish to carry out and change on an annual basis, for legacies, as due to their nature any impact of the financial climate will not be seen for years to come (when those legacies are realised).

What is noticeable in grants income is the absence of government funds for heritage, culture, tourism. The majority of statutory funding is focused on economic outputs which tourism will find hard to achieve (competing with industry standards). Therefore the main remaining funders are highly over-subscribed and finding matched funds much harder to find.’ (E-mail correspondence, 26 July 2013)

The interdependence of local economies with the cultural sector is well illustrated by the House of Commons North East Regional Committee’s report, ‘Tourism in the North East’, which cited that ‘Some eighty percent of businesses along Hadrian’s Wall are cited as saying that the Hadrian’s Wall country brand is essential to their sustainability.’

In exploring the impact on tourism however, the Committee in fact pointed the way that cultural organisations in the North East and in every region must go in the future:

‘ We commend the Government’s recognition of the importance of heritage tourism in Visit Britain’s budget, but note that the heritage sector has already suffered disproportionately from funding reductions over the years.

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Arts and heritage organisations should be encouraged to become more commercially aware and explore other funding streams, although we note that this will be harder for some smaller bodies and those outside London and metropolitan areas.

While we think that, for reasons of culture and size, it is unlikely that the UK will ever have a culture of philanthropy and private investment in the arts that resembles that of America…. We are critical of the Arts Council’s decision to withdraw funding from Arts & Business, which facilitates links with industry and commerce. It is a significant omission, too, from the Government’s ‘philanthropy strategy’ that it has suggested no reforms to the tax or gift-aid system to encourage contributions and we urge it to do so.’ 12

The interviews that form part of the research for this report demonstrate that there is a growing recognition of this and has identified a range of challenges and approaches across the region:

As Ian Barnes, Principle Regeneration Officer, Middlesbrough Council states in a recent interview ‘…most of the funding for projects in Middlesbrough Council has been secured from the Big Lottery with contributions from project partners Natural England and the Heritage Lottery Fund, as public sector funding cuts were imposed’.

Other sources of funding have been received including from ESF, the Regional Growth Fund, the Working Neighbourhood Fund and Tees Valley LEP, but of course this is for general social and economic initiatives, rather than specifically for the culture sector.

Iain Watson, Director of Tyne and Wear Museums reported that grant-in-aid has fallen by 35% over the last three years, up until 2013, and it is anticipated to fall by the same amount over the next three years.

Hence the organisation cannot be reliant on public funds. TWAM therefore engaged external consultants to review every aspect of its operations. The consultants are now working with the Service to improve their fundraising practice to increase earned revenue by 25% by 2015.

They are aiming to increase the footfall to all of the Service’s venues and are educating all staff to how to engage the public in

12 House of Commons Culture. Media and Support Committee. Funding the Arts and Heritage. March 2011. Page 5.

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understanding the organisation’s mission and the new funding imperatives. Iain already attributes the increase of over 400% in individual contributions over the last year to this strategy.

Christine Dent, the newly appointed fundraiser for Durham Wildlife Trust also demonstrates the new funding reality for the North East region

‘…the volume of organisations applying for funds has increased and levels have dropped, giving less to more’.

Christine reported that funding success from the application processes has been challenging, with a one in ten success rate. Recognising that their current funding steams are predominantly through membership and public grants, the Trust realizes it must diversify its income streams, including increasing sponsorship, retail and earned income and is currently reviewing references of preferred fundraising consultants to assist in their fundraising strategy development.

Richard Welsby, Director of Finance, Bowes Museum reported that though the Council is still the main public funder, the Museum’s fundraising strategy now has a mix of private and public funders to supplement their paid admission policy, catering and special event earning streams. These together raise 60-70% of the necessary funds.

The Museum utilises its senior staff and board members .to enhance their fundraising capacity. Legacies are also in place, which occur on a two to three year frequency.

The recent successful application to the HLF Catalyst Endowment Fund in 2013 will enable the Museum’s target to raise £1 million over the next four years to be matched by a further £1 million, creating a £2 million endowment fund that will hopefully continue to grow thereafter.

Adam Lapardo, of the Community Foundation, Tyne and Wear and Northumberland, understandably was able to provide a strategic overview. He observed that organisations generally need to develop an understanding of their target donors and become educated fundraisers with regard to donor engagement.

This includes improving the organisation’s awareness of their potential donors and when to ask as he believes that frequently opportunities are being missed by not asking! He also emphasised that it is

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imperative for organizations to educate the audience as to their need to be funded.

Adam noted that fundraisers have identified that regionalism is a powerful association for any potential funder, highlighting the strength and individual characteristic of that community. Funders are looking to make a positive impact with the people they have identified; hence they reward strong community engagement.

He observed that funding for capital projects is an easier request to justify as it has a tangible asset associated with the end result and a high profile opportunity regarding sponsor visibility and PR.

Adam cited instances of good practice, including Northern Stage’s hosting an annual dinner for their patrons, moving to enhance their facility via the offer of training and space to corporate bodies. They have also matured a long-standing sponsorship with Dickinson Dees.

Overall, he believes that new techniques are predominately overlooked or not understood in the NE and regions in general ie. Crowd funding, and that Legacy building at present is not a fully utilised fundraising mechanism and is thus only producing a low donor yield at present.

All of these quotes in some way point to the way forward that the House of Commons Committee alluded to in its report:

‘ An emerging model of arts funding organisations is for one-third of income to come from state subsidy, one-third from box office and the remainder from commercial revenue sources. This contrasts with the United States, where arts funding is reportedly 90% private, and continental Europe, where public funding is considerably higher than in Britain or the US.’ 13

The model emerging is one based upon using existing institutional income streams to supplement any public funding. These established streams include:

Corporate sponsorship: The support of an event, activity, person, or organization financially or through the provision of products or services. A sponsor is the individual or the group that provides the support

13 House of Commons Culture. Media and Support Committee. Funding the Arts and Heritage. March 2011. Page 11.

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Trading: The procurement of organisation-related merchandise to sell at a profit to raise additional funds

Trusts & Foundations: A legal definition outlining the work of a charitable not profit organisation established to perpetuate the mission of the founding members, usually to fund other charitable organisations.

My experience of working in a museum in Chicago in 2001, shortly after 9/11, showed that funding for arts and culture dried up overnight, as funding was redirected to the 9/11 appeal, forcing organisations to find alternative mechanisms for reducing their operating budgets. One such innovation was the sharing of backroom resources, such as HR, accountancy functions as well as expert skills and knowledge across the museum city-wide network.

Additionally, and perhaps surprisingly, taking stock of the existing team’s experience and strengths by undertaking a skills audit and opening a dialogue with employees and colleagues proved beneficial. This was a useful, both in terms of cost saving and as an enlightening process to discover the additional talents of our museum labour force.

We also discovered holding open forum events that provided an opportunity to discuss and educate people about the funding structure of the museum led to helpful budget re-allocation. This included educating department managers in cost saving controls that could be placed upon programmes in order to maximise their budget, including the use of in-kind donations, as well as, importantly, not utilising the whole budget if it was not required.

The future for UK fundraising is a complex mix of experience and education, networking, sophisticated donor management software and approaching every situation with entrepreneurial flair to enhance any opportunity to secure a funder.

The currently accepted methods employed to raise addition revenue sources in the UK can only be enhanced by means of new techniques. Recent practices have been established, especially in the USA, that are more sophisticated, technologically advanced and offer more convenient methods to make donations.

‘ We have a large number of responses from a wide range of organisations, with mixed views on the question of whether arts bodies could co-operate

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more. The RSC wrote that larger organisations “ have a responsibility to share skills, expertise and resources with others in the sector.” 14

The range of new approaches and techniques includes:

Crowd funding: The use of small amounts of capital from a large number of individuals to finance a new venture.

Crowd funding makes use of the easy accessibility of vast networks of friends, family and colleagues through social media websites like Facebook, Twitter and LinkedIn to get the word out about a new business and attract investors, this is usually achieved by an online means of a web platform.

For example, Bradford Archaeological Service successfully used this approach to attract niche donors wishing to follow their passions. Hence it is a good mechanism for stimulating donor passion and emotional commitment to a cultural theme or organisation.

More locally and more recently, however, the Bowes Museum harnessed a crowd funding platform, ‘Kickstarter’ in March 2014 as part of the package to enable the commissioning of a neon light installation by Gavin Turk; one of the first crowd funded initiatives in the North East.

Friends groups: Is a process of maximizing the cultural capital that has been established within the organisation. This utilises the assets of visitors, volunteers and employees to work towards a common outcome.

Legacy building: Harnesses the long-term support of individuals and at an appropriate time engages them to secure a bequest in their will.

Corporate membership: Corporate membership is a straight forward exchange of cash for services, providing an employee benefit to a business whilst providing an additional low cost revenue stream for the organisation

Individual donations: The solicitation of people with sufficient disposable income to donate on a regular or large-scale basis.

14 House of Commons Culture. Media and Support Committee. Funding the Arts and Heritage. March 2011. Page 32.

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Endowment: An investment fund set up by an institution in which regular withdrawals from the invested capital are used for ongoing operations or other specified purposes. They are funded by donations, which are tax deductible for donors.

Income generation/diversification

There are several examples of organisations in the North East that have begun to find new or alternative approaches to diversify their income, including successful campaigns: Northern Stage, Dance City Sage, MIMA and Baltic.

Interestingly, Seaton Delaval Hall’s recent purchase by the National Trust was greatly assisted by fundraising initiative that was accomplished through a partnership with the local community. This resulted in over two million pounds being raised from the local community. (BBC Home website, “Tyne, local history” January 2009)

Even what might at first seem to be a local or a regional campaign such as this can attract significant financial support from an international audience, as this project also attracted funding from Egypt, Japan and New Zealand.

New roles for cultural organisations

The report has already outlined that cultural organisations can greatly assist in supporting education and skills development and in improving the health and well-being of people in the region. This is being increasingly recognized by national and local organizations.

For instance, the Heritage Skills Initiative (HSI) was initiated by the North East Historic Environment Forum and is hosted by North of England Civic Trust (NECT). By mapping existing training, assessing the present skills base and reviewing demand for skills in the region, HSI finds ways of stemming heritage skills shortages creates opportunities for training and supports an active heritage skills network.15

The heritage sector in the North East is well-placed to tackle the regional skills deficit. Museums and heritage sites are inspiring places. They provide alternative learning environments and a focus through which aspirations and confidence can be raised.

15 English Heritage. Heritage Counts 2013; North East.

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Hence the North East LEP has also recently published the findings of an economic review, undertaken by Lord Adonis, which highlights issues around school performance, a need for higher level skills, a greater take up of Science, Engineering, Technology and Mathematics subjects in schools, colleges and universities (STEM) as well as an increase in the number and quality of apprenticeships to secure more and better jobs for local people.16

The region’s cultural organisations should not only accept their role in the skills agenda and in the health and well-being agenda but also actively plan their strategic role, not least because this could give access to additional funding streams.

Entrance fees

Irrespective of whatever the initial driver behind the establishment of a cultural institution might have been, the capability to attract visitors is a crucial function for all institutions and sites. Clearly, the scale of visitor numbers is a function of a number of variables, from its geographical location and transport networks to the nature of its collections or subject matter and its visibility. These combine in turn to determine the capacity of each institution or site to make entry charges.

So, for instance, visitor numbers to the Grace Darling Museum in Northumberland, even if they were fee-paying, are unlikely to ever be sufficient to cover operating costs, given its remote location and poor transport links. Hence in 2013, the RNLI decided to scrap the admission charge, choosing instead to supplement the core operating costs from its overarching organisation and other sources. As the Museums Association reported, ‘The museum, which welcomed 26,996 visitors last year, hopes to fill the funding gap through donations and shop sales. It will charge for activity days.’ 17

In contrast, forty miles away and drawing essentially on the same resident population, Beamish The Living Museum of the North, has adopted a different but successful pricing policy. As the Newcastle’s

16 The North East Independent Economic Revire Report, April 2013. http://www.nelep.co.uk/media/2935/nelep_ipad-version_hires.pdf

17 Harris, G. (2012) ‘Free Entry at Grace Darling’ Museums Journal [online] (112/02), 13. Available from < http://www.museumsassociation.org/museums-journal/news/01022012-free-entry-grace-darling#.Um_AOi1JlaY.email> [28 November 2013]

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Journal newspaper reported, ‘Yet visitor numbers to the large open-air site near Stanley have almost doubled over the last five years, since it introduced an ‘unlimited ticket’ ticket with 12 months’ admission for the same price as a day ticket.’18

The article continues to say that there was ‘’a 19% increase in visitor numbers between 2012 and 2013’, providing the best year ever in the 43 years of the museum’s history. This would suggest that an entry-fee per se is not a barrier to attracting audiences, given the generally accepted fact that museums and other cultural organisations fail to attract the least well-off in society. This is well illustrated by Andy Martin’s observation that ‘Transport and money issues do still prevent some people from visiting (predominantly DEs, those without formal qualifications and people living in the north of England) but….the implication would appear to be that for the majority of non-attendees, museum and galleries simply do not appeal all that much.’ 19

My recent research for my MA necessitated evaluating the contribution that entry fees can play in funding cultural organisations. Having reviewing all of the available books, articles and other sources it would seem that there is an emerging acceptance, if not consensus, that charging an entry fee is unavoidable in many cases, irrespective of political persuasion, and that other ways to address social inclusion can be found.

This is well demonstrated by the report in the Guardian in 2011, which reported that Tristram Hunt, now Shadow Secretary for State for Education, ‘argues passionately for the claims of regional institutions locked in what he regards as a two-tier system. Many regional museums have no choice but to charge, especially in the light of local authority funding cuts wrought by the coalition government.

Free entry to national museums is largely, Hunt argued, of benefit to ‘American tourists and continental mini-breakers.’ If the aim is to make museums available to all parts of society, he wrote, the work must be done through carefully targeted outreach, rather than by free admission.

18 Proctor, K. (2014) ‘Beamish Museum celebrates record number of visitors’ The Journal

available from < http://www.thejournal.co.uk/news/north-east-news/beamish-museum-celebrates-more-half-6681858> 19 Martin, A. (2002) Cultural Trends The Impact of Free Entry to Museums [online] http://dx.doi.org/10.1080/09548960209390329 [20 November 2013]

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In addition to the approaches outlined above, there are three key areas that cultural organisations should be encouraged and supported to achieve wherever possible:

Strategic development review – Undertaking a review of all core operations on a regular basis. This enables a reciprocal process of communication between management, staff and volunteers to help identify and address issues as they arise

Planning – Creating an over-arching framework to operate within, with SMART short, medium and long term objectives and targets, each with a set of criteria for achievement

Monitoring – Undertaking a commitment to monitor all operations over a given timeframe to provide a reflective analysis and the ability to identify and resolve issues as they arise.

Sustainability – Ensuring that a self-sustaining fundraising element is included in the overall funding plan for any project that is required to run over a period of time.

The North East’s cultural sector has maintained a robust stance with regard to managing the continuing economic downturn and public sector cuts. However, this has only been achieved by being ‘canny with its cash’ and responding with appropriate measures to counteract the lack of financial resource by reducing operating costs etc, the situation could have been far worse than the three organisations that have had to close.

Moving forward there is a desperate need for a strategic outlook, to plan for the future and up-skill the cultural work force with fundraising techniques. To some degree this situation is being addressed by the larger cultural institutions especially in the South of England, however, the sector as a whole has to acknowledge the need for fundraising training; otherwise new funding streams will become exacerbated without professional management.

In summary, my experience of working with the Heritage Lottery Fund on placement since April 2013 has confirmed that:

The sector has done well to survive the impact of cuts since the financial crisis

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Cultural organisations in the North East that have depended on public funds are facing continuing reductions in their budgets

They are generally ill-prepared to exploit plural funding mechanisms and revenue diversification; indeed some are reducing their operating costs rather than finding new revenue steams

Many of the organizations who have an ambition to increase their revenue streams currently lack the skills and personnel to do this

There are some encouraging examples that have been included in this report that must be mainstreamed

HLF, as one of the few public funders left, are well placed to assist or lead in this mainstreaming and in helping its recipient organizations to be strategic in their funding plans, thus assisting HLF in finding the funding match to enable HLF to maximize the funding available in the North East.

6 Conclusion and recommendations

My experience of working in a museum in Chicago in 2001, shortly after 9/11, showed that funding for arts and culture dried up overnight, as funding was redirected to the 9/11 appeal, forcing organisations to find alterative devices for reducing their operating budgets.

One such innovation was the sharing of backroom resources, such as HR, accountancy functions as well as expert skills and knowledge across the museum city-wide network. This illustrates that what the House of Commons Committee was recommending became a reality three years ago in Chicago and other cities across America.

As the cultural landscape begins to settle after the imposition of the austerity years, a new and gradually emerging model of arts funding is beginning to become established; a mix of one-third of income to come from state subsidy, one-third from box office and the remainder from commercial revenue sources. This would appear to be the way forward, a sensible, robust, financially resilient step change for the future of cultural funding in the UK.

HLF can assist and enable this model to flourish in a number of ways:

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HLF provide capacity building through a range of support mechanisms:

HLF act as a mentor for the Heritage sector, providing best practice guidelines, establishing local, regional and national grantee network to share information.

Provide online content and tools to enable cultural organisations to produce robust funding plans

Provision for an online fundraising community to encourage collaborative support networks

Training days – Skills, fundraising and management training to secure HLF investment in grantee organisations.

Provide appropriate fundraising software and access grants

Conferences – Identify major topics in the sector and present issues and solutions.

Explore ways in which an HLF online community can provide a planners forum to unite common themes, events and reduce operational costs.

Nigel Merriman31 March 2014

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Resources

Key Publications

http://hc.english-heritage.org.uk/content/pub/2012/bop-heritage-organisations-

resilience.pdf

http://www.publications.parliament.uk/pa/cm201011/cmselect/cmcumeds/

464/46406.htm

Media Articles

http://www.bbc.co.uk/news/entertainment-arts-22525196

http://www.guardian.co.uk/culture-professionals-network/culture-professionals-

blog/2013/mar/08/newcastle-arts-cuts-culture-fund

http://www.ft.com/cms/s/0/13a81c20-e887-11e1-8397-

00144feab49a.html#axzz2RrDrsNm7

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