Should the Arts Council get More Money?

Photograph Daniel Biber

(Photograph Daniel Biber)

So, with Budget Day just around the corner, a vague promise to double arts funding over the next SEVEN years while facing a crisis in housing, finance, health and – arguably – education, police and defense forces – I thought I’d ask the question: Should the Arts Council get more money?

The answer is “of course they should” – just as all of the others should. However what should happen and what will happen are very different.  Just as the nascent Irish state famously said that “labour must wait” – the reality is that within the ideological frame  of this government the artist must wait.  I think I would be forgiven for thinking that the current political view of artists is that they’re a great distraction (lets all be creative!) and they provide the occassional good photo op.

What I will propose is that just getting more money to the Arts Council (and to local authority arts programme budgets) may not be the smartest objective or course of action from the point of view of either artist or politician.  I accept that State funding, in the current ideological framework,  is justified  as a correction of “market failure”: the  arts can’t survive in a free market so the state (or some patron) needs to step in and prop it up for the benefit of all. But what if we reimagined and redesigned the market so that we removed the failure?

Finally (before I get stuck in to the practical stuff) we need to bear in mind that the arts, culture and creative sector is bigger than the list of funded clients.  The Indecon report of 2010 (to my knowledge the only detailed independent analysis of the arts sector in Ireland) stated that Arts Council funded clients (excluding literature film and venues) had a total expenditure into the economy of €87.8 million, but the total wider arts sector expenditure (excluding Arts Council Clients and  Film and Video)  was €968.6 million – over 10 times the size of the Arts Council Funded sector. As you would expect the job figures are just as interesting , with arts council clients accounting for 809 jobs and the wider arts sector 9,290. When you use Indecon’s very modest multiplier of 1.28 then the total expenditure impact (direct,indirect and induced) of the Arts Council clients is €112.38 million, and the wider arts sector €1,239.8 million. This disparity is reflected in one of the Audiences for the Performing Arts in Ireland reports (2015 I think) that analysed 465 events and found that  23 (5%) were Arts Council funded.

Some theorists (e.g David Throsby) have argued that the Wider Arts Sector develops out of the arts council funded sector, while others will say that the arts council funded sector is poaching from the wider arts sector, selecting winners and promoting narrow cultural narratives.  The reality is, as always, more complex. The two sectors are entangled, each needing and feeding the other, both part of a larger and more complex system.

Regardless of what the relationship between them is we need to bear in mind that an awful lot of the work that creates this value is performed by artists who are unrewarded, underdeveloped and under-resourced; all the valuable development work carried out by performers, musicians, writers, visual artists, that creates the bedrock of the “vibrant culture sector” the government are so fond of talking about. Its also important to bear in mind that only some of those artists move between the funded and the unfunded sector.

So, the Arts Council is only directly reaching about 10% of the wider arts sector and are involved in funding about 5% of all the events. Therefore, is the model of centralised, hierarchical funding the most effective way of getting investment into the wider sector and – more importantly in my opinion – into the hands of the artists. The numbers would suggest that it isn’t.

So what’s the alternative?  Well the first step is to understand how the market is constituted, and identify some key pressure points in the overall design that we can take action on, for example:

  • Artist longevity and resilience (the ability to survive and keep working)
  • Resource investment (the ability to access investment)
  • Market size (the ability to increase the market size in the short-term by bringing more people in and/or increasing the number of sales per customer)
  • Space/local opportunity (the ability to access or repurpose space for artistic/creative purposes)

Doubtless there are other pressure points but this will do for the purposes of a pre-budget conversation.

Artist Longevity and Resilience

Artists have always been in the vanguard of precarious work. There are no jobs for artists in the now outdated sense of full-time employment that this government thinks about. Artists survive by patronage, sales, short-term contracts, commissions, and royalties. They work whether they are “employed” or not. So lets accept that they move in and out of phases of earning for most of their lives and lets employ them as public servants…..WHAT! How would that even work! The first step is the barrier to access (we don’t want everybody claiming to be an artist!). At present it looks like the average annual earnings for artists across all disciplines is €12,000. So, if a practitioner can prove that they earned €12k each year for the past three years then the Artists Employment Fund (lets call it that for the moment) will employ them on a base salary of €37,000 per year for a three-year (renewable) contract.  How would we fund that! Well we transfer all the social welfare benefits they would be entitled to into the fund. Then we tax their first €12,000 at 100% (so they’re essentially paying into the fund, and getting it back). Should they earn in excess of €12,000 then we find an equitable way to tax that (the Swedes have a good model), and we claim a small percentage of their royalties.  It is possible under some conditions for the fund to be in continual profit – meaning it does not carry any additional cost to the state.  (A similar scheme works well in Sweden, and Dr. Niamh NicGabhann, Dr. Stephen Kinsella and Dr. Annemarie Ryan  of University of Limerick have produced interesting research on this).   Without getting stuck into the details the outcome is that suddenly you have a bunch of artists with the stability of a real income and all that does for career confidence, security and mental health, not to mention productivity and value to the economy and the exchequer.  (Given that all jobs are now becoming precarious this could prove to be an invaluable model for wider application). But what are we employing them to do?! They’re being employed to do exactly what they do at the moment – create art.

Artists Copyright and Royalties. This one always raises a laugh. As a client recently remarked, you can tell where somebody is on the political spectrum by their attitude to copyright.  So lets just put it in perspective.  According to the International Confederation of Societies of Authors and Composers (CISAC)  €9.2 billion in royalties was collected and distributed to artists in 2016 across five regions from music, audiovisual, literature, dramatic and visual sectors (CISAC Global Collections Report 2017). In the UK alone, British Equity Collection Service (BECS) distributed over £10 million to UK performers for the their work in British Film and TV (BECS Annual Transparency Report 2017). Assuming that there is a relationship between the total value of a sector and the value of royalties collected then at least €32 million annually should be collected and distributed to Irish rights holders. Perhaps it already is but I doubt it (More research is required as they say). So tracking and collecting copyright should be another key action. There’s some really interesting work being done on tracking copyright for visual artists with blockchain by Beatriz Ramos and her Dada platform.

We could also insist that, in keeping with the Government intention to “put creativity at the heart of Government”, every Government Department employ an artist in residence every year. We could also insist that the Government  develop out the Immigrant Investment Programme. At present the programme offers a number of investment opportunities to non EEA citizens seeking residency, including the Endowment option “A minimum Endowment of €500,000 in a project of public benefit in the arts, sports, health, cultural or educational field. The Endowment should be regarded as a philanthropic contribution with a clear public benefit”. The principal could be developed to extend into Foreign Direct Investment so that any company that sets in Ireland is required to support an artist or company every year as a condition of their investment and tax residency.

Resource Investment

So now we have a bunch of secure, employed, and confident artists. The next challenge is that  there will never be enough money in the Arts Council, Local Authority or all the other departmental budgets to support all the work that these secure and motivated artists now want to create. So where will the investment come from.  The obvious model is section 481 film tax relief. Remember that tax relief schemes are designed to not cost the state any money. They are designed to stimulate employment so that the additional PAYE, PRSI, USC and VAT collected offsets the “cost” of the tax relief. At present, according to the Olsberg report, section 481 has a net fiscal impact of just over 1.  Which means that it neither makes nor looses money. So lets design a section 481 for culture (There are suggestions in previous blogs so I won’t go into it here). Now you could do some really fun things with this: you could tie the relief to a place, so that investors need to invest in local initiatives (having the effect of stimulating local economies, attracting artists away from larger metros, and developing local creative industries); you could supercharge the tax relief for low-income investors and so address the class imbalance.

481 for film released nearly €80 million into the film sector in 2017. There’s absolutely no reason why the culture sector couldn’t attract the same.

While there’s still time we need to  engage in the EIF Cultural and Creative Sector Guarantee Facility – a loan underwriting scheme for the arts, culture and creative industries,  (or set up a local one). Either course of action means that banks must be mandated by government to design lending programmes for the arts and culture sector and start to understand how they work. Looking at the effect of the EIF scheme in EU countries of similar size we can speculate that such a scheme would release an additional €50 million into the sector.

Increased market size

One of the risks attached to these tactics is that there may not be a market for this increased production, so we can’t go increasing supply willy nilly without addressing demand.

The obvious long play in this regard is deep and radical curriculum reform so that creative practice and education through the arts becomes a thing rather than a talking point. But that would take a generation to have actual meaningful impact.

However,  according to a Eurobarometer report almost 28% of people in Ireland identified cost as a barrier to heritage sites and cultural activities. Yes there are other barriers to do with class, exclusion, education, elitism, preference – but 28% of people identified cost.  Not hard to believe.

So how do we address this and give that 28% the ability to leap that cost barrier.  Well we could learn from the EU and design a complementary community currency.  The EU have already acknowledged that community currencies are powerful tools in community building, dealing with socio-economic challenges and combating austerity.

So build a community currency for the culture sector that means that people who want to have access to the dance teacher, the music teacher, the arts center, can always afford it; a currency that means that schools can always afford the trip to the theatre. I won’t go into the details here (it’s quite long) but it is possible and similar working models are already in existence . All it requires is a will to do it.

It’s impossible to put a value on this without further research and probably a pilot scheme. We can speculate that the value of the sector would at least double.

Space/local opportunity.

So now we have artists with stable incomes, developing projects and initiatives from private investment, debt finance, and – on occasion – traditional grants on the one hand and an additional 28% of the population with increased purchasing power specifically focused on the arts and culture sector, what’s the last big piece of the puzzle? I would suggest that we need to make space available and the resources to develop that space. This is the one major capital item I would add to the forthcoming budget: allow artists to identify existing, disused properties and re-purpose them as creative spaces in partnership with local communities. We could be talking about creative community centres, incorporating any or all of accommodation, galleries, studios, theatres, creative enterprise centres and so on.

The important thing to note is that it is possible to redesign the failure out of the market,  without increasing  levels of funding through a central source. It does mean that power shifts down the chain towards the local community and the individual artist, and not everybody will be happy with that.

Is the central funding valuable. Yes it is, But by itself it can never address the failures in the market, and it will always result in a fragile system. If the purpose of government action at Budget time is to create resilience and sustainability, then money has to move  in multiple ways, in multiple forms, and from multiple sources, and actions need to be taken that protect and enable the key creators of value.

The ideas outlined here would alleviate poverty in the arts, reduce elitism and exclusion, drive networking, community development and growth in the value of social capital. The ideas would also see – at minimum – an additional  €250 – €300 million investment in the Wider Arts Sector in any given year.

Or we can wait seven years and see if we get to €140 million for the arts council.

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