the cultural well being of the creative industries

Margaret Hodge’s speech to the Arts and Philanthropy City Breakfast
20 February 2008

Thanks to the Corporation for addressing this hugely important issue.

Much of London’s greatness stems from its enormously rich cultural infrastructure. Those of us that our Londoners are both privileged and truly lucky to live in a place where there is such a range of truly excellent institutions offering such a wide variety of artistic and cultural experiences.

Indeed we all know in this room that the cultural ecology of the Capital does not only enhance and enrich our individual lives but helps to promote the Capital as a place where people choose to come and live and work, thus contributing to the economic prosperity of which we are so proud.

So ensuring continuing world standards in our cultural institutions is not just vital to raise our spirits and transform our lives but also important if London is to maintain its competitive edge in the increasingly competitive global environment.

That symbiosis of corporate and cultural excellence is one of the things that makes Britain, and London in particular, so great.
And from the work I am doing on the creative industries – which are contributing more and more to GVA, growing at double the rate of other sectors of the economy, – we know that success in the creative industries often springs from excellence in culture and the arts.

So the arts and culture matter. They matter because of their intrinsic value and they matter because of their contribution to the well-being of our communities and our economy.
It is because we recognise the importance of the Arts that we have so substantially increased our public investment from the taxpayer in the Arts.

Over the last decade there has been a 73% real terms increase in the investment in the Arts in Britain.

And even in this current very tight spending environment ministers at DCMS have secured a real terms increase in investment, yet again, in the Arts whilst many other areas of public expenditure are facing financial cuts.

I am delighted, that this, for example, has enabled the Arts Council for the first time to provide some funding for the Barbican, to complement, I hope – not substitute – the very generous funding the Barbican receives from the City Corporation.


And the Treasury are trying to respond and to provide reassurance and clarification on their proposals for amending the tax arrangements for non domiciles to ensure that it will continue to be possible to bring art works into the UK without incurring a charge to tax.
It is however important to recognise that reliance on public subsidy alone won’t secure the long-term health of our arts infrastructure.

And whilst there are an enormous number of exemplars of generous giving by private philanthropists (John Studynski who is sharing the platform is just one) there are some worrying statistics which convince me that we do need a real step change in private giving to the Arts if we are to ensure over time our international pre-eminent place as a centre of artistic and cultural excellence.
I am not saying this because I am predicting future cuts in public spending on the Arts. But the global nature of taxation means that dramatic increases in public spending are highly unlikely and indeed whatever the level of public funding we commit to the Arts, by itself it will never be enough to maintain our position as an international leader in culture.

So a mixed economy in arts funding is the best way to secure long-term sustainability in the Arts.

Furthermore it is my view that a culture of dependency on public funding actually inhibits arts institutions from taking the risks which are so important if we are to maintain a vibrant, relevant and inspirational cultural offer.

And actually it’s not just the money that individuals can bring to the table, it’s their time, their expertise and their experience which can do so much to enhance the quality of the artistic offer of many of our cultural institutions. A diverse group of people with varying backgrounds and experience can, by working together in an institution, massively add value to and enhance the offer to the public from our major arts bodies.

So I do want to see a step change in private giving to culture and I believe the City is well-placed to spearhead such a change.
The City has a long tradition of charitable support, from the earliest Guild to the continuing good work supported by the livery companies today.

And increasingly companies choose to demonstrate their corporate social responsibility through charitable giving.
But the statistics suggest we can and we should do more. In the field of private giving we fall way behind the USA, where charitable giving is nearly 1.7% of GDP whilst in the UK it is under 0.75% of GDP. The Americans give twice as much as we do and although we don’t want to go down their road of minimal public investment in the Arts we do want to learn from them as to how we can create a culture where private giving – by both the wealthy and the less well off, the multi-national companies and the SMEs, by women and men, is not seen as an exception but is seen as a normal part of our everyday lives.


And let me share another statistic with you. In the last 5 years, the City’s share of the national wealth has doubled. Just imagine what that could have meant for the ecology of the Arts if the City’s contribution to our cultural heritage had also doubled.
But in fact the figures for corporate giving have remained pretty static so the actual value, measured in terms of the proportion of the pot of corporate monies available, has halved in the last five years.
A change in culture is required and that demands a change in approach by all the key partners, the Government, the arts institutions, the corporations and individuals.

For our part, we have to reflect on the taxation regime to ensure not only that we have no unintended consequences from our tax proposals, but also that despite the tight fiscal constraints we provide an environment which encourages a culture of giving.
We have already introduced substantial incentives, from Gift Aid relief to the Acceptance in Lieu scheme, but I am conscious that there are other recommendations in Nicholas Goodison’s thorough review that have yet to be addressed. There is never a good time for doing this, but we need to give it a try.

But my view from talking to a range of private donors is that it’s recognition and acknowledgement of their contribution which matters as much, if not more than further tax concessions.
And we are bad in Britain at being generous with our thank yous. Our instinctive coyness makes us reluctant to express gratitude and appreciation, and recognition. And we need to change that.


But we also need to change and to transform the culture of our institutions so that they do not see themselves as charitable institutions totally dependent on public funding, and that they develop the entrepreneurial skills to attract the diversity of funding which will bring them longer term security and will ensure greater artistic freedom.

And finally we need to transform our attitudes as individuals or as members of corporations or companies, both to philanthropic giving in general and giving to the Arts in particular. At present only just over 4% of total charitable giving finds its way into our cultural institutions and we have a long way to go to match American citizens in their philanthropic contributions to society.

That in part is about developing a culture where those who have done well in life through their own efforts and supported by the society in which they live, see it as a given and a benefit to put something back into their community and to support those public institutions which they feel passionately about.
And giving to the arts needs to be accepted for what it is – not as an investment which will only bring benefit to an elitist few in our society – but a contribution which will enhance the lives of each and everyone of us, which will enrich our communities so that they are better places in which to live and work and which will strengthen our economies and our societies in positive and transformational ways.

I am confident that we can achieve much more if we work together in pursuit of our common purpose. To ensure that we do all we can in partnership to strengthen private giving so that we continue to enjoy the very best cultural heritage in the world.


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