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Committee for Culture, Arts and Leisure
DCAL’s Draft Budget 2011 - 2015: Spending and Saving Proposals
Response by the Committee for Culture, Arts and Leisure
The Committee considered draft spending and saving proposals in September and October 2010. The Committee was briefed by DCAL officials on 2 September 2010 on a planning scenario, in which savings were broadly speaking, allocated across the Department and its ALB on a pro rata basis. The Committee also took evidence from a number of ALBs and the Northern Ireland Council for Voluntary Action (NICVA) seeking views on how DCAL’s planning scenario would impact on the strategic priorities and work of their respective ALBs. The following ALBs provided written and oral evidence:
The Committee subsequently wrote to all of DCAL’s ALBs seeking their views on the Draft Budget 2011-2015: Spending and Saving Proposals within the Department of Culture, Arts and Leisure. The submissions, from all nine ALBs were considered on 13 January 2011. The Committee was also briefed by DCAL officials on 13 January 2011.
The Savings Plans were subsequently published on the DCAL website on Friday 14 January 2011 and considered by Members at the Committee meeting on 20 January 2011.
The Committee also took evidence on 20 January 2011 from the Northern Ireland Theatre Association (NITA) with regard to the impact of the proposed cuts to their members and from ICTU Northern Ireland Office in respect of the proposed cuts to the arts budget.
1. Summary of Key Findings
The Committee notes that the draft Budget provides DCAL with current expenditure baselines of £112.5m/£113m/£110.om/103.0m. However this includes Invest to Save of £1m/£7m/£5m in years 1, 2 and 3, which will be transferred to capital in due course. Therefore the real savings that DCAL state they must make are £1.8m/£7.1m/£8.3m/£10.3m.
The current expenditure baseline falls by 9% by 2014/15 and in real terms, i.e. taking account of anticipated levels of inflation, by almost 18%.
The Committee notes that the proposed allocations for capital investment over the four years amounts to a capital allocation of £141.72m but that this represents a small proportion of the Executive’s overall capital budget. DCAL officials informed the Committee that major projects with capital commitments such as the 50m pool and the Metropolitan Arts Centre (MAC) are scheduled to be completed. The project of developing regional stadiums has been granted capital security and work can now proceed. Certain library projects already underway will be completed including the roll out of the electronic libraries for Northern Ireland operating system (ELFNI) and the refurbishment of four mobile libraries.
The Committee was informed that restrictions on the capital budget will mean that the 2012 Elite Facilities Programme (with the exception of the 50m pool) will not go ahead. The refurbishment of Belfast Central Library with the NI regional library will also not be completed and museum projects in Omagh and Cultra will not go ahead.
DCAL officials informed the Committee that the draft budget proposes a new allocation for current spend which includes an additional £24m towards the Department’s bids. DCAL states that this additional allocation has made it possible to provide some measure of protection for payroll heavy ALBs such as libraries and museums. It is also a part contribution to some of DCAL’s bids including the World Policy and Fire Games.
DCAL explained that allocations have been informed first by the Minister’s priorities, secondly, the extent to which programmes could be reduced and ramped up again in the future and thirdly, the existence of what DCAL regard as inescapable pressures around pay and costs.
The following sections will analyse the impact of the proposed cuts on DCAL and its ALBs. This analysis is based on written and oral evidence received by the Committee.
DCAL accounts for 20% of the DCAL expenditure. The remaining 80% is allocated to its arms length bodies. DCAL anticipates losing 6.6% of its budget over the four years. This is in addition to 5% cuts year-on-year in administration (over the current CSR). The reduction to current expenditure over the four years is 4.19% or 9.92% in real terms.
The department has stated that it has experienced a reduction in the number of staff over the past three years and a further reduction is expected through natural wastage or through redeployment to the Northern Ireland Civil Service.
The Savings plan for the Department states that it will accrue savings of £3.72m from its saving measures. It will seek to minimise the impact on the services to the public by focusing its efficiencies on administrative areas and protecting frontline services delivered by PRONI and Fisheries (294 FTE of which more than half are in PRONI and Fisheries). The Department has embarked on an organisational review to align its priorities and identify opportunities to achieve further efficiencies.
The budget for Sport NI will be reduced by approximately 7% which equates to 12.64% in real terms. The draft resource requirement over the 4 years represents 28% of the resource requirement for implementing the Northern Ireland Strategy for Sport and Physical Recreation 2009-19 (hereafter Sport Matters). The draft SNI capital budget is £133m (including £110, for three stadiums). As previously noted, there is insufficient capital to meet the other major facilities bid for 5 of the 6 elite facilities to go ahead. Funding for the 50m pool will be met from the proposed capital budget.
DCAL has proposed that lottery funding will assist Sport NI in a number of projects due to the expected increase in the Lottery funds. Those funds allocated to London 2012 will be redirected following 2012.
2.3 Arts and the Creative Sector
The Arts Council for Northern Ireland (ACNI) will lose 7.7% over the four years of the Budget from their baseline. This equates to 13.43% in real terms. ACNI argue that this is a 30% reduction of the DCAL baseline and is therefore disproportionate.
DCAL has stated that Lottery funding will provide some relief over the four years. However it is understood that the overall drop will lead to a reduction in the number of funded programmes despite this potential source of funding.
ACNI has predicted that cuts will inevitably hit frontline services which will result in job losses (circa 100 jobs), closure of organisations and a reduction in performances, among other things. ACNI is concerned that DCAL is relying on lottery funds to compensate for the reductions. It points out that it is a breachof lottery directions to substitute lottery funds for core running costs of organisations. Comparatively ACNI states that it is being asked to take a disproportionate cut in funding when compared to other regions such as Scotland and the Republic of Ireland.
In terms of capital, ACNI states that despite the slight increase in year 1 for the Lyric and the MAC, there are insufficient resources to fund this level of capital investment.
NI Screen will lose approximately 9.4% from its baseline by 2014-15 which equates to 15.08% in real terms. This will impact on whole activities, particularly with regard to outreach programmes. The reductions will also impact negatively on the international reputation of the local film industry.
Libraries NI will lose 2.46% from its baseline across the four years or 9.92% in real terms. Libraries NI have stated it will have to find savings of £13.61m over the 4 year period (this takes account of inflationary pressures).
Libraries NI has indicated that the cuts will inevitably lead to the closure of around 10 libraries over the four year period (subject to a strategic review), a 15% to 20% reduction in opening times and the purchase of book stock will be greatly affected.
The savings plans estimates that there will be no compulsory redundancies as a result of closures as staff will be transferred to busier libraries. It also states that the EQIA is likely to identify impacts in respect of some libraries, e.g. usage by elderly and disabled people; a greater impact on areas of high levels of social deprivation and rural isolation. It will impact on good relations as a result of removing the some libraries as neutral venues in the community. It is hoped that a mitigating measure will be the provision of mobile libraries.
National Museums Northern Ireland has stated that the reduction in funding will have a major impact on staffing levels of around 25% - from 310 FTE to 234 and opening hours. It will also impact negatively in its ability to operate as a strategic partner in tourism and learning in Northern Ireland. The low level of capital allocation will mean that the Council will not be able to proceed with much needed investment programmes at the Ulster American Folk Park and the Ulster Folk and Transport Museum.
Northern Ireland Museums Council’s current expenditure baseline will reduce by 5.18% or 10.91% in real terms. The proposals for meeting these reductions include: a reduction in staff hours; a reduction in the amount of grant assistance to be provided to museums; the abolition of proactive programmes and developing income generating schemes. It lists a number of Section 75 groups that will be impacted negatively on the grounds of age, race and persons with or without a disability. The reductions will also impact on individuals or groups or areas suffering from social disadvantage. Finally reduction on grants to local museums will have a direct adverse impact in these areas. The Council intends to use its reserves to mitigate against the budget cuts.
2.6 North/South Bodies
The budget of N/S Bodies requires agreement with the Department of Community, Equality and Gaeltacht Affairs. The department’s proposal will reflect a drop of 15% over the four years. In 2014-15 it will be down by around 9% from 2011.
2.7 Armagh Observatory and Armagh Planetarium
The department has spared these organisations from any major cuts due to their size. However both organisations have informed the Committee, that even relatively small cuts will impact on the maintenance of equipment which is critical to the operations of both organisations. It will also impact on education programmes.
The following section details the Committee’s consideration of the draft Budget based on the evidence detailed above.
2. Committee Response to the key issues raised in relation to the Draft DCAL Budget 2011-2015
The Committee is of the view that that public spending on culture, arts and leisure equates to the under-spend of other government departments. Any savings from cuts to this area will make a negligible difference to the overall NI budget but will have a disproportionate effect on creative industries, job creation, sports, culture and tourism.
3.1 Draft Capital allocations
The Committee has serious concerns about the proposed reduction to the capital budget and would urge for a greater degree of innovation and creative thinking in the delivery of capital projects by the Executive.
The Committee notes that the department has secured £142million of capital over the four years and acknowledges that this represents a small proportion of the Executive’s overall capital budget. However, the Committee welcomes the capital commitments to major capital projects such as Metropolitan Arts Centre (MAC) and the roll out of the electronic libraries for Northern Ireland operating system (ELFNI).
In relation to the MAC project, the ACNI has stated that there will be insufficient resource to complete the MAC project, after year one. In view of this concern, the Committee calls for assurances that the revenue consequences of capital bids have been fully considered and that capital bids are sustainable.
3.2 Front Line Services
The Committee notes the impact the proposed savings will have on jobs within DCAL and its sponsored bodies. The Committee urges that full consideration is given to protecting frontline jobs that have the potential to create further employment in the culture, arts and leisure sector. This should take account of potential savings that could be made in management and administrative functions within DCAL and its ALBs.
The Committee notes that 20% of the DCAL budget is attributed to DCAL departmental administration and covers the cost of administering ALBs. The Committee notes that departmental administration of the Arts business area (7.01%) and Sports (11.61%) is relatively higher than other business areas within DCAL. Given that SportNI and ACNI are facing higher cuts than other business areas, the Committee would request that the current expenditure allocations are revisited to ensure a fair and equitable allocation across all business areas.
3.3 The Arts and the Creative Sector
The Committee had previously expressed concerned over the impact of budget cuts on the creative industries sector. The Committee welcomes the draft allocation to the Arts of a further investment of £4m in creative industries.
However, overall, the Committee regards the cuts to the Arts as disproportionate and a retrograde step to the local economy. Any proposed cuts should be fair and proportionate to the cut in the overall block grant to NI.
Investment in arts and cultural activities can stimulate economic growth. The Committee is concerned that the level of cuts proposed for the arts will diminish the contribution that the creative industries can make to the economy and the impact this will have on community arts project. For example, Audiences NI reported that despite the recession, the number of households attending an arts event rose by 7% in 2009 which generated £16m.
The Committee is also concerned that substantial cuts to the arts sector will result in it becoming a ‘no go’ area for new talent. Some critiques have referred to a ‘tipping point’ in funding reductions, beyond which irreparable and long-term damage will be done to the culture and arts infrastructure.
The Committee concurs with the view expressed by ICTU that the Arts and Creative Industry is a high tech, highly skilled industry with added value that generates £582 million annually to the NI economy. It also employs some 33,000 people. Furthermore the benefits of investment in the arts is felt across society, with 56% of ACNI’s main grant programmes being made within the most deprived areas of NI.
The Committee notes with concern that Northern Ireland still has the lowest arts spend per capita in UK, when compared to other parts of the UK and faces a larger proportion of cuts to its budget.
The Committee is of the view that public funding is essential to the survival of the arts; the pool of businesses here that could provide sponsorship is small and private investment is in decline. The Committee concurs with the view expressed by Northern Ireland Theatre Association (NITA) that “Cuts in public will undoubtedly hamper the possibility for Arts sponsorship”.
The Committee notes that DCAL intends to use Lottery funding to provide some relief over the four years in the arts and sport. The Committee is concerned that the Lottery should not be used as a substitution, given that Treasury rules prohibit the use of Lottery funds for core funding of organisations. The Committee notes that these concerns are shared by ACNI and NITA.
The Committee notes that ACNI and government have invested heavily in providing a dedicated arts facility within 20 miles of every person in NI. The Committee concurs with the view expressed by ICTU that these facilities enhance the cultural tourism offering and act as powerful symbols of regeneration of our towns and cities. To capitalise on this investment, adequate funding should be made available for running and programming costs.
The Committee is concerned that NI Screen will lose approximately 9.4% from its current expenditure baseline by 2014. This equates to 15.8% in real terms and represents a disproportionate cut to a relatively small budget of just over £1m per annum. The Committee is concerned that the proposed cuts will result in the cessation of funding for whole activities which will impact considerably on third party organisations. NI Screen has indicated that a number of small organisations and projects will cease which will potentially result in job losses. Furthermore the complete loss of the UK Film Council funding in 10/11(£200k) means that the overall cuts will be very severely front loaded. The planned reductions, effecting regional/outreach work, are likely to have a negative impact on reaching rural communities.
The Committee is also extremely concerned at the long term damage the cuts will have on the international reputation of the local film industry which was beginning to flourish and bring substantial spin-off opportunities to local businesses involved in set production and the wider film industry. In view of this the Committee calls for serious consideration to revising the proposed reductions to NI Screen’s current expenditure baseline.
The Committee acknowledges that the public library service, through its emphasis on reading and literacy, learning, information, heritage and culture, contributes not only to specific DCAL PSA targets, but to the wider Programme for Government, including Education, Health and Social Inclusion.
The Committee acknowledges that Libraries NI has already delivered significant efficiencies since its establishment on 1 April 2009 (£600k in year 1 and £1.8 million this year). The Committee also notes that the size of the budget cuts currently being projected will result in significant reductions in front-line services and potentially necessitate the closure of viable and well-used libraries. The Committee is extremely concerned that it will make it more difficult to provide an equitable service across Northern Ireland, particularly in rural areas.
The Committee notes that libraries are recognised as neutral venues and play a key role in promoting equality, diversity, social inclusion and a shared future. Furthermore they are often targeted at sections of the community who are socially disadvantaged. The Committee urges that Phase 2 and Phase 3 of the Strategic Review of Libraries is regarded within this context and that resources and services are prioritised, within this review, to enable libraries to continue to support this important role. It is also critical that sufficient resources are in place to effectively carry out this review in a fair and equitable manner.
The Committee continues to acknowledge the important role museums play in terms of promoting cultural tourism, supporting tolerance and social inclusion. The Committee is of the view that museums should be afforded some protection to mitigate against the effect that deep cuts will have on our cultural heritage.
Cultural tourism is growing at a faster rate than any other tourism sector. For example, in 2009 39% of tourists attended a cultural event. The Committee therefore urges the Minister and the Executive to take a more joined-up approach to supporting and resourcing cultural tourism.
3.6 Participation in physical activity and sport
The Committee welcomes the draft Sport NI capital budget of £133m which will enable important projects such as the 50 metre pool and regional stadium development to progress. This is good news for Sport and the Committee acknowledges the long term benefits this will bring to the development of sport in this region.
The Committee expressed its support for DCAL’s bid to support the World, Police and Fire Games, the largest of its kind in the world. This major event represents an enormous opportunity in terms of boosting the local economy and promoting Northern Ireland on the world stage. The Committee therefore welcomes the proposed allocation in support of this bid.
The Committee took evidence from Sport NI (September 2010) on how the proposed cuts would affect its ability to deliver key projects and programmes on the ground. The Committee expressed concerned that if the cuts to Sport NI’s budget were realised, opportunities for young people and adults to participate in sport and physical activity would be lessened. The Committee continues to be concerned that the proposed reduction to the Sport NI budget will negatively impact on people living in socially deprived areas in terms of their ability to pursue sport and physical activity, which is key to improving health and well being.
The Committee is concerned that Sport NI’s ability to implement the Northern Ireland Strategy and Recreation 2009-19 (Sport Matters) will be severely hampered by the shortfall of £81m to implement the strategy. The Committee welcomes efforts by DCAL and Sport NI to develop mechanisms to secure and buy in the commitment of key partners and stakeholders in an attempt to address this funding shortfall.
In relation to the Special Olympics Ulster (SOU), the Committee welcomes and supports the Minister’s efforts to resolve the funding issues of SOU.
The Committee calls for a full EQIA to be undertaken on the DCAL draft Budget for 2011-2015. Through the savings plans DCAL’s ALBs have referred to the potential negative impact the cuts will have on Section 75 groups For example, it is anticipated that closures in the museum and libraries sector will impact on the elderly and disabled people and will impact negatively on people living in areas of high levels of social deprivation and rural isolation. In the case of libraries, it is understood that the loss of libraries will also impact on good relations as libraries are regarded as neutral venues in the community.