COMMITTEE FOR CULTURE, ARTS AND LEISURE

OFFICIAL REPORT

(Hansard)

Inquiry into the Funding of the Arts in Northern Ireland

5 March 2009

Members present for all or part of the proceedings:
Mr David McNarry (Deputy Chairperson)
Mr Dominic Bradley
Lord Browne
Mr Kieran McCarthy
Mr Raymond McCartney
Mr Nelson McCausland
Mr Pat Ramsey
Mr Ken Robinson
Mr Jim Shannon

Witnesses:
Mr Philip McDonagh ) PricewaterhouseCoopers
Ms Anne Tohill )
Ms Michelle Scott ) Department of Culture, Arts and Leisure
Dr Michael Willis )

The Deputy Chairperson (Mr McNarry):

I invite Research and Library Services to brief members on the research papers.

The Committee Researcher:

This presentation provides information on the potential economic benefits that arise from sport, arts, museums and libraries in the United Kingdom. Reference is made to the ability to financially quantify the benefits of expenditure on such activities. I will focus on the abandonment of phase 2 of the PricewaterhouseCoopers study of the social and economic value of culture, arts and leisure in Northern Ireland (ValCAL). I will make reference to producing potential quantifiable benefits of Department of Culture, Arts and Leisure (DCAL) activities.

The ‘Valuing Museums’ report estimated that the full economic impact of the museums and galleries sector was between £1·83 billion and £2·07 billion. The report also estimated that approximately £320 million a year was spent in the UK by overseas visitors on museums and gallery visits. According to research carried out by the Association of Leading Visitor Attractions, seven out of 10 top visitor attractions in the UK are national museums. There are over 42 million visits each year to major museums and galleries in Britain, with 43% of the population having attended a museum or gallery at least once in the past year.

The self-generated income of museums and galleries in Britain can be as high as £200 million a year, including over £100 million in donations and sponsorship, over £100 million in trading income, and some £20 million in ticket sales. For every £1 of public funding that is received by the British Library, £4·40 is generated for the UK economy: if the British Library did not operate, the UK economy would lose some £280 million a year.

Sport-related economic activity increased between 1985 and 2000, representing a financial increase from £3·35 million to £10·373 million. The amount of sport-related economic activity increased again in 2005, to £15·471 million. Employment in sport increased by 19% between 2000 and 2005. Sport-related employment in England was estimated at 434,000 in 2005, accounting for 1·8% of all employment. Customer expenditure in sports in England was £16·58 million in 2005, an increase from £3·538 million in 1985, representing a per capita spend of 0·03p.

Impacts such as community cohesion, education, reduction in crime and social inclusion are complicated to quantify. The difficulty with these impacts is their nebulous nature. With many of these impacts, the benefits cannot be measured initially or in financial terms. Any benefits derived are more likely to be seen at a local and community level, rather than providing an overarching regional benefit. It is more appropriate to provide benefit ratios for types of projects and initiatives, but it is not appropriate to estimate the benefit ratio of funding at the individual community and regional levels. The data is either not available or does not lend itself to analysis at those levels.

Phase 2 of the PricewaterhouseCoopers (PWC) study of the social and economic value of culture, arts and leisure in Northern Ireland was to produce an economic model from available data on DCAL activities, expressed in monetary terms. However, the project steering group rejected the proposal to progress this phase of the project, mainly because of concerns about data availability and the complex nature of intervention in the arts and sports business areas.

The nebulous nature of social benefits makes the construction of any economic model rely heavily on assumptions, resulting in the robustness of the model itself being undermined. The purpose of phase 2 was to design an economic model to quantify the net direct and indirect social and economic impacts for each DCAL business area. The economic model was also to consider whether synergies between DCAL business areas were present, and how that could impact on the model.

The requirement of the economic model was that it be robust and capable of being expressed in monetary terms. The project steering group decided to abandon phase 2, concluding that it would not represent value for money, given that work to develop the economic models alone would have cost DCAL at least a further £61,905, with no guarantee of a robust output. The model would have been open to criticism and challenge.

Economic impact analysis is concerned with identifying and measuring the changes that occur, or would be likely to occur, in an economy as a direct or indirect result of a new public and private initiative. Indirect costs and benefits can prove more difficult to evaluate, particularly if they have no market price. A cost-benefit analysis attempts to determine the value of an activity to society as a whole. That economic methodology sees the social value of an activity as based on individual valuations of that activity, with a focus on economic efficiency.

The criticisms of cost-benefit analysis are concerned with identifying appropriate measures of the costs and benefits associated with an activity in situations where market prices do not provide a reliable guide. The following issues must be considered: market prices not reflecting social costs and benefits; public activities themselves affecting market prices; outputs from an activity not being sold in markets, so that prices are unavailable; substantial public goods or externalities being associated with the activity. When valuing non-market impacts, the green book indicates that an alternative approach to valuation is required in order to quantify potential social, health or environmental impacts.

Key considerations that may impact on a decision to commission a piece of research would include: whether the research is likely to produce a robust valuation; the range of application of results of a study to future appraisals; how much the accuracy of the valuation impacts on any decision-making process; and the scale of the impact of that decision. A decision, therefore, must be taken in relation to the allocation of resources to ensure that valuations of non-market benefits and costs are accurate.

The Deputy Chairperson:

Thank you very much. That was a comprehensive and competent presentation, as usual.

Mr McCarthy:

At the start of your presentation, you mentioned sponsorship of museums and galleries. Can you go over that again? I recall a previous meeting when we talked about the lack of sponsorship.

The Committee Researcher:

That point relates to self-generated income. The report that I mentioned is based solely on the experience in Britain.

Mr McCarthy:

By Britain, do you mean across the water — England, Scotland and Wales?

The Committee Researcher:

Yes. They have worked out how much self-generated income that sector provides. That self-generated income of £200 million a year includes £100 million in donations and sponsorship that the sector attracts for itself. In other words, the sector is producing that for itself, for its own financial gain.

Mr Shannon:

I am sorry that I was not here earlier, but I have read the notes, so I have a wee bit of background.

The Deputy Chairperson:

You are bluffing, then?

Mr Shannon:

That is your terminology, but it is certainly not mine. I always do my homework before meetings.

Is it wise to place so much emphasis on private sponsorship? Formula one racing is a supreme example of where you might think some finance would be available. Is it wise to place so much emphasis on that in the report, especially at a time when people in big companies are watching their pennies, or rather their millions. The reality is that some people who might want to be private sponsors may be thinking that this is not a good time for them to do so. In other words, if someone has budgeted for it and they are trying to achieve something, but it may not be guaranteed or it may not happen, I just wonder whether we are wise to do it.

The Committee Researcher:

The figures that I produced were sourced from a report that was produced around 2005, before the economic slump. Therefore, those are figures and ways forward that were thought of at that time. In light of what has happened in the economic sector, an overemphasis on private sponsorship might not be one of the best ways forward, but it is still an element that must be included in trying to stimulate some kind of outcome.

Mr Shannon:

I accept that some people will continue to sponsor events. Many people have asked whether they have got the maximum out of private sponsorship. I do not think that that will be possible at the moment, so it is important not to place too much emphasis on it.

Mr P Ramsey:

You are very welcome, and the report is very good. Presumably, the ValCAL study commenced with the best of intentions, but, looking at it now, there are four distinct areas. How was someone going to collate the information on those areas to build a model on the way forward? Was the data pulled together solely within the confines of Northern Ireland? Public expenditure on the arts in Dublin, for example, is twice that of Northern Ireland. Where is the qualitative evidence that was used to convince the Irish Government to invest in the arts? Was it the social impact? Was it regeneration? Was it the economic impact?

I do not see that being done with any purpose in the ValCAL study. I sense that they were all over the place, because they supported libraries and the arts. If the focus was purely on the arts, can we ascertain what qualitative evidence would be necessary to convince our Executive that there is a good rationale behind it — that is, it is in the interests of people’s health and the economy? That is the bottom line of what we are trying to achieve. We are meeting the representatives who were progressing ValCAL, but did you get any statistical evidence from other areas regarding the rationale behind increasing funding?

The Committee Researcher:

ValCAL is a Northern Ireland study. It looks at DCAL’s investments for Northern Ireland — how much money is going in, and what benefits are associated with that. The reasons for investing go back to trying to model the social impact. The regional spend on the arts here is lower than in other UK regions. It is difficult to model in an overarching regional way — you have to see the benefit at community level, right down to individual level. Therefore, the value that is attached to that will put it up the agenda in terms of spend. You see the benefit of spend at an individual level and, therefore, there nearly has to be an individual rationale for the spend.

With regard to ValCAL, the problem arises when one tries to put all the different sectors that DCAL manages into an economic model. If they are all put together, there is no point in having a model that would be very expensive to generate if it is not robust at the end of the process. Such a model could not be used to justify an increase in spend. Therefore, the process that you had gone through would be a waste of time and money at that point.

The focus seems to be on all the sectors. From my reading, I think that libraries are slightly different from the arts, museums and galleries, because the data for libraries is more robust for economic modelling. There are different factors — you can rate the participation of people who come in and use that service. However, consider trying to evaluate the health benefits of sport. How would you rate a person’s participation in a sport and whether his or her participation is active or passive? Those are the difficulties in trying to evaluate the economic benefits. That is how tangled up the process can become.

Mr P Ramsey:

That is my point. There is no commonality between the areas. You cannot look at the true value of the exercise, because the fours areas are distinctly different.

Mr K Robinson:

Thank you for your excellent paper. Pat has touched on some of the ideas that I also wanted to raise. We are looking at the sectors in a disparate way, and yet there is a lot of linkage between them. You mentioned libraries. The way in which a library is used here is very different from the way in which a library is used in a city such as Dublin or London. In London, a person might go to the library and then build that into a series of events — they might go the theatre, a football match, or an art exhibition in the Tate. Is there any way in which we can draw those strands together by coming at it from a slightly different angle?

We are trying to generate jobs and money for the economy here. Take the hypothetical visitor to Northern Ireland. You said that 2% of employment in Canada and England is supported by this. We are trying to employ 2% of our population similarly. What do visitors arriving on our shores, either by air or sea, come to see? What cultural activities are they likely to involve themselves in? They may go to a soccer game, a rugby game, or a Gaelic match. They will want to go to the theatre. They may or may not want to go to a library. The Public Record Office is relocating to the centre of Belfast. Can we build these types of factors into the model too? We are looking at the issue of employment and involvement in the arts, but we are not looking at it in a silo.

If my wife and I go to London, I want to see a show. On a Saturdy, I go to a football match, and she, unfortunately, goes shopping. Perhaps we would also go to another area of London to look at the architecture, or to visit a museum or a library. How can we pull those packages out of the silos and put them together? Northern Ireland needs something that visitors can use that will generate money for our economy by their being selective in their use of it. Is there some way in which we can pull those points together?

The Committee Researcher:

Putting it all together, that seems to be the reason why — [Interruption.]

As you said, there are close linkages and synergies between tourism and different aspects of DCAL. For example, top visitor attractions such as museums and galleries have a spin-off effect and attract people into the other areas that you identified.

Constructing an economic model on something that does not have a market value makes it difficult to get the rationale for spend. Linking those areas with tourism might be a better way in which to get an economic angle. It could help to show how the money can be spread out and how one DCAL investment could have a ripple effect on other areas.

Mr K Robinson:

If a person comes here, they need to be fed and watered, they need accommodation, and they need transport to get to different locations. All of those processes generate incomes, although we could not tie them in and say that they are artistic exploits. However, they are necessary parts of the infrastructure that allow visitors to engage with various sectors such as sport and the arts.

The Committee Researcher:

Those sectors — the arts and museums — are the headline attractions.

Mr K Robinson:

They are the magnets.

The Committee Researcher:

They are the magnets. The rationale for investing in those areas is that they will generate better rail links or infrastructure. Perhaps that is the rationale for having those: to try and draw more people in, especially now, at this time of economic difficulty.

Mr K Robinson:

I was listening to the radio on my way here this morning, and I heard that this morning’s flight from Munich was delayed. Why do people go to Munich? The beer festival is the obvious attraction, but there are other artistic experiences. Anyone who is attracted to that location will experience a wide range of Germanic activities.

Turning that around, there may have been people on that plane this morning who were coming to visit Northern Ireland. Other than arriving here and having a pint of Guinness, what are we going to provide, what do we currently provide, or what should we provide for them? Can we provide other experiences for them? What can be done to generate the economy and, in turn, plough money back into artistic and sporting areas?

The Deputy Chairperson:

That is a valid point that you are making.

Mr K Robinson:

That is the gospel according to Ken. There are other views, but we are missing an opportunity if we consider the arts totally in isolation.

The Deputy Chairperson:

Perhaps if you went shopping with your wife more often, Ken, you might not spend so much time alone.

Mr K Robinson:

There is something called plastic, but I do not have the hang of that yet.

Mr McCartney:

You mentioned sport-related economic activity. What does that cover? Is that from professional sportspeople right down to TV people?

The Committee Researcher:

Sport-related economic activity covers every aspect of sport, right down to retail. It includes the selling of items, the purchase of tickets, going to matches and the spend that occurs there. It also includes the professional sector.

Mr McCartney:

That area accounts for 1·8% of all employment in England, but what are the figures for Scotland, Wales, here in the North, and down South? Is that data available?

The Committee Researcher:

I can go and —

Mr McCartney:

The actual sum of money seems to be very high in relation to the number of people who are employed. I am just wondering what the impact is of professional sport —

The Deputy Chairperson:

Do you like those figures, Raymond?

Mr McCartney:

Yes. In England, professional sportspeople are paid more than anywhere else, so it would be interesting to see the comparison.

The Committee Researcher:

The figure is slightly at odds with the percentage employment because it includes domestic spend, which is people who buy football kits and so on. Sport-related economic activity is any kind of money that is being generated through sport as a whole. I will get those figures.

Mr McCausland:

I have a quick observation about visitors, which is the same theme to which Ken referred. Yesterday, I saw the visitor figures for places in Northern Ireland that should be substantial tourist attractions and should draw tens of thousands of visitors every year. Those places should have a substantial appeal — not just for local people, but particularly for visitors from America — but the visitor figures are a few hundred, perhaps 1,000. The visitor figures for the ancestral homes of American Presidents are appallingly low. Income for arts organisations and cultural sites could be increased by substantially improving marketing.

There is one other issue that I will touch on. Pat spoke about it when he compared the situation here to that in Dublin. In Northern Ireland, do nationalist-controlled or unionist-controlled councils spend more on the arts? Generally, the answer is that nationalist councils spend more. Why is that?

Last week, I raised the point about unionist perceptions and experiences of the arts. That is a concern for me as a unionist, but it should also be a concern for the Arts Council, because the result is that the Arts Council does not receive the investment that it could from some unionist councils. The number of people going to many of the events might increase if it addressed some of those issues.

The Deputy Chairperson:

You have made that point twice. In the development of the Committee’s work, I am sure that Committee members will be comfortable for us to address that issue.

There will now be a joint presentation from PricewaterhouseCoopers and the Department of Culture, Arts and Leisure on the ValCAL study, on which they have been working together.

Ms Anne Tohill (Department of Culture, Arts and Leisure):

I will make the introductions.

The Deputy Chairperson:

Our rules are strict: please take no more than 10 minutes for your presentation. After that, Committee members will ask questions. Please stick to the time limit — I will remind you if you are getting close to it.

Ms Tohill:

I am responsible for the arts and creativity branch of DCAL; Philip McDonagh is the chief economist at PricewaterhouseCoopers and has led research at the company; Dr Michael Willis was the head of research and statistics in DCAL until a week ago, and he is here to represent the central management unit; and Michelle Scott is the head of the economic services unit in DCAL. Thank you for the opportunity to brief the Committee on the reasons for the ValCAL study.

The Deputy Chairperson:

You are very welcome.

Mr Philip McDonagh (PricewaterhouseCoopers):

Thank you for the opportunity to give a presentation.

As Ms Tohill said, I am an economist, but I have always had a particular interest in the economics of the arts. I have worked with a number of arts organisations over the years — indeed, I am a member of one — and worked on arts projects, particularly on business cases and economic appraisals. One of my first jobs in PricewaterhouseCoopers was a business case for what was known at the time as the East Wall cultural complex; it became the Millennium Forum in Derry. I have also worked on the Omagh leisure complex, the Burnavon Arts and Cultural Centre in Cookstown and, most recently, the new Metropolitan Arts Centre in Belfast. I have looked at the economic impact of all of those facilities — [Interruption.]

The Deputy Chairperson:

Can we have a little bit of attention for our speaker?

Mr McDonagh:

As an economist, I have always been interested in the economic impact of the arts — both direct and indirect — as well as the other benefits that arts generally bring to our lives; the economic impact should not be the main issue. I have discovered that studying the economic impact of the arts is a bit like the Holy Grail or ‘The Hitchhiker’s Guide to the Galaxy’ — people always seem to be on an eternal quest for the answer. Sometimes, the journey in getting to the answer is as interesting as the answer itself. The title of the study, ValCAL, always reminds me of Valhalla, the hall of the slain — studies of the economic impact of the arts have left a few bodies along the way.

I realise that members have seen the full study, and the Committee researcher has provided you with a good summary. I will not go over that in any detail. However, I will pick out some key points and, briefly, explain what the study was, what it concluded, why we did not proceed to phase 2, and what we can learn from the experience of doing the study.

It is important to recognise that we did the original study at the time of the 2007 comprehensive spending review. The brief that we got from DCAL at that time was concerned with trying to understand, from the Department’s point of view, the most effective way to spend the resources at its disposal. Should it be putting more money into arts and less into sports, more money into libraries and less into museums? What would give the Department the best bang for its buck?

At the time, there was a real awareness that DCAL competes with other Departments for resources. Those other Departments perhaps find it easier to demonstrate economic impacts — for example, the Departments of Enterprise, Trade and Investment or Employment and Learning can easily pull together direct estimates of the economic impact of their activitiese. In the area that DCAL works in, it is much harder to do that. Some of the proposals stemmed from a desire to compete on a level playing field.

As the Committee researcher said, the study covered the four main areas of spending within the Department: sports, arts, museums and libraries. I will focus on the arts element, as that is the subject of your inquiry. The study was trying to see if there is a model that can demonstrate impact. For example, if the Department puts £X million into a particular project or programme, what jobs, employment and income — what economic measurables — will that produce?

Some people in the arts sector are horrified by that. Naturally, they do not like to see the arts reduced to some sort of economic measurement. Increasingly, however, there are others in the sector who realise that resources are scarce and that the sector is very dependent on public finance. The sector has to demonstrate what it is doing. In the United States, it is recognised that the arts are an economic activity, not just by the public sector and councils, but by the private sector, where a lot of sponsorship goes into the arts.

Most of the work on the ValCAL study was done in 2006 and 2007, so it is now two or three years old. We tried to categorise the impacts according to their different natures. The arts have an economic development impact through direct employment and income. Earlier, members talked about the spend that is associated with people going out for a night to an arts event, or a community arts festival that brings people together, as a result of which people spend more money in the shops.

There is a tourism impact. The arts have the potential to attract visitors to the area, and there is strong evidence that tourists come to Northern Ireland to visit its arts venues and festivals. There is an education impact. The arts contribute to the education sector and therefore, in relation to public spending, save the public purse by adding to the quality of the education system.

There is a health impact as well. Some of the capital projects in Northern Ireland that DCAL and the Arts Council have funded — the Millennium Forum, the Burnavon Arts Centre, the Island Arts Centre in Lisburn, and, hopefully, the Lyric and the new Metropolitan Arts Centre in Belfast — have the potential to contribute to physical regeneration.

The final area of impact is social inclusion and community cohesion, including, potentially, a reduction in crime.

The Deputy Chairperson:

Perhaps you could bring your remarks to a close.

Mr McDonagh:

I will not dwell on every detail of the submission. The Committee has heard already why the study did not proceed to phase 2. A concrete example of measuring the economic benefits of a project can be seen through the work carried out for the new Metropolitan Arts Centre in the Cathedral Quarter in Belfast. We worked on a business case for that, and the main economic benefits that we identified were threefold: the first was the potential employment that the facility created; secondly, the tourism spend generated by having another good arts facility in Belfast, which would encourage more visitors to spend more time and use the facilities and the area around the Cathedral Quarter; and, thirdly, there was the physical regeneration and what it does in levering private-sector investment into the area. Those were the three factors that were put to the Department of Finance and Personnel (DFP) to fund the project.

It is all very well putting those into business cases and economic appraisals. However, it is more important to monitor the situation to see whether that arts centre is delivering the benefits that were promised as regards spend, physical regeneration, and so on. That is what is known in the Department as “post-project evaluation”. That is a much more immediate, positive and constructive task, as opposed to trying to develop a model that will encompass all that in one simple formula.

The Deputy Chairperson:

Do you, or any of your colleagues, wish to add anything before members ask questions?

Dr Michael Willis (Department of Culture, Arts and Leisure):

For clarification, the Department will not be making a separate presentation. Mr McDonagh’s presentation is the sole presentation.

The Deputy Chairperson:

We understand that. I was giving you the opportunity to chip in.

Mr P Ramsey:

During the period when there was a huge campaign from the arts sector for capital spend, particularly at the beginning of the comprehensive spending review, the Committee championed that cause and it thought it was appropriate to conduct an inquiry into the underfunding of the arts. I raised with the researcher the fact that the Department was looking at four distinctly different areas and that that looked to be unwieldy, as there was no commonality between those areas. The language was based on the economic drivers involved. I take the Chairperson’s point; we are all talking about the economy and its importance. However, we are also talking about cultural poverty, targeting social need, social regeneration and the impacts that that will have on communities. The Committee does not want to waste any time over the next few months —

The Deputy Chairperson:

So, you are going to come to a question very quickly.

Mr P Ramsey:

I am trying to.

The Committee does not want to waste any time obtaining the qualitative evidence that is necessary to go forward with the rationale as to why there should be more investment in the arts. What lessons have you learned — not just an economist, but as someone who is a champion of the arts — and what steer could you give us to proceed? If another study was to commence, would it be better to base it solely on the arts, rather than including libraries and sport in it?

Mr McDonagh:

That is a good question. We discovered that there is not a lot of information available about some of the economic impacts that would allow us to build a model. We need to collect some of the information from existing projects. Therefore, when the Arts Council or DCAL fund a programme or project, its organisers should be required to collect certain information. Such information might include the number of people who attended the events; how much they spent; whether they were visitors from outside Northern Ireland; what else they did when they attended the event; whether they went for a drink or a meal before or after the event; and whether they came especially to the venue or whether it was part of an existing visit. That information could be collected from existing events, organisations and programmes, and, with encouragement, they ought to be able to do so.

Ms Tohill:

A series of evaluations have been undertaken. For example, through the creative industries innovation fund, we have recognised the necessity to collect data in order to ensure that it is possible to conduct a meaningful evaluation at the end. We are establishing an evaluation panel and have identified some indicators that we hope to collect later, such as turnover and employment. It is not always easy to obtain that information, because we rely on small organisations to supply it. Some of those organisations might not experience an employment impact, but the Department and the Arts Council carry out regular evaluations of their programmes to ensure that they are quantitative and qualitative in nature.

Mr P Ramsey:

There are a number of areas in which it is difficult to obtain qualitative evidence. For example, it is easier to obtain qualitative facts on sport than on health-related matters. One could argue that there is qualitative evidence in the arts, and hospitals that display art, for example, could detail the effect that such displays have on stimulating patients. Are there models outside Northern Ireland of countries that know how to effectively invest in the arts and secure beneficial outcomes?

Mr McDonagh:

There is much evidence and other good models — the Republic of Ireland was mentioned earlier. That country did not wait to measure the impact. A number of years ago, it had a gut feeling that it was a good idea to invest in that sector and to provide the tax breaks for the artists. That was done almost without any available evidence, but there is evidence in other places. For example, there have been studies in various places on the financial benefits to the Health Service of investing in arts and health. Good data on that matter could be applied here.

Ms Michelle Scott (Department of Culture, Arts and Leisure):

When the Department takes an investment decision on, for example, an economic appraisal, it is not necessary to quantify or monetise a benefit in order to acknowledge it. It can be sufficient to highlight a non-monetary benefit and evidence that an initiative will impact on health and crime outcomes. It is dangerous to discard benefits simply because they cannot be quantified or monetised.

The Deputy Chairperson:

Philip, you said that some people — you did not name them, which is a relief — in the arts circle were horrified to be financially scrutinised. Is that evidence of a culture in the arts circle where some people think that they know better and, instead of asking the public what it wants, they tell the public what it should have?

Mr McDonagh:

That is a good question. Artists, perhaps, feel that the integrity of their work should not be challenged. It is not so much that they —

The Deputy Chairperson:

Does that culture exist among those who are privileged enough to distribute the funding provided by the Department?

Mr McDonagh:

No; I meant that some artists do not like the thought of being judged on the number of seats that they sell in a theatre, the amount of money that they spend and the number of staff that they employ. They do not like their work to be reduced to economic factors. There are fewer people with that opinion than there has been for a long time.

Mr Shannon:

Thank you for your presentation. In the past, the arts has perhaps, been a minority interest, and artists have — as they should be — been encouraged to express themselves. However, someone has to pay for that. Philip has given us a reality check this morning about the economy and how we spend money on the arts. You made the point that if events that we promote can produce a return, those returns can be used to promote the arts more widely.

I want to ask a question about tourism. Our background papers state that the Smithsonian Festival would lead to a 10% increase in US visitors. How did the study arrive at that conclusion? If the Smithsonian Festival can achieve that size of an increase, should we not be putting on more Smithsonian Festivals? How many can we put on, where is the target audience, and can we make that happen?

My second question is about social inclusion. The ValCAL study concluded that as a result of spending on the arts, 47% of the adult population participated in an arts event, which is excellent. The study also concluded that there were high levels of participation by persons with a disability. It is on record that, per capita, Northern Ireland has the highest number of people with a disability in the United Kingdom. Is it possible to increase the involvement in the arts of people with a disability in Northern Ireland? When we have events, we must ensure that everyone has access to them.

Mr McDonagh:

The ValCAL study was carried out before the Smithsonian Festival took place; we looked at some estimates that had been made of the impact that it should have had in increasing bed nights. It will be interesting to look back and see whether it did, indeed, have an impact. It is all very well to speculate that it might have created a number of extra visitors to Northern Ireland, but did it, or did it deliver more? That would provide valuable evidence for doing more of that type of activity in the international arena.

Mr Shannon:

Should the Smithsonian Festival be replicated in other parts of the United States or in Europe? The festival had a specific focus on the United States; in its own way, it was aimed at that market. Should we have more of those types of arts events? Are we going to try to make money and increase the interest that results from arts spending in those areas? Even without knowing the impact that the Smithsonian Festival had, you must have had some reason for anticipating that there would be a 10% increase in US visitors.

Mr McDonagh:

Yes. It was an illustration of what such a festival can do. The Smithsonian Festival was a one-off in one way, but there are other similar festivals. The Venice Biennale is a good example of an international platform for the arts in Northern Ireland that can generate direct economic benefits.

Ms Scott:

Selling Northern Ireland through those festivals is an excellent way of raising our profile, but, as has been said, we must concentrate on our tourism infrastructure in order to pull people into Northern Ireland. That is why we have been talking about investing in the arts infrastructure. In taking those investment decisions, we will look at the numbers of tourists that would be generated. Targets would be set for those numbers in the business cases for the investments and would then be evaluated. Activity is required at home as well.

Dr Willis:

In answer to Mr Shannon’s second question, members will be aware of the Programme for Government’s public service agreement (PSA) targets that the Department has signed up to, which deal with increasing participation in, and attendance at, arts events. In a previous role, my colleagues and I worked with the Arts Council in order to come up with robust ways of measuring how that could be taken forward. I am certain that some of the Arts Council’s corporate documents will show that it has set itself targets for increasing participation and attendance among minority groups. Therefore, over time, both the Department and the Arts Council will want to see increases in the number of people who participate and attend.

Mr Shannon:

Do you suggest that the Department sets bigger targets for attendance by disabled people? Should that happen or is it wrong to set such a target?

Dr Willis:

I suggest, from a statistical perspective, that a baseline of where we are at present should be established. On that basis, projections can be made that can be used to come up with a series of targets. I do not want to bore you, members; however, the issue is always to ensure that the survey instruments — the tools — that are used to provide measures are robust. We are working with the Arts Council to get to that stage. We are pretty well there. When the baseline is established, you are in a position to ask what targets you want to set on the basis of that measure. Therefore, it is technically possible.

The Deputy Chairperson:

Raymond is the last questioner from whom I have received an indication. Dominic has now indicated as well. Before I call Ken to ask a question on the subject, I remind members that a briefing document has also been supplied for us; members might want to consider looking at that in case there are any more questions.

Mr K Robinson:

My question is on the tail of that which Jim has just asked. The cruise ships that come to Belfast now form an increasing sector of Northern Ireland’s tourist market. Is there an arts input into that programme before ships arrive in Belfast? Has that side of the market been looked at? Can the individual spend of passengers on those cruise ships be quantified? Can their use of local accommodation be ticked off? How are they accounted for? What figures are compiled of the money that they generate and their use of accommodation? If they stay on board, are they included in overall tourist-accommodation figures? Is an arts-related; historically related; culturally related; sports-related programme provided for them before they arrive in Belfast?

Ms Tohill:

I will respond with regard to the Arts Council. For the Arts Council to provide funding towards an activity, it must have an artistic element. It depends on what extent or element of the programme is artistic in nature. I am not aware of any funding that has been provided by the Arts Council, although I will check that out and get back to you.

As regards impact, I imagine that the Tourist Board has been heavily involved and would have had complied figures and indicators of what the impact might be. It is, therefore, for the Department of Enterprise, Trade and Investment to provide them.

Mr K Robinson:

Therefore, there is a cross-departmental element.

The Deputy Chairperson:

I shall issue a direction to have that matter followed up.

Mr McCartney:

My question relates to Michelle’s point about non-monetary benefit with regard to the economic appraisal. Is that weighted or is a subjective view taken? How is a project weighed up and a judgement made about its non-monetary benefit when, after an economic appraisal, it does not stack up with regard to funding? Is a subjective or objective view taken?

Ms Scott:

The assessment of non-monetary benefit is part of the value-for-money consideration. Therefore, it is part of the economic assessment. It would identify a range of non-monetary benefits that you anticipate that a programme will deliver, which will be weighted according to their importance. Those weights will be constructed through liaison and consultation with, for example, project promoters and the target audience, whether it is for a service or a capital programme. Certainly, that non-monetary assessment will be taken into account in any decision.

For example, a Department such as DCAL, where many of the benefits that it generates are non-monetary, the majority of our projects — I will try not to be too technical — will deliver what is known as “negative net present value”. We will then look at the negative net present value and weigh it up against those benefits on which we have not been able, or it is not possible, to place a value, and take an overall decision. Certainly, however, it is not the case that a project fails because the monetised benefits are not sufficient to compensate for the cost. As a Department, many of our projects are in the category that relies on non-monetary benefits.

Mr D Bradley:

I see from one of the written submissions to the Committee that DCAL did a study in 2002-03, which involved research into community arts. However, apparently the results of that research were never published. Can you give us any further information on that?

Ms Tohill:

I am not aware of that.

Dr Willis:

That research pre-dates my time in the Department. I am not aware of it, but if the Committee wants, I can go back and establish the origins of that work and provide the Committee with that research.

Mr D Bradley:

That would be helpful, thank you.

The Deputy Chairperson:

Yes; I request that on behalf of the Committee.

Mr McCausland:

The study mentions that the piece of work was stopped by the project board at a certain point — who was on the project board?

Dr Willis:

The project board was chaired by the deputy secretary of the Department, Edgar Jardine. All the heads of division in DCAL sat on the board and I, as head of research and statistics, and Michelle, as head of the economic service unit, sat on it in an advisory capacity. The heads of the appropriate branches in the Department were also involved through their heads of division.

Mr McCausland:

I apologise that I left the meeting for a short while, so you may have answered this question already, but will you tell me what the precise reasons were that led the project group to not to proceed with phase 2?

Dr Willis:

The reasons have been covered previously; however, I will give you a brief overview. Essentially, there were a number of reasons. First, it was felt from the evidence that was presented in the phase 1 report that there was not sufficiently robust data to allow us to go forward and produce an economic model that we could stand over. There were also issues about the number of assumptions that were built into the model — it was arguable whether we could have spent the money to develop and populate the model and still have been in a situation in which people would have disputed its findings.

Related to that was a value-for-money argument, which was that to get to the stage of having further developed the model, the Department would have had to spend somewhere in the region of £61,000 or £62,000. A combination of all those factors led to the decision not to proceed with phase 2.

Mr McCausland:

Is it possible to get a list of all the pieces of research and major studies that have been done over the last six, seven, or eight years? People could then request a particular study if they wanted it, such as research on Unlocking Creativity and other such strategies. A lot of work obviously went into producing such research.

The Deputy Chairperson:

Perhaps that could be put another way. If it is possible to facilitate what Mr McCausland has asked for — and one would hope that it would be — would you be happy, Nelson, that those studies were initially made available to you and then, based on that information, you could advise the Committee until we see what is available?

Dr Willis:

I do not think that there would be a problem with that. The report has quite an extensive bibliography — we will look at that again and make sure that we can supply the different pieces of research to you.

Mr McCausland:

Am I correct in thinking that there was then a process of implementation, involving working groups being set up?

Dr Willis:

What you might be referring to is the expert panels that were set up at the start of the project to assign the various types of benefits and so on that could be derived.

Mr McDonagh:

Yes; about four expert panels were set up.

Mr McCausland:

Is that in relation to the ValCAL project? I meant implementation groups that were set up in relation to the Unlocking Creativity strategy.

Dr Willis:

I was not personally involved in that project; however, if you wish, I can get further information on that.

Mr McCausland:

Yes; that would be useful.

Ms Tohill:

An interdepartmental creativity group was established in relation to Unlocking Creativity. That group still meets a few times a year. As well as that, a working group on the creative industries was set up to take forward development of the strategic action plan for the creative industries, and that group normally meets quarterly.

At the next meeting, for example, we will consider the EU year of creativity and innovation, identify a number of events and look at how the creative industries fund is being rolled out. The groups still exist, but Unlocking Creativity is no longer the relevant strategy; the interim strategic action plan is the review document for the creative industries.

Mr McCausland:

Did the ValCAL study give any consideration to potential markets for the arts that have not been properly developed or of communities that have not had much experience or participation in the arts?

Mr McDonagh:

One of the areas of impact that we identified was given the general heading of social inclusion. We examined whether there was evidence to indicate that arts activity contributed to improving social inclusion. We also introduced new people to the arts experience through community arts festivals and other community arts support.

Mr McCausland:

Was any work done to identify the communities that have a low level of engagement with the Arts Council and the arts generally?

Mr McDonagh:

No; that was not part of the brief.

The Deputy Chairperson:

A written submission that was provided for the Committee inquiry states that DCAL carried out research on community arts in 2002-03, but that the results were never published. Can you provide some information on that?

Mr D Bradley:

That is the question that I just asked.

Dr Willis:

Dominic referred to that report, and none of us were involved at that time. However, I will go back to the Department, find out about that report and supply it to the Committee.

Mr D Bradley:

I suggest that the information that Nelson has requested should be given to the Committee staff and/or the Research Services. It is hardly fair to ask one member to sift through all that information.

The Deputy Chairperson:

You are absolutely right, and that is how I envisage the process operating. It is for Nelson to look at the information, and then any other member who wishes can read it.

Mr D Bradley:

It would be useful if the information was channelled through the Committee staff.

The Deputy Chairperson:

Yes; I think that that is how the information will be handled.

Mr D Bradley:

I just wanted to clarify that.

The Deputy Chairperson:

That is all right.

The Committee Clerk:

I wish to clarify what is being requested. Is the request for the Department to provide all the policy documents on the arts that it has produced in the past six to eight years?

Mr McCausland:

Yes; and even stuff that has emerged from the Arts Council on major policy documents would be useful.

Mr P Ramsey:

That would be appropriate to our inquiry.

The Deputy Chairperson:

I thank Anne, Michelle, Philip and Michael for the presentation and for the factual and helpful way in which you have answered our questions. We might see you again.