Local Government Finances

Baroness Bull Excerpts

Thursday 21st March 2024 Lords Chamber

[Baroness Bull (CB)]

My Lords, I am grateful to the noble Lord, Lord Shipley, for securing this debate. As trailed by the noble Baroness, Lady Hamwee, I will indeed use this opportunity to highlight how the current crisis in local government finances is impacting on arts and cultural services, and the communities that enjoy and benefit from a thriving local cultural ecology.

The positive effects of arts and culture on place-making and local communities are well evidenced. Aside from the intrinsic value, cultural venues and services create jobs, attract visitors and support the wider local economy. Cultural programmes provide skills development for young people, connect with marginalised groups, engage communities in local issues and encourage active citizenship. Culture makes neighbourhoods more desirable places to live, with cultural spaces providing a resource in which people feel pride and a place where different parts of the community can come together. In short, arts and culture make for a better place to live, work and do business—all of which is very much the core business of local authorities. Indeed, much of this cultural activity is enabled by local authorities, which are the main public investor in arts, culture, tourism and heritage, allocating £650 million each year to libraries and £430 million to museums, heritage and the arts.

However, this long history of investment is under increasing threat. We have already heard about the pressures facing local government today: inflation, wage increases, pensions, the cost of living and energy, homelessness, the rising cost of adult social care, and increased numbers of children with special educational needs and disabilities. Analysis from the Local Government Association in October last year showed that English councils face, as we have heard, a £4 billion funding gap across the year—and that is just to keep services standing still. The extra funding announced for 2024-25 will help, but it will not bridge this gap.

The now too-familiar reports of, at worst, bankruptcies and, at best, dramatic cuts, can no longer be seen as isolated incidents, but have to be acknowledged as systemic failure. Currently, some 19 councils across England are receiving exceptional financial support, which is more than double the more typical number—between five and nine—in this category since the onset of the pandemic. Local councils’ core spending power has seen a 24% real-terms reduction between 2010 and 2025. While much of this has been absorbed in new ways of working, efficiencies and staff reductions, it is inevitable that non-statutory services, such as arts and culture, will take a hit. According to a recent LGA survey, 55% of responding councils

“reported that cost savings would be needed in their sport and leisure service provision”,

with 48% reporting

“that cost savings would be needed within their library services”,

and over a third, 34%, reporting

“the need for cost savings in their provision of museums, galleries, and theatres”.

For cultural organisations, this crisis in local government funding sits alongside changes to the Arts Council portfolio and the ongoing impact of Covid, from which the sector has yet fully to recover. It also has to be set against a backdrop of the 10 years of austerity policy, which saw average local authority investment in culture reduced by nearly 37%. As a result, directly or indirectly, theatres, venues and arts organisations in local communities are facing existential crises—from Windsor and Maidenhead to Woking, Ipswich, Nottingham, Birmingham and beyond. Some have already closed; others are struggling to pull off a five loaves and two fishes-type of miracle to get them through the coming year. While London venues and organisations are certainly not immune, withdrawal of local authority support has a disproportionate effect outside London and other major conurbations, where there are far fewer alternative sources to fill the gap through, for example, corporate sponsorship.

The allocation of levelling-up funds to cultural projects has been welcome, although it is concerning to read in the recent report from the Public Accounts Committee in the other place that as at September last year, local authorities had been able to spend only 10% of the Government’s three levelling-up funds. Likewise, the announcement in the Spring Budget that theatre, orchestra and exhibitions tax relief will be made permanent was warmly welcomed, but it might be hard for some local communities to feel the benefits of theatre tax relief when their local theatre is boarded up.

What is needed is not one-off funding but long-term, sustainable and multi-year settlements that will enable councils to invest in the local cultural infrastructure and services that create thriving, dynamic environments for local communities. Without guaranteed funding, cultural activities suffer from an on-again, off-again effect which leads to community disengagement and uncertainty for organisations and the people they employ. In the end, it is local communities that suffer. Will the Government heed the call from the Local Government Association for multi-year settlements that allow councils to plan ahead and provide communities with the services they deserve?

Pitting arts and culture head-to-head against other local priorities and needs is never a good idea, particularly so at the moment, when the here and now pressures are so loud. Arguments about their longer-term impact on the economy, growth and jobs are understandably hard to hear.

Nevertheless, arts and culture play a major role in delivering for communities, and successful local cultural strategies—that is, strategies that are specific to the area and that work in partnership across different sectors—can deliver to multiple local priorities: skills, regeneration, education, employment or health. As Liz Green, the chair of the LGA’s Culture, Tourism and Sport Board, has written, local councils need the creativity of cultural organisations and their perspective on how things might be done differently, not just in cultural services but across the board. There are many good examples of this collaborative approach in practice, with a recent example being Culture Start in Sunderland —a city-based partnership spanning social housing, schools, the voluntary and youth sectors, and higher and further education, as well as culture—which aims to mitigate the impacts of growing up in poverty by enabling more children and young people to access the multiple benefits of cultural participation.

Strengthening and enhancing the local cultural offer strengthens and enhances local places and improves the lives of people who grow up, live and work there. It makes them more attractive to visitors and business, and more likely to attract funding from grant-makers and investors, all of which further enhances the local environment. There are many stakeholders who contribute to the positive benefits that this kind of local cultural ecology can deliver, but the underpinning certainty of local government funding has always been the catalyst that enables the change.