National Arts Bank

Baroness Hyde of Bemerton Excerpts

Thursday 4th June 2026 Grand Committee

[Baroness Hyde of Bemerton (Lab)]

I thank my noble friend Lord John for tabling this debate and welcome the contributions from noble Lords so far. I will particularly focus on theatre, having spent about a decade working in that industry and having trained at Guildford School of Acting. I welcome the suggestion of an arts bank, particularly to address the tricky matter of capital funding for some of these important and, in many cases, historic buildings.

Many theatres and cultural venues operate from listed buildings that are technically outdated. Trying to repair them and ensure compliance with accessibility requirements and decarbonisation becomes a very difficult and costly matter. The Government’s Purcell report from January 2026 estimated that about £7 billion in repair, maintenance and renewal was needed across publicly and third-sector owned cultural buildings, with about £3 billion of that being urgent and about £2 billion being needed in terms of the current funding deficit.

Specifically around theatre, a 2024 survey from the Society of London Theatre and UK Theatre’s members demonstrated that one in five of their venues needed at least £5 million over the next decade just to continue operating. Again, this is capital funding to do with buildings. This has nothing to do with the mounting of productions or supporting creators; it is just to continue the buildings operating. Without major capital investment, about 40% were at risk of closure and 40% could become unsafe to use.

Despite these challenges, as my noble friend Lord John alluded to earlier, the theatre sector still delivers significant social and economic benefits. It supports over 100,000 jobs and civic infrastructure. It makes towns and cities exciting and vibrant places to live, work and visit. This research estimates that every pound spent on a theatre ticket generates a further £1.40 for the local economy. The Society of London Theatre and UK Theatre have done further research that demonstrates that support for capital investment would mean that 54% of venues could provide more jobs. As my noble friend Lady Gill alluded to, that is a significant part of the argument for an arts bank and further capital funding. It would mean that 62% of these venues would increase their outreach work—again, a brilliant benefit for the community—and 100% of venues said it would improve their environmental sustainability. For those buildings built in the Victorian era, 100% would be able to ensure real accessibility for all patrons.

As has been stated, theatre finances rely on quite a mixed model of funding—philanthropy, sponsorship and, in some cases, public subsidy. Venue operators have to supplement that with their programming, catering, hiring and a variety of means, so financial resilience really depends on how those streams interact with each other. Earned income now accounts for 58% of the total income of subsidised organisations, with just 17% coming from contributed sources—for example, the Arts Council. Growth has really stalled, and competition for what support there is has intensified. Even large organisations are really struggling to secure multiyear commitments at scale, and smaller venues that are not in major cities face even starker barriers.

Theatre really struggles to access suitable commercial finance for capital works. Repayable finance requires predictable cash flows, but theatre income by its nature is backloaded, with ticket revenue arriving only once productions are open and production costs have been recouped. So it is brilliant that DCMS announced a £1.5 billion cultural capital package in January this year. It is the most significant intervention in cultural infrastructure in a generation. It included £425 million through the creative foundations fund, which has already been mentioned, for around 300 capital projects in arts venues. That is really welcome. It feels like the beginning, not the end, of the story about capital investments for the arts. This suggestion of a national arts bank would make that public funding go further to build a far more financially resilient arts estate, with all the benefits that we know it would have.

The financial model of many theatres can make it really difficult, and this arts bank would provide repayable grants to de-risk that investment proposition for investors who may not otherwise have the risk appetite to support arts venues. It is a really easy way for backers to get involved: it simplifies and de-risks it, and I commend the idea to your Lordships. It is also key to ensuring that our rich theatrical heritage is able to enrich lives and the economy for many years to come.