National Arts Bank

Lord John of Southwark Excerpts

Thursday 4th June 2026 Grand Committee

Asked by

[Lord John of Southwark]

To ask His Majesty’s Government what consideration they have given to establishing a national arts bank to act as a guarantor lender for those theatres, performance venues, galleries and arts teaching colleges which require capital funding in order to operate.

[Lord John of Southwark (Lab)]

My Lords, I declare my interests as a member of the president’s circle at the Central School of Ballet and a trustee at the Old Vic Theatre. I want to talk today about a proposition for a national arts bank, which comes from my experience as leader of Southwark Council and the financial support that we were able to give to three cultural and educational organisations, which, frankly, made the difference to them being able to progress with significant capital projects. I should say that the Table Office somewhat edited the end of my Question so that its full meaning may have been lost, because my debate is essentially about capital funding.

Let me talk about those three organisations which were helped in Southwark. The Mountview Academy of Theatre Arts had been based in Wood Green, Haringey, since its inception in 1945. A leading producer of West End stars and actors in musical theatre working around the world, it had been looking for a new home in Wood Green for many years when it began a conversation with Southwark. In short order, we identified a site for it in the heart of Peckham which was suitable for a brand-new and purpose-built theatre school. We recognised that it was going to be a significant addition to the cultural offer in that part of our borough. The problem was that Mountview had some way to go on its fundraising campaign to deliver a new building. Based on a business case put forward by the academy, Southwark agreed to lend that final part of the funding that it needed, but the secured loan facility that we offered was flexible as to the repayment of interest and capital over the lifetime of the loan and was made at or below Public Works Loan Board rates. As a result, Mountview was able to proceed with planning and entered into building contracts so that the new building was opened within three years of the initial conversation—an amazing result.

The Central School of Ballet, one of the handful of classical ballet schools in the country, had identified a new home in Blackfriars, moving from its home of many years on the edge of the City of London. Central had a fundraising target of £9 million for its fit-out, but it was short by several million pounds. Again, that meant that it could not enter into contracts to progress that fit-out and move to its new home. Once again, Southwark—under inspired leadership—stepped forward and agreed to act as the lender for that final element, again on terms that provided flexibility as to the repayment of interest and capital. Again, that commitment meant that final contracts could be entered into and works completed, and the new school opened in 2020.

Finally, the Old Vic Theatre opened its new Backstage building last October. Straddling the boundary of Southwark and Lambeth, it had already demonstrated an outstanding commitment to the community over many years through its outreach work with schools and residents of all ages. Having set an ambitious fundraising target before it could start work on the new building, it was about 25% to 30% away from that target when it approached Southwark Council and Lambeth Council and sought a loan for that final element, so that it, too, could proceed to enter into contracts and get work started. The boroughs agreed to jointly lend up to £7.5 million, again at or below Public Works Loan Board rates and with flexibility as to the repayment of interest and capital over 20 years. In the event, the Old Vic did not need to draw down all the loan facility, and it is or will shortly be in a position to repay, in full, the money lent. But the fact of that facility means that, today, we can enjoy the educational facilities provided by the Backstage building, rather than waiting two or three years with ever increasing construction cost inflation.

In all three of these examples, the loans were supported by robust business plans and cases, and the organisations were already on the road to reaching their fundraising targets. But they also represented the local authority recognising the massive benefit that these important cultural organisations were bringing to the borough by investing in them. In all three cases, the terms of the loan agreement included service level agreements for ongoing and increased community and schools work. For the Central School of Ballet, that means that, each evening and on Saturdays, the school is filled with local children and residents finding out about the world of dance; and the Old Vic has redoubled its work programmes with schools in Southwark and Lambeth. So successful has the Southwark model been that I am working with another important classical music venue to help it to reach a similar deal with its local authority.

As I reflected on these examples, it struck me that this model could work right across the country—in places where arts venues and cultural schools and institutions are being held back from increasing their community work and impact because they still have outdated buildings or facilities. Despite their best efforts, they are struggling to achieve that last mile or so of fundraising needed, and a commercial loan is not a viable option. We all know that there are countless examples across every part of the country of an arts venue that needs significant capital funding. This model could make that happen.

My hope is that the Minister and the Government consider taking this idea forward within the context of a national arts bank to act as that last-mile loan guarantor. Too often, the relationship between the arts and government is that of receiving a grant or handout. This is different; it represents a mature and respectful relationship. Unlike some Arts Council funding, it is more flexible and can take account of local circumstances.

This is money that will be repaid, but it is money that makes a world of difference not just to the individual organisation but to those many people in the community, young and old, who will benefit from an improved cultural offer from that organisation. It also offers the prospect of increased employment and economic benefit—I know that my noble friend Lady Hyde will talk about that more in due course.

The cultural sector is at the heart of this Government’s industrial strategy. A national arts bank fulfilling the role that I have described would be a clear statement of the Government’s support for their own priorities and strategy. I ask my noble friend the Minister to promote this idea and hope that it may appear in a Budget in the near future.