National Arts Bank

Baroness Bonham-Carter of Yarnbury Excerpts

Thursday 4th June 2026 Grand Committee

[Baroness Bonham-Carter of Yarnbury (LD)]

I join noble Lords in thanking the noble Lord, Lord John, for this inspired debate. I do not know quite a few of the noble Lords here. This is a different forum, so noble Lords might not appreciate that I am the Liberal Democrat spokesperson.

On our Benches, we believe there is a strong case for exploring mechanisms that improve access to affordable capital for cultural organisations, particularly those with significant civic value but limited or no ability to secure conventional lending on viable terms. Cultural organisations are very enterprising, as many noble Lords know. They exist in a mixed economy of grants. If they are lucky and live in Southwark, they are from local councils, but they are also from organisations such as the Arts Council, trusts and foundations, as the noble Baroness, Lady Hyde, said. They also seek sponsorship and philanthropic giving. There is direct income from membership schemes, commercial activities such as ticket sales, and revenue from gift and coffee shops.

Owning a building is obviously an asset for a cultural organisation but it comes with huge financial exposure. Today there are rising energy costs, the impact of wars, inflation and, previously, the pandemic. I declare an interest as a trustee of the Lowry in Salford, where I have seen this at first hand. I say to the noble Baroness, Lady Wheatcroft, that I am experiencing it outside London.

Noble Lords have mentioned the excellent report on Arts Council England by the noble Baroness, Lady Hodge. She put it starkly when she said that arts organisations are facing a

“capital crisis, the scale of which is threatening the very fabric of the country’s cultural infrastructure”.

The last big injection of capital took place 20 years ago and, as she says:

“The boilers and lifts installed then now need to be replaced”.


There are literally cracks in the walls and buckets in the corridors and backstage, as I am sure the noble Baroness, Lady Hyde, knows.

The noble Baroness, Lady Hodge, recommends that the Government urgently find innovative ways of responding, and there has been a response. Earlier this year the Government announced capital investment funding distributed through Arts Council England, which will provide financial assistance to invest in

“buildings, equipment, digital infrastructure and technology”,

but much more is required, as the noble Lord mentioned in his introduction. The scale of capital need across the cultural sector is now so substantial, as the noble Baroness, Lady Gill, said, that demand for support, even in the form of loans or guarantees, is likely to exceed the available capacity. The question therefore becomes not simply how capital is distributed but what outcomes it is intended to achieve.

The most important criterion should be not just remedial capital investment in isolation but investment that demonstrably improves long-term resilience and sustainability. In other words, support should ideally prioritise projects that help organisations adapt successfully to future operating conditions, whether through energy efficiency, modernisation, diversified income generation, audience accessibility, digital capability, workforce development or more flexible use of buildings and assets.

Then there is social capital. Many noble Lords have mentioned NEETs, and I return to the Lowry. It is more than a building, theatres and a gallery. Through vigorous learning and engagement work, it helps and inspires young people into the creative sector. Over the years, it has forged almost 30 community partnerships across Salford and Greater Manchester and has contributed a deep, diverse and long-lasting impact on local lives through educational, volunteering and community engagement programmes. It is at the heart of its community. Many other cultural organisations are the same, but they need to have a stable and safe roof over their heads to provide outreach work, inspiration and future careers for the next generation, as so many have said.

In the past, Nesta, which the noble Baroness, Lady Gill, mentioned, set up an arts impact fund by bringing together public, private and charitable funding. It provided repayable finance to arts organisations with ambitions to grow, to achieve great artistic quality and, crucially, to impact in the specific area of social value. Does the Minister agree that social capital should be considered as leverage for raising financial funds?

Most theatres, galleries, performance venues and arts training institutions are carrying significant pressures around capital maintenance, infrastructure renewal and cash flow. A national arts bank could help unlock investment where organisations are fundamentally sustainable but constrained by the risk profile perceived by commercial lenders. There will of course be key questions around scope, governance and strategic prioritisation—as the noble Baroness, Lady Wheatcroft, mentioned—but if designed well, such a mechanism could strengthen the sector’s resilience and preserve important cultural infrastructure and places. We agree with the noble Baroness, Lady Hodge, that, without that, arts organisations are facing a crisis.