‘Profound disappointment and disbelief’ over impact of autumn budget on culture

Members of the House of Lords have called on the UK Government to provide assurances that it has adequately assessed the Autumn Budget’s likely impact on the culture sector, and will provide support to mitigate against rising costs.

In a debate on 14 November called by Conservative peer Baroness Sater, the house heard that several measures in the budget would have an adverse effect on arts and cultural institutions.

Sater said that, while she welcomed the government’s decision to keep tax relief for museums and other cultural bodies, the announcement that the Department for Culture, Media and Sport’s (DCMS) day-to-day spending would remain the same at £1.5bn would represent a 2.5% real-terms cut.

“This will make it much harder for the department to fund the cultural institutions it supports, such as the 15 DCMS-sponsored museums and galleries, at a time when the Art Fund reports that 89% of adults agree that museums are important to UK culture,” she said.

“Although national museums and galleries saw increased grant-in-aid funding in the recent budget, regional ones did not.”

Sater also questioned why the government was considering the cancellation of £100m in Levelling Up funding for cultural projects, including redevelopment work at V&A Dundee, the National Railway Museum and National Museums Liverpool.

She said: “I ask the minister: why do the government not consider this investment to be an important part of their growth mission? Will they provide a commitment to investing in the arts across the entire country?”

Sater said the budget contained further challenges for the “already financially challenged cultural sector”, including the reduction in business rates relief from 75% to 45% until March 2025, when it will cease altogether.

“Many arts and cultural organisations operate from a physical location and will struggle significantly to foot the increased overall costs of business rates,” said Slater.

Meanwhile the rise in employer National Insurance (NI) contributions is also “causing real concern”, said Sater.

She said: “It will push up staffing costs for cultural organisations and may impact levels of employment and future pay rises for staff, hurting particularly the lower paid workers. The Southbank Centre in London’s initial calculations showed that these changes will cost it at least £700,000 in 2025. These are not small sums. As we all know, no one can fundraise for tax increases.”

Sater asked: “Have the government done an impact assessment on the effects of these increases in NI, the minimum wage and the removal of business rates relief on the cultural sector? Is the minister able to provide an assurance that the government will increase funding to the cultural sector, similar to that provided to the public sector, protecting it from these unwelcome rises?”

'Broken promises'

The government was accused of “broken promises” when it came to supporting culture. Conservative peer Baroness Fleet said that “arts organisations were so full of hope when Labour came to power and there is now just profound disappointment and disbelief”.

Fleet said that, after making it through the pandemic, museums and other cultural bodies “desperately want to contribute to economic recovery and growth” but are “now reeling, with the minimum wage up and employer national insurance up”.

“This is a tax on jobs, work and growth. It is a tax on talent, creativity and ambition,” she said.

Lord Vaizey of Didcot, who served as the Conservative government's culture minister from 2010-16, said “it is not exactly what one would call a refreshing time to have a Labour government in place for the arts”.

He said: “Securing the future of the arts in this country is such a simple and easy thing for any government to do – believe me, I have fought those battles as well – by giving long-term and generous funding, which is still a rounding error on the overall budget of government, for all our national and regional institutions.”

However, Vaizey said that there “has to be a bit of give and take from the arts”, saying that he became frustrated as arts minister “that we lived in a world where no museum or no theatre should ever close”. He suggested that more cultural institutions should consider “M&As” (mergers and acquisitions) and greater cooperation to ensure their survival.

Crossbench peer Lord Clancarty said that “the danger for the arts of economic growth being so central to the government’s plan is that more high-profile commercialised creative industries and institutions get support while other of the arts and related cultural areas, particularly in the regions […] get neglected”.

“Unfortunately, this budget, while there are certainly good things in it, bears that out, with no emergency help for civic museums and a situation where our already struggling grass-roots music venues are in a worse position now than before the budget,” he continued.

Crossbench peer Lord Freyburg said he felt “profound concern for our nation’s cultural and heritage sectors” and that the government’s measures for supporting culture “fall short of addressing the fundamental challenges”.

Freyburg highlighted the impact of the minimum wage increase and the planned £5bn reduction in Levelling Up funding, adding that “local authority museums’ urgent plea for a £20 million emergency fund” had gone unanswered.

He said: “I ask: what assessment the government have made of these measures’ cumulative impact on our cultural sector. What plans exist to address local authority museums’ urgent needs? How will the government ensure that increased operating costs do not trigger widespread closures across our cultural landscape?”

'Damage repair'

Labour peers defended the government’s decision-making on culture.  

Lord Bassam of Brighton said that, under the previous government, public funding for the arts had dropped by 18%, while museums had been hit particularly hard, with 32% of them experiencing budget cuts.

“If we are asking why the arts are in peril as a result of changes in public funding, the answer is clear: the last government took money away from arts and cultural industries,” he said. “Our government’s challenge is to find ways of ensuring that some of that damage is repaired.”

Bassam said the budget had supported culture, with an uplift of 2.6% to DCMS and increased investment in cultural infrastructure and employment. He urged the government to consider new sources of revenue, such as a levy on music venue ticket sales, to supplement public funding for culture.

In response to the questions raised in the debate, the parliamentary under-secretary of state for DCMS, Baroness Twycross, said the government recognised “the financial pressures facing our sectors after 14 years of cultural vandalism and the legacy of Covid-19”.

She said the government knows “the public funding landscape we inherited is very challenging”, with net expenditure on cultural services by local authorities down significantly since 2010 “as councils saw their budgets decimated”.

She said that the government had “started to address the funding concerns for local authorities, with an increased settlement confirmed at the budget” and that “the measures announced by the chancellor on 30 October amount to a valuable package of support for these sectors”.

Twycross said she was aware that increase in the rate of employers’ NI contributions had “caused some concern” and said that DCMS officials had “spoken with a number of major cultural organisations to understand how it will impact them”.

Regarding the cuts to Levelling Up funding, Twycross said that the government had inherited a “forecasted overspend of £21.9bn above limits set by the Treasury in the spring”.

She said the Ministry of Housing, Communities and Local Government would consult with potential funding recipients “before a final decision is made”. Recipients will have until mid-December to respond.

Twycross said: “This government are absolutely committed to culture, as we believe is demonstrated by the positive settlement achieved for DCMS at the Autumn Budget.

“However, to repair the public finances and help raise the revenue required to increase funding for public services, the government had to take some difficult decisions, including increasing the rate of employers’ national insurance.”