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Monthly Archives: September 2009

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Sir Gerry Robinson’s advice to the Global Irish Economic Forum is to take decisive action and target  4 or 5 games companies from Scotland to relocate to Ireland by providing a package of support including five years of tax incentives.   Ireland built up its film industry by taking action in this way and now boasts  a thriving audio visual sector which now contributes 557m to the economy.

Countries across the world are investing in their creative industries to get out of the recession – even in Iceland

The Scottish and UK Governments are fully aware of the vital importance of the games industry to the Scottish economy. There have been several reports now making a strong economic argument for investment in the games industry throughout the Creative Britain process, the Digital Britain report  and, specifically,  by NESTA and by TIGA, the games industries association.  TIGA’s most recent report:

presents a robust argument for the introduction of a tax break for the UK video games industry, similar to the tax credit which already exists for the UK Film Industry. This report was submitted to the UK Government’s Department of Culture, Media and Sport on August 28, 2009.
Key report findings included:
  • Over 5 years the Games Tax Relief would create 1,400 new jobs in the studio sector
  • 60-80 UK developed titles would benefit per year
  • A tax credit would trigger growth in employment, new game development, innovation and investment, and more sustainable business models for British studios
  • By year 5, for every £100 of investment by government in the Games Tax Relief, the industry will invest £176.
  • Over 5 years the Games Tax Relief would increase investment by games studios by £146m, direct and indirect annual tax revenues by £133m and GDP contribution by £323m
Mike Russell, the Scottish Culture Minister, frequently refers to the importance of the games sector and it will be one where the Creative Industries Partnership will get involved beyond the work Scottish Enterprise already does, it if deems it necessary, which surely it must.  Scotland has watched while France and Canada have invested  in the games industry and stolen a march.
Mike Russell states that full fiscal autonomy is necessary to offer the right package of support.

A spokesman for the Scottish government said to the Herald in its coverage at the weekend:

There is a range of support available for the games industry in Scotland. Of course, our view is that Scotland should have control of key fiscal levers in order to do more. This is a clear example of the need for radical change which at least provides full fiscal autonomy for Scotland. Until we have those powers we’ll continue to make the UK government aware of the implications for the Scottish gaming industry. We’ll also work with the industry to provide evidence of the impact.

If the Conservatives win the next election we can expect progress in this area, if Ed Vaizey has has way.  Perhaps Ireland will wait patiently.  Perhaps its hot air. Perhaps a deal is being done with the games industry while the political points are being made.  Dundee MSPs are seeking action. All the evidence is there.  Its just the action we want now.

Following hot on the heels of NT Live, Opus Arte has announces that productions  from Shakespeare’s Globe Theatre will now also be accessible  in cinemas throughout the UK and abroad.

The Opus Arte 2009/10 season also includes world class productions from the Royal Opera House, Glyndebourne,  Madrid’s Teatro Real and Barcelona’s Gran Teatre del Liceu as well as concerts from the chapel of King’s College, Cambridge.  Opus Arte claims:

“Recorded in High Definition and true Surround Sound these performances from the world’s great stages give you an experience as vivid and as ambient the best seats in the house”

As the work of world class brands becomes more and more accessible, regional theatres will have more opportunities to diversify and free up resources.

Its part of the programming balance in a regional theatre to present world classics and Shakespearian productions but this is a costly business.    The cost of mounting a Shakespearian production or major classical production in our regional theatres varies.   So does the cultural success of the productions, in terms of the specific resonances and connections to local audiences through the production and the quality of the production.

But if a regular supply of excellent productions of Shakespeare and classics becomes available at a nearby cinema, then theatres could free some of their resources into the streams of theatre that are very specific to their audiences.  Collaborative work, participative and community work, research and development are all costly activities which tend to be subordinate to putting on the big productions but which embed theatres into their communities and allow them to take artistic risks.

Cinemas should be the bed rock of cultural planning for the 21st century.      In their inherent neutrality, they are more democratic and accessible than theatres, concert halls and opera houses.  The network of cinemas streaming opera and theatre live does not cover the whole of the UK at the moment, but it could.

It remains to be seen how much more diverse the audiences will be for Shakespeare and opera  in cinemas than they have been in  theatres, where audiences in regional theatre overall have remained static and lacking in diversity over the last five years at least.  Removing the barriers of cost and location and providing more certainty as to the quality through the assurance associated with household names should surely open up the experience to a wider audience.

Although public appointments in the arts have attracted attention of late, its worth remembering that the great majority of cultural governance in the UK is of a different order. Just about all arts organisations – theatres, arts centres, orchestras, festivals and so on, are charities, or limited companies with charitable status.  They are voluntary organisations and require to be governed by charity trustees and to comply with regulations, OSCR in Scotland. But the regime for serving as a charitable arts trustee is much less clear cut than serving as a Public Appointee, where the Seven Principles of Public Life apply, along with Registers of Interest and the like.

Charities are much more of a mixed bag.  Each organisation, required to comply with the law, will have its own constitution, memorandum and articles of association and/or other legal frameworks. Most arts organisations were established as charities in the days before social enterprise companies and Community Interest Companies existed, as the only type of organisation which would allow them to receive grants and avoid corporation tax.  Most of them are still charities because they can get rate relief on their premises.

There are some 23280 charities in Scotland of which 598 have the arts as one of their objects. These arts charities are encouraged to operate according to guidance provided by arts councils and their agencies.

Care Diligence and Skill, a handbook for arts boards in Scotland describes in detail the system, the requirements, the expectations and gives direct advice to arts board members assuming a low level of experience and understanding.  Versioned by previous SAC directors, the handbook is a useful bible particularly for new arts boards and trustees.  The book lays out the idiosyncracies and differences between arts boards and businesses, and arts boards and other charities.  It gives advice on a range of issues including recruitment, running board meetings, selecting members, legal and fiscal responsibilities, role and remit of the board etc.  There are are also several training courses to encourage adoption of this system, run  by other intermediaries such as Arts and Business.

But none of this advice is compulsory and its up to each board to behave and operate as it sees fit, and in accordance with its own constitution.  Take, for example, the agreed good practice around length of service.  Public appointments are offered at a maximum of two terms of four years.  In Care Diligence and Skill, a total length of service of six years is proposed.  But there are quite a few boards where the Chair and some board members have served for a longer period than that.

So is it worth the effort and resources of creating and disseminating bespoke advice and training, when there is free advice and affordable generic training available, for example on SCVO website?

That depends on how important it is to maintain the current regime and the style and behaviours of arts boards.  Because the arrangements for arts boards differ from others.

Where most arts boards differ from other charities, as well as businesses, is in their lack of accountability to members or shareholders.  In most arts organisations, the directors of the company are congruent with the members, and so the directors are only accountable to themselves, and of course, the funders who are significant stakeholders. Those arts boards who are elected by, and accountable to, a membership, are in the minority.

This contrasts with, for example, a health charity, where the members pay their subscriptions and vote for the trustees.  It also contrasts with private companies, where there are shareholders.

The danger of this is that some arts boards view themselves as primarily part of the (arts council) system as opposed to responsible to their community for the arts activity or facilities.

The most effective arts boards I know nowadays have three characteristics:

1. they have a board which is skilled and expert, particularly with a strong and experienced chair

2. the boards include representatives of the communities which the arts organisation serves; this could be local politicians, artists, education partners etc.  The inclusion of community and partners goes against custom and practice of recent years which has tended to narrow down the constituencies on boards, to make them easier to manage

3. they have clear and contemporary terms of reference which set out the roles and responsibilities of the board and enshrines its commitment to refreshment and renewal of skills – with a maximum term of office

The question is, is the current system, which keeps the arts in check and retains the status quo, what we need for the 21st century?  We seem to have created a coterie of bespoke limited companies with charitable status, populated by some talented and hardworking board members.

But in a fast changing world, with less and less public sector resources, we need our arts boards to be proactive, looking ahead and innovating.  We need them to take responsibility for the long term success of their facility or activity, to maximise their embedding into their community and to be  involved in as much partnerships and entrepreneurial activity as is appropriate. Perhaps even remodelling and merging.

Part of that look ahead for individual boards should include a fundamental review of the corporate structures and governance arrangements.

Maybe a Community Interest Company (CIC) or another type of Social Enterprise Company would better than a charity.  These vehicles are more suited to wider community ownership and to income generation.

But its horses for courses.  In some cases  maybe its even best to retain the status quo and for people to stay in their seats.

equal-pay

Critics of the current system for Public Appointments in Scotland which has led to a perceived imbalance towards financiers on public arts bodies might compare the conditions offered around some other current public appointments.  Scottish Enterprise, the lead economic agency is recruiting board members and remunerates them at  under £12,581.  NESTA is seeking a Scotland Trustee at £5ooo per annum.  No public appointees in the arts and culture in Scotland receive any remuneration, bar the Scottish Arts Council Chair.

This might shed some light on the lack of diversity on the boards of public art bodies. The reward for serving on an arts board must be described purely in terms of altruism and the desire to provide public service whereas serving on a health board or economic agency is valued financially as well.  Underlying this custom and practice are some anachronistic beliefs about art and culture and a value system which does not serve well our arts and creative industries.

There is an old belief  that artists and creative practitioners are content to starve in a garret – best not to bring filthy lucre into the equation.  By extension, those involved in governing the arts should not be recompensed financially.  Therefore, there are only two types of trustee who can reasonably be expected to serve on a board: those of independent means, the descendants of private patrons in the arts,  and those who expect to suffer (financially)  to support the arts organisation.  This tends to exclude great numbers of artists and creative practitioners who are freelance, sole traders or micro businesses who need to earn income.

The current system not only restricts the types of people who might serve on boards to those who are able to serve for free but also sends out a signal that, as a society, we value arts and creativity less than economics and other areas of public life.

The creative industries is a key growth area for Scotland and the arts and culture a major contributor to the global success of Scotland.  So why do we not value the contribution made by expert boards in the same way as we value expert boards in other sectors?

There is an opportunity to address this in the establishment of Creative Scotland.  If the board roles were suitably remunerated, then we should get the most expert, hard working trustees available and the leadership role could be multiply discharged throughout Scotland.   And if those happen to have independent means or chose to starve in a garret, that’s fine, they can gift their remuneration to the arts.

http://www.flickr.com/photos/jmmuggianu/

The news that Glasgow’s Lighthouse has gone into administration is sad but not surprising.  The Centre’s business model is one which worked a few years ago and which the Centre claimed to be a successful and transferable model.   But its dependency on generating substantial, but variable, income both from the Scottish government to deliver particular programmes and also from commercial retail and venue hires exposed it to risk.  And the model appears not to have been able to adapt to reduced income.

The Lighthouse was a bespoke model which has played an important role in promoting design and architecture in Scotland, and in delivering some programmes.  It also breathed life into Charles Rennie MacIntosh’s 1895 Herald Building and is just one of several Lottery funded capital projects where all the stakeholders held hands and took a leap of faith.    Feasibility studies and business plans at the turn of the century were optimistic.  In their  projections for income and attendance as well as the capital and running costs of new buildings, many of these plans turned out to be unrealistic.   Funders and organisations conspired to look only on the bright side, with no license for a more prudent view,  because no one would admit that many of these facilities required more public subsidy, an unpalatable truth which was swept under the carpet –  a microcosm of the high risk and optimistic approach taken in financial services.  High profile projects to hit the rocks early on were the National Centre for Popular Music in Sheffield and more recently the Public in West Bromwich has had to remodel and refinance its original plans to survive.

Three factors which have conspired to cause the crash are:

  1. Business Model: With a business model predicated on very little core subsidy, the crew of the Lighthouse would always have to box clever to survive.  This probably would mean a small core operation, to avoid the current situation when reportedly the permanent staff number 57 and cost £1.5m in 2008 according to the last published accounts.
  1. Role Definition: The Lighthouse has also struggled to define and assert its role in the changing context of devolved Scotland.   For the Lighthouse, there are two other recent or recently refined agencies which are closer to Government and which could be seen to occupy territory similar to that stated by the Lighthouse: “To be a leading body for the promotion of architecture, design and the creative industries, locally, nationally and internationally by engaging people of all ages through a creative exhibition, education and business programme.”  Or “the National Centre for Architecture, Design and the City.”   These are the long awaited Creative Scotland and its definition as “the national public body for the arts and culture embracing the creative industries” and the refocused Architecture and Design Scotland, ‘the national design champion’.
  1. Building block: The Lighthouse solved the problem of how to find a use for a building important to Glasgow’s and Scotland’s architectural heritage and presumably appeared the best option when an appraisal was undertaken.  But at around £.5m in the costs of running the venue before any activity, this could be the final nail in the coffin.

Although the situation is grave, there is light at the end of the tunnel.  People care about the Lighthouse and value its core activities and several are offering suggestions as to its future.  Culture Minister Mike Russell has stated in today’s Herald

The Scottish Government will enter into constructive discussions with the administrator and with Glasgow City Council to find a way to take forward the many good things that The Lighthouse has achieved and to ensure that it and its talented staff have a continuing influence on the quality of architecture and design in Scotland

But when the phoenix rises, it needs to be 21st century cultural organisation which has a clear role and mission complementary to others and with a business model which is able to adapt to our fast moving world.