A new report published today reveals that a disproportionate amount of Lottery funding distributed by Arts Council England is going to wealthy, arts-engaged audiences who contribute least to the Lottery funding pot. The PLACE Report by senior researchers Peter Stark, David Powell and Christopher Gordon follows on from last year’s highly controversial Rebalancing our Cultural Capital research, which resulted in a House of Commons Select Committee inquiry.

Closely argued, comprehensive and deeply thoughtful, the PLACE Report reveals disquieting statistics regarding distribution of Lottery money by Arts Council England. Not least of these is the amount of Lottery funding still being awarded to National Portfolio Organisations in addition to their Grant-in-Aid support (£148.2m in 2012-2013), against the amount awarded through open application – a considerably smaller £55.5m.

Arts Lottery funding to the five largest London recipients (The Royal Opera House, Royal National Theatre, English National Opera, Sadler’s Wells and the Southbank Centre) “totals £315m since the beginning of the National Lottery. This is additional to their annual funding of over £80m”. As a result, these organisations alone have received more Arts Lottery funding since 1995 than the combined total of 33 local authority areas whose communities are least engaged with the arts.

Poorest benefit least

Because Lottery income is derived from the sale of Lottery tickets to the public, regulations require distributors to use funds in specific ways that will benefit the widest number of people. This report makes it clear that those areas of England that buy the most Lottery tickets – typically some of the country’s poorest locations – benefit least from distribution of the proceeds. Since 1995, the 33 local authorities where people are least engaged in the arts have received the equivalent of £48 per person – £288m of Lottery funds in total. In comparison, the 33 areas with the highest levels of “arts usage” have received £275 per person – £1.327 billion in total. The difference is an enormous £1 billion.

These figures lead the researchers to conclude that: “The Arts Lottery has disproportionately benefited the most prosperous and ‘arts-engaged’ communities in England, which are often also those contributing least to the Lottery. Some of the least arts-engaged and poorest communities, meanwhile, who are contributing most heavily to the ‘arts good cause’, receive the least return.”

In other words, the poorest in society are subsidising the high-end cultural-leisure activity of the wealthy. This is one of the reasons why the principle of Lottery ‘additionality’ was created, a principle the PLACE report shows as severely eroded. It’s also a reason why many commentators have seen the Lottery as a regressive initiative. The local authority area with the poorest return is County Durham, whose Lottery players have contributed £34m since 1995, while it has received not much more than a third of that back – £12m – in distributed Lottery funding. This represents “a net deficit of £22 million” and “in effect a contribution to the surpluses of other areas.”

“We fundamentally question the Arts Council’s stewardship of the National Lottery funds, which are provided for far wider public benefit than its Treasury grant,” say the report’s authors. They make two sets of recommendations to address this situation: one is a complete overhaul of the circa £300m of annual Lottery funding, to distribute through three funding streams that prioritise “the social priority of engagement with areas of disadvantage, the economic priority of dispersed cultural production, and the artistic priority of support for artists’ practice across all disciplines.” The second is devolution of funding to regional or “multi-authority” level with weighted allocations.

Support for artists’ practice

The recommendation to devolve funding to regional levels is perhaps too similar to the now defunct regional arts boards and regional development agency structure to be entirely comfortable, given that these were also flawed and largely closed systems. But could it be made to work? It would be crucial to draw expertise from a much wider pool of stakeholders and individuals, and to create policy and decision-making mechanisms that enable access and input from them. Can this be done without grinding bureaucracy, and lobbying interests dominating in their own favour at the expense of fairness and parity?

But it is the recommendation that support for artists’ practice should be prioritised that might resonate most strongly. There is growing acknowledgement from Arts Council England that the recent and prolonged emphasis on renewing the building-based infrastructure took money away from direct support for artists’ production and development. a-n’s research into Arts Council England funding has shown that in the last National Portfolio Organisation funding round, small organisations nurturing artists’ development and practice were disproportionately cut. a-n/AIR research since into visual artists’ incomes shows that exhibition fees to artists have declined significantly, with 71% of artists reporting they have exhibited without receiving any fee at all.

a-n’s A Fair Share demonstrated that direct funding to artists across all four UK arts councils was significantly less than 5% of the total visual arts budget in each. Between 2008 and 2010, less than 2.5% of visual artists living in England received direct funding. A Fair Share showed that, on these figures, an artist makes one funding application in their own name to the Arts Council every 20 years. Between 2008-2010 they then had a 50% probability of being awarded funding – that is, 50% of applications were unsuccessful. Given the entire complex arts edifice nationally and internationally rests on the varied, innovative and continuing practice and production of artists, this is an urgent issue that is crying out to be addressed.

The PLACE Report is conceived as the second of three major research papers examining the arts funding system in England. The third report, called The Artist, will focus on the critical issue of support to individual artists, and complete a hat-trick of heavy-hitting, in-depth and independent research documents. The clear mission overall is to influence policy and funding in Arts Council England (and in the instance of the PLACE Report, perhaps Lottery regulators as well). As the second round of National Portfolio Organisation applications is being assessed, these are timely reminders to Arts Council England of the urgent systemic challenges they are obligated to tackle.

Also on a-n.co.uk:

Rebalancing our cultural capital – new.a-n.co.uk/news/single/london-regional-arts-funding-divide-why-so-surprised

Towards Plan B – new.a-n.co.uk/news/single/towards-plan-b-a-different-approach-to-arts-funding

Let them eat buildings – new.a-n.co.uk/news/single/let-them-eat-buildings