Culture Recovery Fund misses major Leeds venue and throws up questions
An opinion from Jamie Hudson, CEO at Yeadon Town Hall
Yeadon Town Hall is a beautiful Victorian building, which now serves the community as both theatre and multipurpose venue. For many years local councillor; Ryk Downes with the community and in recent years; myself, have worked tirelessly to restore and maintain this fantastic asset. However, since March, income has drastically fallen by 95% due to the global Covid pandemic. Expectant of a bumper year, 2020 was to be a superb run of theatre shows, comedy, boxing, ballet, musicals – you name it and we had it.
Our survival between March to August was due to the money we had alongside the hospitality rates grant and an emergency grant from the Arts Council. However, the total of these 2 grants was only £55,000 which is 1/9 of our anticipated turnover for 2020. Through opening the Town Hall Tavern and running a monthly community market, we have just managed to cover all outgoing expenditure; nevertheless, like all old buildings, the Town Hall costs a significant amount of money to repair and maintain. We’ve had to adapt very quickly to survive.
In July the government announced that they would support Culture in England by distributing £1.57B in grants and loans to organisations through a ‘Culture Recovery Fund’. This news for many was the lifeline they needed to hear, as money would go to any type of organisation involved in UK culture. It gave the cultural community some inspiration to battle on and an unquestionable view that all culture would be supported. In August we submitted our application through the Arts Council platform where 6 questions were asked as part of the assessment. With the possibility of 350 word answers, I noted that this was very little detail for what effectively could be a £3M grant.
On Monday 12th October I logged onto the Arts Council platform to see if our bid to the Culture Recovery Fund had been successful. After several attempts of trying to log on, I finally read the generic letter to say that our application had been unsuccessful.
Extremely disappointed, I instantly felt let down and betrayed. How could our organisation, which helps and supports so many people in the community and represents the third largest theatre in Leeds (by capacity) not be seen as culturally significant?
Unfortunately, the ability to switch off from reading who had been successful in receiving grants was further hindered. The terms of receiving the grant requested beneficiaries “to acknowledge the funding publicly by crediting the Government’s Culture Recovery Fund.” Therefore the 1385 organsiations that received good news filled social media with their merriment. For me, this was a further kick in the teeth; to feel rejected then witness other theatres and venues similar to Yeadon Town Hall receive funds was even more heartbreaking.
At 1pm on Monday 12th, the Government and Arts Council released a list of those 1385 successful organisations including the amounts of money received. My first surprise was the range of organisations, from guitar shops to event crews, theatres to dance schools, sound companies to event organisers, bars and nightclubs – certainly all aspects of culture had been included. However; after scanning the list of successful candidates and looking at the amounts of money distributed, myself and others quickly started to ask questions.
Firstly there’s the lottery scenario. Why should company “A” in one town get funding, but company “B” from another town, (who do exactly the same thing), get no funding? For instance, Zig Zag Lighting LTD (a Leeds based, 35 year old lighting company) were rejected for £140,000 yet their competitor; Colour Sound received £373,000. This means that Colour Sound is now at an advantage against Zig Zag in the future as they have received state aid and therefore have greater financial resilience. Could the money not have been split equally so both companies benefited? Those that were successful won big time and those that failed were left with nothing. This feels completely unfair and unjust.
Secondly; there’s the amount of cash that was available versus the number of organisations that applied. We keep hearing the phrase “not all businesses can be saved” however in the case of saving culture, there should and could have been no excuse not to have supported the majority of the sector. The Arts Council have given away £500,000,000 (five hundred million pounds) in non repayable grants across England (only) on behalf of the DCMS. This excludes major organisations who could apply for a loan of £3M plus, which is in addition to the £500M grants and not forgetting the extended furlough scheme, rates relief, VAT relief on ticket sales and attractive government backed loans available to all. In the first round of funding, 1963 organisations applied, 1385 were successful and 578 were rejected. Whilst we don’t know of the results of Friday’s announcement (stage 2 applicants) it is expected that this round will equate to a further 1500 applicants. Surely, if monies had been fairly distributed, there would have been many more organisations supported across England.
Thirdly, one of the conditions of the grant was that organisations were invited to refill their savings accounts to ensure they had financial resilience to weather a future storm. The suggested amount was 10 weeks turnover (for us that would equate to £75,000, which we didn’t request). For many organisations, they would be extremely happy to make this amount of cash as net profit in an entire year, let alone during a pandemic. In essence the Arts Council have given away millions in surplus cash, as up to £150M could be sat in savings accounts of those successful grant recipients. Surely this is a complete waste of public money when so many other organisations are left with nothing and so urgently require funding now?
Fourthly, many bars and late night leisure venues have received funding. Starting at the top of successful applicants, Manchester bar operator Mission Mars, which received £1,000,000 are funded by a £10M investment from venture capitalist BGF group (a £2.3B fund.) Ministry of Sound (which received £975,468) showed a net loss on its balance sheet of £8M in 2018. Whilst there’s no denying that both are credible contributors to the cultural matrix of England, what financial due diligence has the Arts Council conducted to ensure that this public money is gifted to the most beneficial organisations to fuel cultural resilience and growth for the future? How confident is the Arts Council that this cash isn’t being used to service existing debt or repay short term loan notes plagued with extortionate interest?
Organisations to receive significant amounts of money should be made accountable as to how they contribute to culture in England and I believe this information should be made available publicly. For example, the £250,000 granted to a Meatloaf tribute show appears excessive.
Peterborough New Theatre, (which only opened in September 2019 and therefore traded for 6 months) has received £639,000, which likely is more than their turnover. The Liz Hobs Group LTD received £150,000, yet their sister company owes £300,000 to HMRC and £66,000 to the band ‘Steps’. Finally; London based ‘Secret Cinema’ received £977,000 and are linked to a £133M American private equity firm. Secret Cinemas holding company accounts show a reported loss of £2.9M in 2019. We were told only financially viable organisations were eligible to apply, yet the Arts Council have sent £977,000 to a private organisation that has failed to generate any revenue for the last 2 years. Are all these examples positive examples of UK culture and are these organisations worthy of public funds?
I firmly believe there was plenty of money available to split fairly between many more organisations and there was no excuse not to help a larger majority, even if some grants were significantly lower than requested. Every little helps. In my opinion, the DCMS money has been distributed unfairly by the Arts Council, and where it has been found to be distributed wrongly, it is unlikely to ever be recovered. I believe that the Arts Council was out of its depth to distribute this amount of money in the urgent time frame and with the unusual conditions set out by the government. I don’t believe they have the experience or resources to handle the large amount of applications or carry out adequate due diligence. Surely a few question boxes and some basic cash flow and management accounts can’t be all that’s required to receive £1M? Many organisations have been left high and dry by the Arts Council due to their inept ability to run the most basic of checks or operate with a pragmatic approach to help all.
Not only have the Arts Council and DCMS failed many cultural organisations, but they have also created an incredible divide of bitterness between those that received money and those that have not. What happens to the losers? Do they limp on or give up and retrain whilst those that did receive money prosper and know that their coffers are refilled? What about the mental health of the staff of these organisations that have been so wrongfully rejected? Where’s the followup email or offer of further support? Where’s the support for the 1000s of sole traders? In reality – it doesn’t exist.
Finally, I fundamentally believe that the Arts Council do have an opportunity and have a moral duty to correct and help those organisations that didn’t receive funding. They have to ensure they strictly monitor the grants they have given, recover money that may have been wrongfully administered and carefully audit how this precious public money is spent.
The Arts Council currently has an open £75M fund which they can again convert into an emergency fund, as they did in April. In doing so, they again could save many more cultural organisations like Yeadon Town Hall. However, to do this, they need to act fast.
Sources: ACE Data as published 12/10/2020 & HMRC Companies House