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Local councils are fearing bankruptcy – this is very bad news for the nation's theatres

Funding from local authorities may dwindle given the present circumstances

The Royal Exchange in Manchester
© University of Salford Press (CC BY 2.0)

A lot of attention is, naturally, being paid to the government's £1.57bn package – a very big number, on the face of it, but one that has a massive task to do – preserve and sustain our country's cultural institutions, while putting venues and artists in a position to create diverse, exciting work when able to do so.

The package is vital yet far from perfect – funds may not be received until late in the year (December for larger organisations), and it will be distributed via the existing Arts Council portal Grantium – a fiendishly unpredictable tool for many who have tried to use it.

But a growing crisis (and one that has already been slowing escalating for a number of years) that will have even longer-term impacts on our nation's theatres lies around local funding.

Local authority funding isn't as glamorous as top-down state aid – it doesn't come with the big fancy figures or make headlines. But, methodically, this is the funding that has provides a bedrock for the nation's venues.

According to 2015 studies (and things will have inevitably changed since then), local authorities are spending around £1.6bn a year on arts, culture and libraries. That's direct aid going from informed local decision makers, who are regularly visiting, responding to and appreciating the value of their local communal cultural spaces. That's £300,00,000 more than the Rishi Sunak and co's package.

Over the last decade the picture has been shifting – salami slicing to local funding have been near-nationwide – in late 2017 Bristol Old Vic had its council funding reduced by 65 per cent. In Bristol's case, that's less of a salami slice and more of a hack job to one of the country's leading venues.

What this has meant is that theatres have been increasingly relying on earned income – ie box office revenue, to survive. Curve Leicester had a 10 per cent cut in its Leicester City Council funding in 2019 – to help compensate, it added 67 seats to its auditorium – seats that aren't currently providing any form of financial support.

Local funding is vital not simply for helping to stage shows, but to also bolster outreach programmes, support schemes and community projects. As per the Northampton Theatres' end of year report, "local authority grants for young people and emerging artists have almost entirely declined and a significant proportion of delivery for creative learning is subsidised through earned income." If money is becoming scarce then these creative learning initiatives may be on the chopping block, and the drive to foster new talent will be lost.

So surely local authorities are being supported by a well-meaning, well-prepared and benevolent government that has everything in hand, right?

Well – no. Reports throughout the summer are warning of how local authorities risk going bankrupt. Eight out of ten, according to some studies, while the BBC has identified five that are particular at risk.

Like almost everyone else in the country (apart from streaming giants, online shopping firms and pharmaceutical companies) local councils are facing dire circumstances – "131 of 151 English councils do not have sufficient funds to make up for projected increased costs and reduced income due to Covid-19" according to Progressive Policy. Many are having to make redundancies – in Luton for example.

Thanet council has admitted that, with a "£3 million black hole" it may have to issue a Section 114 notice – freezing spending. Manchester council warns it may have to declare bankruptcy by the end of the year.

Whitehall hasn't been sitting idly by – £3.2bn has been given to English councils to help cover Covid costs. But if there's a second wave this is only going to get worse and the Arts Council is worried, as per its annual report: "Covid-19 is also severely impacting on local government, the largest investor in the arts and culture sector in England. This has exacerbated our concerns over the possibility of further reductions in local authority investment."

ACE's stipulations for the government's Covid support package won't help venues remain forward-thinking though, as per today's guidance for larger loans – "We do not expect this funding to be used to experiment, research or develop new work that is not directly essential to your organisation remaining financially viable. This funding is not intended to enhance your cultural offer."

Enhancing theatre's "cultural offer" in a rapidly developing world has never been more vital – powerhouse and internationally prestigious national venues that create cutting-edge work will be able to justify investment from local councils. If venues' artistic output stagnates, the money dries up.

This all might mean that £1.6bn of local authority money may slowly taper off – not simply now, but in years to come as councils tackle a funding shortfall. Funding that is desperately needed to keep venue doors open, at a time when reserves will be virtually non-existent.

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