Entrepreneurialism leaves museums more vulnerable to Covid-19 crisis, research finds

Earned income at NPOs has increased by 47% in 10 years
Jonathan Knott
The increasing reliance of English cultural organisations on earned income has left them more vulnerable to the Covid-19 crisis, according to new research from the National Campaign for the Arts (NCA).

The latest Arts Index report finds that earned income at organisations funded through Arts Council England’s (ACE) national portfolio has increased by 47% over the past decade.

ACE’s 2015-18 portfolio included more than 50 major partner museums as well as a large number of visual arts galleries.

In 2007/8, the earned income – generated from sources such as tickets, cafes and gift shops – of portfolio organisations per head of the English population was £9.34. This rose to £13.72 by 2017/18, adjusting for inflation.

The new index, published this month and covering 2007/8 to 2017/18, finds that cultural funding from both central and local government has fallen heavily over a similar period.

In 2017/18, ACE’s funding from central government per person in England was £4.78 – 41% lower than its level of £8.14 in 2009/10.

Local government funding of the arts in England has dropped by a similar proportion, falling by 43% from £9.59 in 2008/9 to £5.43 in 2017/18. This makes it the indicator that has fallen the most out of the 20 tracked by NCA through its index.

In contrast, the index says that arts funding from the National Lottery per person rose by 21% between 2007/8 and 2017/18, but it does not provide specific amounts illustrating this. English arts lottery funding has fallen significantly since 2012/13, the year of the London Olympic Games.

When the amounts from central government, local government and the lottery are combined, NCA says public arts funding has fallen by 35% in real terms between 2009/10 and 2017/18.

Samuel West, the chair of the NCA, said it was a cruel irony that the successful efforts of cultural organisations to become more entrepreneurial over the past decade has left them more exposed to the current crisis.

“Arts organisations rose to the challenge following the financial crash; we salute them for increasing earned income in response to a triple whammy of cuts to public funding, business sponsorship and philanthropic giving,” he said.

“It’s bitterly ironic that the arts sector’s resourceful response to the 2008 financial crash is now the very thing that makes it vulnerable to the Covid-19 crisis, with theatres closed and income from tickets and bars dropping off a cliff.
"Funders like ACE are being proactive and helpful; now we need a commitment from the government to a rescue plan and a public funding package that will enable our sector to survive the shutdown.”

Caroline Norbury, chief executive of the Creative Industries Federation, said: “The Arts Index makes for shocking reading - a steep decline in public and private investment in the arts, with the sector now more reliant than ever on earned income from box offices, cafes, bars and gift shops - all of which are now closed.

“With the impact of Covid-19, our creative industries will play a crucial role in regenerating our country, and in driving tourism and the wider economy, as we rebuild. There will be a need, more than ever, for those who can think the unimaginable and make it happen. But we can’t do that without urgent investment into our arts, in all parts of the UK.”

Positive findings of the research include a significant growth in arts funding from trusts and foundations and an increase in the combined reserves held by organisations in the arts council's national portfolio.

The Arts Index has been published since 2011, tracking 20 arts sector indicators in areas including funding, education, the economy and public engagement.

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