Arts boss in warning after ‘one off’ use of reserves to plug £6.6m budget cut

Arts body Creative Scotland could have to cut the funding it provides to organisations unless there is a “significant change” in its overall budget going forward, MSPs have been told.

Chief executive Iain Munro said the body had stepped in at short notice and used reserve cash to reverse a £6.6 million cut to its budget imposed by the Scottish Government.

Mr Munro likened that intervention to “trying to change the engines on an airplane while you are flying it”, but said without the use of its reserve funds, the bodies which rely on Creative Scotland funding would have seen their money cut by 40%.

Even with the shortfall being made up by Creative Scotland, Mr Munro said “at least a third” of the organisations it provides regular support to “are so financially fragile as to be at risk in this next six-month period”.

This could see 900 jobs lost and impact on some 12,000 artists, he told the Culture Committee at Holyrood on Thursday.

Ministers had pledged in February the budget cut would be reversed, but this was always subject to confirmation in autumn budget revisions, with Mr Munro saying in a “very significant development” that the body had been told the “reduction is being reinstated”.

After learning of the cut – which amounts to about 10% of Creative Scotland’s overall budget – Mr Munro said its board had acted “swiftly and pragmatically” to use funds from its National Lottery reserves to offset it.

Without that, he said the money given by Creative Scotland to 119 regularly funded organisations – which include dance, literature, music, screen, theatre, and visual art companies – would have had to be reduced.

With the reduction coming part way through the year, Mr Munro explained these groups would have seen the final two payments they receive this financial year slashed by 40%.

He stressed, however, that the use of reserve funds to plug the shortfall was a “one off”.

He added: “If the cuts were to continue, if there were budget reductions, we would have to pass them on to the sector.”

Speaking about Creative Scotland’s situation, and that of the arts sector as a whole, Mr Munro told MSPs: “Our own financial resilience, and that of the sector as a whole, is depleted.

“We are at a very significant moment around the heightening of the risks around the sector.

“We anticipate, unless there is a significant change in overall budget levels, that we are not going to be able to sustain the levels of support we have been in the past for as many organisations, certainly to the level that we have.”

He said Creative Scotland does “not underestimate the pressures on public finances”, adding “hard choices are of course having to be made, there are pressures on all fronts”.

But he said there has been “confusion” about the “very clear and bold statements of value and support for the cultural sector” from ministers “compared to the reality of resource”.

Mr Munro told the committee Creative Scotland’s budget had now tipped below 0.1% of overall Scottish Government spending, going on to warn that financial pressures on the sector will “be amplified if the reductions continue into next year”.

Speaking about the impact on the sector of the funding situation, he told the committee: “I think there is despair, there is despondency, there is disillusionment.

“There is a fear, people are exhausted in trying to keep the show on the road, literally, and that is vital for planning confidence.

“I think in these situations, as the perfect storm continues, and I have got to say it’s growing stronger, the risks are increasing all of the time in relation to the potential for parts of the sector to be unsustainable, and we see the decline of the sector in the months and indeed years ahead unless there is a change in the resourcing equation.

“That means closures, job losses, loss of provision, less available for communities right across the country, less available for artists.

“I think it is potentially very damaging if there is decline on the sector.”

Lori Anderson, director of Culture Counts, told the committee the reinstatement of the £6.6 million budget cut by the Government “goes beyond disappointing”.

She said: “It will be a massive knock in confidence to the sector and there’s going to be a significant job for the Government to restore trust between the Scottish Government and the sector, in all honesty.

“It shows a disconnect between what’s being said by us and what is being heard, and it ultimately shows that the value of the sector is really not understood.”

Culture Secretary Angus Robertson said: “Over the past five years, the Scottish Government has provided £33 million to Creative Scotland to compensate for a shortfall in National Lottery Funding and we agreed to provide £6.6 million to cover this year’s shortfall.”

Stressing the Scottish Government’s obligation to deliver a balanced budget, Mr Robertson added that rising costs and pressure on budgets “made more challenging as a result of rising UK inflation” meant the government was “unable to provide funding to support the lottery shortfall this year”.

But he added: “I expect this funding will be able to be provided as part of next year’s budget, subject to the usual parliamentary process.”

Mr Robertson continued: “Creative Scotland have built up funding reserves and I am pleased they have agreed to use all the resources at their disposal, including these reserves, to support the culture sector and help protect jobs at this challenging financial time for us all.”

But Scottish Tory culture spokesman Donald Cameron accused ministers of having “shamefully shifted the goalposts on this vital funding for Creative Scotland”.

The MSP said: “It is completely unacceptable that ministers who were quick to boast about U-turning on previous planned cuts earlier this year are now set to impose them on Creative Scotland after all.

“That is an insult to Scotland’s struggling arts sector and it is clear the cutting of millions of funding from their budget will have a devastating impact.”

Scottish Labour culture spokesperson Neil Bibby meanwhile said the government had “abandoned Scotland’s iconic arts and culture sector at the worst time possible”.

He added: “It’s clear their disastrous incompetence is putting the very future of our creative industries under threat – they are risking jobs, damaging our economy and making culture less accessible.”