Arts funding is back in the headlines, as the Government is hit by the backlash from its Budget decision to restrict tax relief on donations to charity. Although the changes are almost certain to be enacted, they have united a front of opposition across politics, finance and the arts. MPs from all parties in opposition, albeit a minority on the Government benches, have publicly opposed the changes, while a coalition of senior figures from all the art forms has written a ‘Give It Back George’ letter to the Chancellor.
At the same time, a lower profile coalition has been building in opposition to another set of Budget proposals: the imposition of the full VAT rate on repairs to listed buildings. Although receiving less press attention, this 20 percent increase in the cost work on everything from cathedrals to private houses, has infuriated the historic environment sector which had, ironically, spent many years campaigning unsuccessfully for VAT to be abolished altogether.
These two tax changes are significant, not just because of their direct impact on, philanthropy and the historic environment. They also mark the moment the relationship between the Government and the wider cultural sectors shifted. Before the 2012 Budget, the debate has been strangely subdued, with arguments over the rights and wrongs of funding cuts undermined by the “Well, what do you want us to do? Cut health?” context for any debate over cuts. It was a case of either accepting or rejecting the entire public sector cuts programme.
Now, however, George Osbourne’s united policy front has begun to fray at the edges. The Budget displayed a startling degree of incoherence, suggesting the strain of running a Coalition is undermining the smooth running of even the HM Treasury machine. Why develop a long-term philanthropy strategy for taking the strain on arts funding, and then directly disincentivise it? This will have a serious impact on overall giving: as Audiences UK has pointed out, almost half of all donations to the arts come from just 7 percent of donors. Nor, apparently, did Jeremy Hunt know about it in advance. It is also hard to see much benefit beyond short-term revenue raising in ensuring that fewer repairs to historic buildings take place in future.
This moment could prove to be tipping point, both for Government and the sector. The Government is reaching the mid-point of its term, and now that 2010’s commitments are mostly delivered it needs new ideas for the next two years, and for 2015 manifestos. In a year’s time it will be returning to listening mode. When it does, it should find a cultural sector with a new, louder voice. Cuts campaigns, for example on library closures, have been local while national voices have been weak. The financial bombshells that exploded in the Budget should ensure the sector wakes up to common threats, stops apologising and begins to get its voice heard.