Peers call for clarity on ‘elephant trap’ autumn budget for the arts

Members of the House of Lords have criticised last month’s budget for failing to do enough to support arts and culture, with one peer labelling it “an elephant trap” for the sector.

Speaking during a debate on the impact of the budget on arts, heritage and cultural organisations, cross-bench peer Nicholas Trench, said that “while there are certainly good things in it”, it lacked emergency help for civic museums and increased financial pressure on grassroots music venues and specialist arts education providers.

Trench said the Labour government’s focus on economic growth for its inaugural budget meant that high-profile commercialised creative industries and institutions would receive support while other arts and related cultural areas, particularly outside of London, were “neglected”.

He was one of several members to raise concerns, with many asking for clarity on measures from the parliamentary under-secretary of state for Department of Culture Media and Sport, Baroness Twycross.

Conservative peer Baroness Sater, who secured the debate, said that she welcomed decisions to retain cultural tax reliefs, a £3m injection into the creative careers programme and an increase of 16% in the capital budget for DCMS for the next year.

However, she cautioned that as DCMS’s resource spending budget will remain at £1.5bn, accounting for inflation, it will represent a 2.5% cut.

“This will make it much harder for the department to fund the cultural institutions it supports, such as the 15 DCMS-sponsored museums and galleries,” she said.

“Although national museums and galleries saw increased grant-in-aid funding in the recent budget, regional ones did not.”

Levelling up funding

She continued: “In the spring budget, the then Chancellor Jeremy Hunt announced £100m of funding for levelling-up cultural projects. However, the recent budget suggested that the government [is] minded to cancel them.

“I ask the Minister: why do the government not consider this investment to be an important part of their growth mission? Will they provide a commitment to investing in the arts across the entire country?”

Sater also asked the government to clarify if it plans to replace the UK shared prosperity fund, which it will phase out over the next two years, warning the situation “creates uncertainty at a time when local councils’ core services funding is under pressure, putting cultural projects and institutions in increasing jeopardy”.

Her concerns were echoed by fellow Conservative Lord Parkinson, who said it was “disappointing” that the budget offered “nothing” for civic museums.

“There are 2,500 of them, compared with the 15 national museums. Many are reliant on local government, a far bigger funder of culture than central government. What are the government doing to support both of them?”

Honing in on the possible cancellation of levelling up funding announced when he was Arts Minister at DCMS, Parkinson said: “Sadly, the government have now said that they are ‘minded to withdraw’ funding from all those projects.

“Those of us familiar with Whitehall jargon fear that that may be just a euphemism to avoid judicial review; I hope that the Minister can put us out of those worries.”

In response to cuts to the levelling-up funding for cultural projects, Twycross said: “This government are absolutely committed to culture, as we believe is demonstrated by the positive settlement achieved for DCMS at the autumn budget.

“However, to repair the public finances and help raise the revenue required to increase funding for public services, the government had to take some difficult decisions.”

Twycross said that the Ministry of Housing, Communities and Local Government – previously the Department for Levelling Up, Housing and Communities – will consult with potential funding recipients, including funding to some projects related to DCMS-sponsored cultural bodies, before a final decision on cancelling levelling up funding is made, with recipients having until mid-December to respond.

Music and Dance Scheme

A number of peers chose to highlight the impact plans to introduce VAT on private school fees may have on educators with an artistic focus, with the Lord Bishop of St Albans noting that cathedral choir schools, which are “not in the top rank of schools for the privileged” are “running on very tight budgets, but they are a fundamental part of providing musical education”.

“Many of them offer an outstanding musical education for local pupils. Often, we have to raise money for bursaries to keep them going.”

He continued: “There is a real threat to this, as we look at the resources and a danger that, should choir schools be forced to close, state-funded schools will not be able to plug the gap.”

Meanwhile, Baroness Fleet, Lord Berkeley and the Earl of Clancarty all asked for clarification over the VAT status of school fees for pupils in receipt of funding through the Music and Dance Scheme (MDS).

Conservative peer Fleet said that various tax rises in the budget would leave music charities, music venues, music colleges, conservatoires, opera companies, and music hubs “clobbered”.

“Incredibly, I am told that [MDS pupils] will be affected by the VAT on school fees. That would have a profound effect on the future viability of MDS schools,” continued Fleet.

“At the Yehudi Menuhin School, where I was a governor, for example, over 75% of its exceptionally talented pupils receive MDS funding or school bursaries. How can parents with an income of £45,000 or even £60,000 find up to £10,000 a year for VAT?

“If the school absorbs the costs, it will run out of funds within a few years.”

Twyford could not address the issue in the chamber, but the Treasury confirmed to Arts Professional that the full fees of pupils receiving funding through MDS will be subject to VAT.

It noted that The Department for Education provides means-tested bursaries for eligible families if their child has a place at any one of eight MDS performing arts private schools and that for this academic year, lower-income families will receive additional support to ensure the total cost of their parental contributions do not rise from January 2025 as a result of the VAT change.