Fun With Numbers – Where does the Money go?

I read a report recently – from Arts NI I think – about per capita spending on the arts. They were comparing the current absurdly low level of per capita funding in Northern Ireland with other territories in the EU. It struck me that there seems to be difficulty getting agreement on amounts invested and economic value created, costs and benefits etc., particularly at government level. A lot of the confusion stems from the old problem of are we talking about Culture or are we talking about The Arts, around capital as opposed to current funding, and around a fundamentally ideological problem surrounding the idea of state funding – is it investment or is it an expenditure. So I thought I’d skip back to the source data in an Irish context and see what I could find. The results are very interesting.

If we look at the data provided by Local Authority Finances.com for 2018 and The Arts Council’s online Who We Funded Tool we can match Arts Council spend to specific local authorities and calculate a per-capita arts spend county by county. Its important to stress that the Abbey’s €7 million in 2018 is not included in the Who we funded tool, so it doesn’t figure in the graphs that follow. Its also important to bear in mind that – according to the last available annual report from the Arts Council (2017) – the Council itself costs about €8,965,00 making it the largest recipient of its own funding. I mention these two facts to account for the totals in Arts Council spend in the figures below.

In terms of top line amounts the Arts Council total expenditure on grants in 2018 (not including the Abbey or its own operational costs) appears to have been €52,627,722. The total Local Authority allocation to The Arts Programme Budget was €67,280,381. So if we are to talk about direct current expenditure on the Arts then we could say that it is €119,908,103. If we want to talk about a wider Cultural Spend then we would need to include things like Libraries, which accounted for a total Local Authority Spend of €161,573, 611, and we would need to include sport and heritage. So, for simplicity lets stay focused on the arts. It’s also important to bear in mind the findings of the recent Review of Arts Centres and Venues, commissioned by the Arts Council, that highlighted the significant “in-kind” support provided by Local Authorities. I have no estimates for the value of this “in-kind” support at this time.

So, if we take €119,908,103 as the total amount of statutory funding for professional artists and organisations in Ireland, how does that look per capita. In other words what is it costing everybody, or how much is everybody receiving (because income = expenditure). The answer is €25.18 per capita, of which €11.05 is channeled through the Arts Council and €14.13 channeled through the Local Authorities.

Those are national figures, so I was wondering what it looked like on a county by county basis. Here’s the answer:

If you click on the image you can see it full size on your screen. What’s obvious is that the distribution across the population is not equal. Galway City tops the chart with a total per capita spend of €121.64 as compared to Galway County with a total per capita spend of €6.40, or Kildare with €5.41. Galway is an interesting case, as we can presume that the 2018 spike is directly related to The Capital of Culture, but if we look back at local authority spending from 2014 it still ranks as among the highest in the country in terms of local authority spend with €52 (2014), €61 (2015) €75 (2016) and €71 (2017), and – as a colleague recently pointed out to me – no Arts Council  money is allowed to be used for Galway Capital of Culture  projects as that would constitute   “dual funding”. So the Galway spike in these figures is not directly related to the Capital of Culture status. It begs the question is Galway attracting this level of investment because it is such a special, creative place or is it such a creative place because of the levels of funding? It raises the further question, given that Galway City’s per capita spend is close to German levels, why are we still hearing reports of how difficult it is for artists to make work and make a living in the city? Clearly its not the amount, but the way it which it is invested that is of primary importance.

The other observation worth making is that it is clear, in terms of “artist support and public engagement”,  opportunities are extremely unequal across the country.

Its also interesting to look at the total nominal spend, the actual amounts of money, in each local authority. In the following chart I have included the spend on libraries as it provides an interesting discussion point. Again, click on the image to see it full screen:

Again we can see the unequal distribution in terms of actual amounts, with the Dublin City Council area absorbing €22,374,047 of Arts Council investment – €29,374,047 if we include the Abbey (56% of total grant allocations) – with Galway City coming in a distant second at €3,657,095, and Cavan trailing the pack with €113, 800. Its interesting to note that in all counties the investment in Libraries is greater than either the Arts Council investment or the Local Authority Arts Programme investment.

Again there are questions here: it is stated again and again at the highest levels of government that arts and artists are an essential part of Brand Ireland, playing a role in the promotion of the country as an investment site and a tourist destination. Can we make the same claim for our libraries? Are investment and visitor decisions made on the basis of library access? If not then why the disparity in investment? Libraries are an important part of the community infrastructure and play a significant role in education and life long learning, but we can make the same claim for artists and arts organisations, and so why the disparity in investment?

The final point worth considering is in the areas of cost-benefit and economic investment. It is common practice to apply a “multiplier” to spending to evaluate its wider economic impact in terms of total contribution to GDP. The multiplier currently doing the rounds in Dept of Culture reports is 2.19. This means that every euro spent creates €2.19 as it travels through the economy. The other interesting number is how much is taken back in direct and indirect taxation – and the number doing the rounds in the reports is just over 40%.

Lets take the multiplier first. I would suggest that a key question is, at what point do we apply the multiplier? If we assume that the money traveling from the arts council or a local authority to a client is an expenditure then we could say that the economic impact of that spend is €277,928,745 (€126,908,103 x 2.19). However, the money traveling from the Arts Council or a Local Authority is only considered an expenditure for accounting purposes. In effect it is simply a transfer of funds. Once that transfer of funds takes place, and the artist or arts organisation then begins to engage in real economic activity something very interesting happens. The statutory investment is only a part of the organisations turnover. Essentially, if a client receives €25,000 from the arts council and €5,000 from a local authority, it will proceed to attract additional money from sales, ticket sales, fees, commissions etc. all or most of which it will spend in actual economic activity (materials, salaries, fees, etc). The multiplier should be applied to the total turnover of each grant recipient. Now, lets suppose that the total statutory investment represents only 50% of the total turnover, we then have to apply the multiplier to twice the statutory funding (statutory funding + earned income), which gives us a total economic impact of €555,857,491. Approximately 40% of this will return to the state via direct and indirect taxation, totalling €222, 342, 996, which is €95,434,893 more than was originally invested via Local Authority and Arts Council funding.

Its really important to note a couple of things, even if you disagree with the maths. These numbers relate only to the distribution and impact of statutory funding within the arts. The wider arts sector is far bigger than the cohort of grant recipients – and that’s before we get to the audio-visual sector; current distribution of statutory funding is unequal both nominally and in per-capita terms and this impacts on population movement, quality of life, investment decisions, artist-support and public engagement; state finances do not operate the same way as a business – state expenditure grows an economy, reduction in state expenditure contracts an economy; the arts – in terms of state funding – pay for themselves and most likely return a surplus to the exchequer; even in areas of the county where the per capita spend is close to European levels the economic condition of artists is still dire, which means the problem is fundamentally a policy problem and not just an investment issue.

There are lots of ways to look at this data, and I will be performing comparisons across time in the coming months. If you have any requests or suggestions then please drop me a note.