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"OUR NEXT MAJOR ENTERPRISE..." Final Report of the Cultural Commission: June 2005

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Section 3 Scotland's cultural sector

3.1 Demographic trends and forecasts

3.1.1 A declining and ageing population

By 2021 Scotland's population is expected to have fallen to 4.9 million (a drop of 6% from 2001). This is primarily due to declining birth rates. 1 The largest population group in 2021 will be those aged 65-75, most of whom are likely to be retired. There will also be significant growths in the groups aged 45-54 and 55-64, meaning more mature people with disposable incomes. At the same time, young people will decline proportionally with the 15-24 group, including graduates, diminishing by 13% by 2021 and with the 25-34 age group dropping 13% by 2011. 2

At present, in terms of proportion of weekly disposable income spent on leisure, arts and entertainment, those aged between 25-35 and 65-75 spend the most per capita each year. In terms of total spending power, however, the large middle-aged group (between 30-50) is the most powerful. 3

For the first time in living memory, net migration in Scotland is positive, with more people choosing to come and live in Scotland than emigrate overseas. This is the continuation of a steady fall in emigration levels since the late 1960s.

3.1.2 The creative class

Migration of skilled workers to Scotland is a corner stone of the Executive's current economic policy with initiatives such as Fresh Talent aiming to attract people to live and work in Scotland. Culture has its part to play in this process. Recent work from the USA reveals the provision, dynamism and vibrancy of cultural services as a key factor in the attraction and retention of the 'creative class' who are and will be increasingly responsible for growing Scotland's economy. 4

3.1.3 A new kind of cultural consumer

Faced with an empowered and discerning population who face increasing pressures on their time, cultural organisations will need to keep pace with the commercial sector in terms of quality of experience and offering value for both time and for money. In 2001 spending on leisure goods and activities constituted the largest share of average weekly household spending in Britain, accounting for £62.50 a week or 17% of the household budget. 5 Cinema admissions increased almost threefold during 1995/99, while spending on admission at spectator sports alone now extends to £750m annually.

Many leisure venues have broadened their offer to the consumer so that a wider range of activities is possible under one roof. For example, shopping centres containing cinemas, galleries containing cafes and restaurants, bars offering sports TV and even films as well as food, quizzes, karaoke and live music.

Due to its unique nature, including the ability to transport people from the pressures of their everyday lives, cultural activity has many strengths that could prove valuable in such a market.

3.2 The impact of technology

3.2.1 The digital divide

At present there is a deep social disparity in the take-up of new information and communication technologies. This results in an unequal capacity to engage in many of the activities that technology enables. This disparity of access is what has become known as the digital divide.

In Scotland in April 2005, 17% of households and 26% of businesses had broadband. 6 However, this figure is still well below the UK and EU averages. Broadband will be accessible to 97.8% of the UK population by summer 2005 but take up will vary greatly. There is a significant proportion of society that does not have access to any of the new communication tools. In June 2004, UK households in the two lowest income groups have home Internet access rates of 7% and 5% respectively. As income rises, so do levels of Internet access, peaking at 71% for the highest income households. This profile is similar in Scotland, albeit with lower overall Internet access rates. Some 40% of the population, largely in disadvantaged groups, is still expected to be without home access to the Internet in 2007, despite continued take-up of new technologies. 7

Internet access has been rising amongst all groups in society. This would indicate that in twenty years, access to present-day information and communication technologies will be as universal as telephone or television.

The digital divide is not related to a lack of telecommunications infrastructure, but to poverty, lack of awareness and low skill levels. The groups likely to be most affected by the digital divide are those which are already most excluded within society. The Scottish Executive is already committed to the issue of digital inclusion through a variety of initiatives including the current Digital Inclusion Strategy and new initiatives expected before the close of 2005. 8

3.3 Mapping the cultural sector

3.3.1 Local government cultural services

Following local government re-organisation in 1996, 32 unitary authorities were created 9, each with a major role in making cultural policy and its provision. Local authorities outline how they intend to meet the cultural needs of their area through the preparation and publication of a single authority-wide cultural strategy. This translates nationally determined priorities into local needs and aspirations. Although local authorities have statutory duties, there are significant variations in the level and type of provision made across Scotland and significant variations in the level of spend per head of population and across local authorities. In addition to direct provision, most local authorities work in partnership with other bodies to develop and provide culture.

Core local authority cultural activities include:

Activities

Elements

The arts including galleries

  • promotion of performing arts, visual arts, literature, community arts, cultural traditions, creative industries, moving image/film e.g. through projects, performances, festivals, information

  • provision of venues e.g. theatres, galleries, arts centres, and the inclusion of arts activities in multi-purpose facilities

  • building capacity of arts organisations (including voluntary sector)

  • audience development (including development and outreach)

  • support for artistic standards in architecture and the built environment

  • public art e.g. sculptures in open spaces

Community recreation

  • providing facilities for community activities (including halls, community centres

  • children's play areas

  • community use of schools for recreation

  • provision of local activity programmes (including local festivals, civic weeks and galas)

Heritage, museums and historical records

  • museums (including the collection, recording and preservation of artefacts)

  • heritage sites and attractions

  • promoting interest, awareness and understanding of national and local heritage including access to collections, education, outreach, and the use of information technology

  • conservation of the built heritage (including implementation of national policy, stewardship of the historic environment) and good management (including responsibility for maintenance and cataloguing of the dean of guild and other records)

  • archaeology

Libraries, galleries and information

  • promoting access to resources (manuscript, printed, electronic, and multi-media materials, and community information)

  • contributing to lifelong learning (including school library services, flexible and open learning, e-literacy and training)

  • promotion and development of literature (including events, literacy, publications and national promotions)

  • promotion of cultural heritage and community identity (including partner libraries, the Scottish Parliament Library (and SPICE) and European information relay and information provision)

  • provision of electronic access to public services (including 'Modernising Government' and "21st Century Government")

Parks and open spaces

  • provision of access to countryside/ranger services

  • historic parks

  • open space provision

  • horticultural provision

Sport

  • increasing participation in sport and physical activity

  • facilitating the improvement in performance of clubs and individuals

  • building the capacity of the voluntary sector

  • providing indoor and outdoor facilities (including sport and leisure centres, swimming pools, playing fields and other outdoor sport facilities), including school and community provision

  • sport events

3.3.2 The Scottish Executive

Following devolution in 1999, the Scottish Executive assumed responsibility for cultural policy in Scotland, with specific responsibility resting with the Minister for Tourism, Culture and Sport. The ministry reached full Cabinet status with the appointment of Patricia Ferguson MSP in October 2004. Prior to this responsibility lay with Deputy Ministers and a Minister without full Cabinet status.

Responsibility for advising Ministers and developing policy for the arts, creative industries including screen, cultural education, museums, galleries, libraries, literature, Gaelic, and the National Lottery rests with the Scottish Executive's Cultural Policy Division, a Division of the Education Department's Tourism, Culture and Sport Group ( TCS). The Division also sponsors the cultural (Non Departmental Public Body) NDBPs and handles nominations for UK honours.

The TCS Division's Architectural Policy Unit is responsible for advising Ministers on architectural policy and it sponsors the newly created NDPB Architecture + Design Scotland ( A+DS) and the Royal Commission on the Ancient and Historic Monuments of Scotland ( RCAHMS). Tourism is also part of the Executive's TCS Group, which provides core funding for VisitScotland and advises Ministers on tourism policy.

3.4 Financing culture

3.4.1 Information on cultural expenditure

Information on expenditure on cultural services in Scotland is difficult to identify for a number of reasons:

  • there is no universally accepted definition of what constitutes 'cultural' activity

  • financial information in the public domain - websites and annual reports - uses varying accounting practice and presentation

  • the accounting presentation of the NDPBs and other sponsored bodies are not standardised or aligned

  • data from local authorities may not be comparable.

However, trends in cultural expenditure over a number of years have been examined and graphs and tables are reproduced in Annex A. In the following sections we focus on the most recently available figures.

3.4.2 Local authorities

Local government is the major provider of cultural services in Scotland. In 2003/04 local authorities spent £274m on the provision of culture. 10 In the same year, the combined grant-in-aid to the Scottish Arts Council, Scottish Screen, the National Institutions (Libraries, Museums & Galleries) and Bòrd na Gàidhlig totalled £93.5m. 11 In 2003/4 this represented just over 2.5% of total local authority expenditure. Also in 2003/04, Scottish local authorities spent 36% on Education, 22% on Social Work and 5% Central Services. 12

Local authorities have a range of financial sources, including central government funding through Aggregate External Finance ( AEF) 13; council tax, generated income and a range of other sources such as the National Lottery, EU as well as the grants from NDPB etc.

In respect of statutory cultural services, local authorities are required to:

  • "manage, regulate and control all libraries or museums or galleries", and create restrictions as to how they may charge for these facilities 14

  • to "ensure that there is an adequate provision of facilities for the inhabitants of their area for recreational, sporting, cultural and social activities" 15

AEF has been increasing since 1998. Cultural expenditure has also been increasing but not at the same rate. However, many of the increases in AEF have been related to specific policies such as free care for the elderly.

3.4.3 Variations in cultural expenditure at the local level

There is a great disparity between what local authorities spend on cultural services, both in terms of total figures and per capita spend. Whilst this reflects some of the realities of varying population levels and varying concentrations in rural and urban settings, it also represents varying cultural provision and the varying commitments of individual authorities to the provision of cultural services.

In 2003/04 this ranged from £1,658,000 to £55,794,000 in total spend and from £149 down to £20 in spend per capita. 16

3.4.4 Central government

Central government funding of culture in Scotland 17 is a complicated matrix, with funding provided by a number of government departments and agencies to a diverse range of NDPBs and other sponsored bodies, each with their own remits, roles and priorities. These in turn distribute funds to the sectors in a wide range of forms with everything from core funding of performance companies to start-up advice and training schemes.

The Cultural Policy and Architectural Policy Divisions in the Tourism, Culture and Sport Group of the Scottish Executive manage most of this sponsorship, but Historic Scotland, an Executive Agency, also has a significant budget dedicated to heritage activity and some of that is cultural spend. Scottish Enterprise also funds a number of projects primarily through creative industry clusters and Local Enterprise Companies, although this is usually project funding for proposals, which may have a cultural dimension but primarily aim to stimulate economic growth or regeneration and so has not been included. The Commission is also aware that other government departments (Development, Health) and Agencies (such as Communities Scotland) are funding projects that have a cultural dimension, although such 'cross-cutting' investment is often hard to identify.

The total grant-in-aid in 2004/05 to NDPBs in the cultural sector was £139.8m. This figure includes some 'cross-cutting' expenditure and the sponsorship to Historic Scotland but does not include support for Scottish Enterprise. Excluding Historic Scotland's grant-in-aid, the figure is almost exactly £100m. Adjusting for inflation, revenue grant-in-aid to the cultural sector has increased 33% between 1997 and 2004/05, moderately from 1997 onwards and more significantly from 2002/03. Investment in capital projects over the same period has totalled nearly £89m and has included major projects and acquisitions such as the new Museum of Scotland, the Playfair at the National Galleries and the purchase of the Murray Archive.

Increases in revenue funding have not been shared evenly throughout the sector, with by far the largest increases going to the Scottish Arts Council. However, this includes substantial amounts of restricted money for the Youth Music Initiative and the National Theatre, which totalled nearly £15m in 2004/05. Historic Scotland and the National Museum of Scotland have also received significant increases since 2000 whilst other bodies have not fared so well with only inflation level increases or, in the case of Scottish Screen, a moderate decline in real terms between 2001 and 2004.

Cross-cutting policy, delivering multiple policy aims simultaneously, is becoming increasingly important. In January 2005, the Scottish Executive Cultural Policy Department published a report of cross-cutting policy involving cultural initiatives, highlighting developments in Health, Communities, Enterprise, rural affairs, Justice, Transport and Education. The report identifies over £1.4m worth of cross-cutting projects and initiatives and the consideration of many future actions. 18

3.4.5 Comparisons with cultural funding in England and Europe

Scotland has lagged behind the comparative increases in England in investment in cultural services since 1997. For example, by 2007 the Department of Culture Media and Sport ( DCMS) increase in grant-in aid to the Arts Council England ( ACE) from 1998/9 will be 215% in cash terms. The comparative figure for the Scottish Executive's grant-in-aid to the Scottish Arts Council ( SAC) is 209%. By excluding the ring-fenced project funding to SAC (Youth Music Initiative, National Theatre etc) and ring-fenced funding to ACE (Creative Sparks) the gap in SAC core funding needed to restore parity with England is £10.5m. 19

The disparity in funding patterns between England and Scotland is particularly reflected in the case of theatres, an issue brought to the Commission's attention in a number of consultation responses. To match the provision in England and Wales would require an estimated additional £2m per annum. 20 In addition, central government expenditure on arts and culture in Scotland lags behind that of many of our European partners. 21

Expressed as a percentage of the overall Scottish Executive Budget, the funding allocated to cultural services is very small. At the highest point in 2001/02 this represents only 0.47% the Executive's budget; even if we include the substantial budget provided to Historic Scotland, of nearly £40m in 2004/05, this figure is still only around 0.6% of the total Scottish Executive budget. The disparity between funding for culture and for other public services is significant. In 2004/05, Health will receive £6.4b or 27% of the total budget; Education (central funding) £559m, 2.3% 22 and Justice £1.29b, 5.4%.

3.4.6 National Lottery

The National Lottery was received as a very welcome addition to government funding for good causes. 23 When it was established, 16.5% of the total National Lottery Distribution Fund was allocated to the Arts. The Lottery has raised more than 17 billion pounds in total for good causes. The Scottish Arts Council has distributed over £211m to 6,443 projects and the Heritage Lottery Committee for Scotland has distributed £385m to 1,900 projects in Scotland between 1995 and 2005. 24

Lottery funding has been distributed by a number of bodies in Scotland. The principal cultural bodies distributing funds are the Scottish Arts Council, Scottish Screen and the Heritage Lottery Scotland. Scottish Arts Council National Lottery Grants peaked at £36m in 1998 and then declined sharply to £13.6m in 1999, since then they have risen and peaked again and then declined to £18.16m in 2003/04. Scotland has also been successful in securing funds from the nationwide streams such as the Heritage Lottery Fund, the New Opportunities and the Millennium Fund.

However, it is almost universally accepted that Lottery awards for the cultural sector are declining in parallel with the decline in National Lottery income. Recent developments, such as the inclusion of further categories of good causes by government, indicate that a lower proportion of a lesser sum from the Lottery will be available to support cultural activity in future.

3.4.7 The private sector

Scottish cultural organisations receive the most business investment in the UK outside of London and represent eight per cent of the total UK business investment in the cultural sector, however the bulk of this comes from a very small number of businesses and these are almost wholly Scottish based. There are few non-Scottish headquartered companies sponsoring cultural activity in Scotland on a regular basis. Orange is a notable exception, as is Sony with the National Centre for Photography. 25

Sponsorship rose between 1997 and 2000 due to major capital projects, the most significant of these being the new Scottish Museum and the Playfair Project at the National Gallery. These rises may suggest that National Lottery and other funding may help to lever business sponsorship, although there may be a limit to how many major projects the private sector can be asked to support. The cultural areas, which receive the majority of sponsorship, are the Edinburgh festivals, other Scottish festivals, major visual arts exhibitions and Scotland's national companies. Lump-sum corporate donations and memberships have declined.

There is a strong shift from cash sponsorship and sponsorship of art for 'art's sake' towards a more strategic approach and commercial returns. Shareholders have begun to question sponsorship if no clear business benefit can be proven and larger companies are tending to limit their sponsorship to existing partners. In-kind sponsorship continues to play a vital role, although it is very difficult to track. Time given by business people on a voluntary basis through service on Boards or through provision of advice or support continues to be important.

3.4.8 European funding

The major funding stream of European Union funding for culture has been the Culture 2000 programme currently worth â'¬167m per year. The programme has a requirement to have at least three international partners and Scotland has generally not been particularly successful. Since 2000, only four projects were initiated by a Scottish organisation, with Scottish bodies as a co-organiser in four and as an associate partner in a further four projects. Culture 2000 will be renewed and become Culture 2007. The overall scheme will become more flexible, but the requirement for a minimum of three partners will remain.

The EU also runs the European Capitals of Culture and Inverness made an unsuccessful bid for 2007. They also run the Media Plus programme for the audiovisual industries. Scotland has done relatively well from the Media Plus programme with nearly £6m worth of support for production, distribution, exhibition and training since 2001. 26 Other EU funds have been adapted for cultural purposes and the Commission is aware of a number of projects funded under the European Social Fund, including the Connector Project.

Social funds and structural funds are set to decline with the redesignation of priority areas following the accession of the new member states. This decline will also be reflected in the Media Plus funds, which will be based on the production status of individual member states as a whole, regardless of the situation within regions within any member. It is predicted that because of the strength of the British film industry, largely based in London, there will be less money available in Scotland.

3.4.9 The voluntary sector

The voluntary sector plays a vital role in delivering and supporting cultural activity. It is difficult to map the sector fully, due to its diffuse nature, to the level and quality of information currently available and the lack of a coordinating body for the whole sector. Research was commissioned which identified over 4,500 groups in a wide range of cultural activities from archaeology through to arts, dance and opera, and this figure only represents a portion of the overall sector. 27 A copy of the full report can be found on the Commission's website www.culturalcommission.org.uk .

Research undertaken by the Scottish Council for Voluntary Organisations ( SCVO) showed that arts, sports and culture made up 40% of voluntary organisations (estimated to be around 50,000 in total), making it the largest segment of the voluntary sector in Scotland. 28 It also has the highest number of volunteers, 38% of what Volunteer Development Scotland estimated to be a total of 1.76 million adults (the next being the care sector with 18%). However, in 2001 SCVO estimated that these groups received only 13% of the income distributed within the voluntary sector.

Activity Chart

The range of activity reflects the diversity of the voluntary sector and, whilst groups tend to cluster towards large performance activities, the responses reflect the healthy diversity of activity. The main purpose given by most groups was 'social', but a third of all groups identified artistic development and education among their main purposes, with a quarter stating their main purpose is preservation or conservation. This reflects a very close alignment with the strategic priorities of the Scottish Executive's National Cultural Strategy and of the strategic functions of bodies such as the Scottish Arts Council and Historic Scotland.

The study attempted to gauge some basic outputs, and these included:

  • over 250,000 members

  • 3 million attendances at activities, events and facilities per year

  • over 35,000 regular meetings and 9000 special events

  • this equates to 100+ cultural opportunities being provided by voluntary cultural groups in Scotland each day of the year.

It also sought to understand the motivation for people taking part in such group activities, and for giving significant contributions of time, effort and work:

Reasons for Involvement Chart

In addition, the study also identified the wider benefits that such bodies brought to communities and to the cultural sector in general.

Benefits Chart

Professional cultural sector organisations are often dependant on voluntary staff who volunteer labour and skills and help fundraise and staff major events, all vital contributions to the cultural sector. Most bodies rely upon their own activity (membership, fundraising, sales, admissions) for the majority of their revenue, with the most likely source of funding to be local authorities followed by National Lottery/Awards for All. 38% of respondents were not dependent on any support and were entirely self-sufficient.

3.5 The social impact of the cultural sector

It is now well established that engagement in cultural activity, particularly through participation, brings significant social contributions. The range of positive impacts include:

  • increasing confidence, creativity, human growth and transferable skills, by providing personal insight and inspiration

  • stimulating regeneration by improving communities and community pride

  • improving collaboration and teamwork, thus contributing to well-being, quality of life and health

  • improving educational attainment

  • encouraging diversionary activity and supporting crime prevention

  • increasing employability and encouraging volunteering.

Fèisean nan Gàidheal

The Fèisean movement is Scotland's largest community based and community lead arts organisation which provides a range of annual festivals throughout Scotland and ongoing Gaelic arts tuition. More than 3,500 young people currently participate in the 37 Fèisean which take place annually with over 450 tutor posts being provided by Fèisean Gaelic music festivals.

80% of participants in a range of arts projects including the Fèisean Gaelic music festivals said that they felt more confident as a result of their involvement in the arts. 73% of the young people participating in the event reported boosted confidence.

Sources: Use or Ornament: The Social Impact of participation in the Arts, Matarasso F. (1997) Comedia quoted in Arts & Business advocacy document (2003) Comedia

To date, however, research has not been able to demonstrate a causal relationship between participation and social outcomes. Defining 'social impacts' and measuring this in a robust way has proved difficult. A recent research review for the Scottish Executive concludes:

Participation in cultural and sporting activities has been shown to result in the gaining of new skills, improve informal and formal learning, increase self-confidence, self-esteem and a feeling of self-worth, improve or create social networks, enhance quality of life, promote social cohesion, personal and community empowerment, and improve personal and local image, identity and a sense of well-being. 29

3.5.1 Developing performance indicators

The Centre for Cultural Policy Research has been commissioned by the Scottish Executive Cultural Policy Division to assess the impact on quality of life and well-being of participation in sports and cultural activity, with the aim of developing performance indicators. They are due to report in September 2005. The Office of Chief Researcher and the Strategy Unit have also been considering the concept of well-being in Scotland at a more general level. Much work is being done elsewhere into establishing ways to asses the effect of cultural participation or interventions. These developments will need to be considered when framing a method to measure and assess culture, an issue dealt with in more detail in Section 9 of this report.

Culture has become a cornerstone in regeneration and has been able to attract people who would not otherwise have participated in such activities. Regeneration is not just physical transformation; culture can transform communities. Projects can stimulate economic investment, and the ability of culture to be at the heart of regeneration has been demonstrated by a number of research studies. 30 The following case studies provide evidence for the range of social impacts of cultural activity.

Culture and regeneration

Information collated in an evaluation of regeneration projects in Glasgow (the Castlemilk Arts and Cultural Development Office), Edinburgh (Fireworks project in Wester Hailes), Dundee (partnership for arts) and South Uist (the Ceolas project), has demonstrated that culture played a key role in personal and community development as well as improvements in the local economy.

Specific outcomes included:

  • in the Castlemilk scheme in Glasgow, five out of the seven participants interviewed in 2001 believed that being involved in the arts project had helped them get a job or move into training

  • the participants in the Fireworks project in Edinburgh felt they had become more confident, more interested in learning, had a chance to do new things, made a positive contribution and made new friends

  • in Dundee, 29 out of 32 stakeholders questioned believed that the arts projects had had a positive impact on the quality of life for individuals in Dundee and had improved the image of the area

  • in South Uist, 80% of the local volunteers on the Ceolas project thought that the image of the area had been improved as a result, and they reported a positive impact on their own lives and skill development.

Source: The Role of the Arts in Regeneration, Blake Stevenson Ltd (2000) SAC/Scottish Executive

Hythehill Happening, Lossiemouth

Hythehill, an area of Lossiemouth, had been subject to vandalism, in particular the Primary School. The Local Community Network made up of local housing associations, head teachers, health visitors, social work, community development, arts and sports development and police invited Moray Council's Arts Development team to consider a new approach to tackling anti- social behaviour.

The result was a cultural event involving music and interactive experimental video art, not advertised but spread by word of mouth between local young people. Over fifty 12-16 year olds attended the event in November 2003, most of them socially excluded. Originating in one part of Lossiemouth, it then engaged other young people from other areas throughout the town, allowing these young people to interact with their peers and with their rival groups.

As a result of the initial event, the young people recreated a similar event, focusing on video, dance and music. This experience allowed these young people to feel confident and to develop new skills.

Significant outcomes of the project include:

  • attendance and engagement of young people who would not normally have participated

  • reduction in vandalism and truancy in the area

  • greater awareness and better understanding between young people

  • new-found self-respect for all involved and new friendships created between previously rival groups

  • improved relationships with parents and/or guardians and less concern expressed by adult residents about young people's behaviour in area

  • a performance for the BBC at the Spiegeltent during Edinburgh Fringe 2004

  • strong desire for the young people to continue to develop their new creative skills.

Adapted from Moray Council's Arts Development Submission to the Cultural Commission

3.6 The economic impact of the cultural sector

Although a range of relevant data on economic impact is being collected by various bodies, a comprehensive assessment of overall economic impact and employment in Scotland has not yet been carried out. This section gives an overview of the level of contributions from a number of sectors and gives some examples of the economic impact of a number of key events, including the annual Edinburgh Festivals and the MTV Europe Awards.

The following analysis is based on a Scotecon report 31 and data refer to the financial year 2002/03.

3.6.1 The arts sector

Despite being classified as a 'subsidy' sector, the arts generate considerable levels of earned income. As expected, this varies greatly from art form to art form but both festivals and drama produced more than half of their own income (festivals 64.3%, drama 53.3%). There were also a number of sectors where revenue was not far behind grants (literature with 45.3% and arts centres with 43.5%). The overall levels were 43.9% of revenue coming from grants, 42.2% earned income and 13.9% from local authorities.

It is estimated that the SAC's core funded arts organisations support 4,026 full-time jobs, with 1,821 being 'indirect' employees in associated industries. The arts sector spends considerable sums on a range of services from premises, equipment, artistic activity, marketing, education, IT and retail. The sector also spends significantly on staff wages. Of this expenditure, it is estimated that 97.8% is spent in Scotland.

By assessing the income of these organisations and the additional income created in other sectors of the Scottish economy, Dunlop, Hamilton and Scullion concluded that a multiplier of 1.87 could be attributed to the arts in Scotland. This means that for every £1 spent on the arts an additional £0.87 worth of income is generated in other industries. This figure is higher than the multiplier used by the Scottish Executive for the Recreational, Cultural and Sporting Activities sector, which is estimated at 1.79.

The employment multiplier (the number of additional jobs supported) was estimated to be 1.83 (i.e. an additional 0.83 full time posts in other sectors of Scottish industry). This figure is again higher than the 1.66 Scottish Executive estimate for Recreational, Cultural and Sporting Activities and is also higher than Office Machinery (1.633), Retail Distribution (1.245) and Research and Development (1.283). It ranks 47 in the list of 128 multipliers that the Executive currently compiles.

3.6.2 Museums and galleries

Responses from the museums and galleries sector to Scotcon were very few, so the following section, which was informed by a publication from the Scottish Museums Council ( SMC) 32 must be considered as best estimates.

As expected, the museums and galleries sector is more heavily supported than the arts, with an estimated 91.5% of local authority museums funding coming from local authorities and 82.0% of national museums funding coming from the Executive. University museums and galleries had 64.7% of funding coming from 'other' sources, presumably from the host university. The percentages for independent museums reflected a more opportunistic approach with funding coming from whatever sources might be available.

The Scottish museum and galleries sector is currently estimated to support 3,285 people in full-time employment with 1,282 being in associated industries. Museums and galleries spent £29.5m with £11.6m going on goods and services and £17.9m on staff. Again, it is estimated that around 90% of this expenditure is spent locally in Scotland. Of the expenditure on goods and services, over 50% is spent by both national and local authority museums on premises. The employment multiplier for the sector is estimated to be 1.64 and the income multiplier to be 1.65.

3.6.3 Screen industries

Data for the screen industries are based on a recent audit of the screen industries undertaken by Scottish Screen in partnership with Scottish Enterprise, Highlands and Islands Enterprise and PACT. 33 The report estimates that the screen sector employs some 4,392 people in Scotland and that total 'content spend' is around £257.6m. Difficulties with data analysis restricted further analysis of economic impact.

3.6.4 Publishing

A recent study into publishing identifies sales figures of £188.5m and direct employment equal to 1,258 employees. 34 The study also provides a figure for the additional employment created by publishing of 754 jobs. This appears to be based on an expenditure multiplier of 1.3, which is drawn from ' DTI estimates of multiplier values across similar sectors', and an assumption that turnover in companies supported by publishing is equal to £75,000 per employee. However it is unclear if these figures paint a complete figure, as they appear to account only for direct and indirect impacts, but not induced impacts.

3.6.5 Crafts

A study commissioned by the Scottish Arts Council ( SAC), SE and SE Glasgow 35 estimated the crafts sector generates between £95-£150m worth of turnover. This assumes that a total of 3,000 crafts businesses operated in Scotland in 2001. Using this information, it is possible to estimate that the sector would employ 10,357 staff. If this were correct, then crafts would employ substantially more than core arts sectors such as the Scottish Arts Council core funded organisations.

3.6.6 Music

A recent report 36 examines the wider music sector and includes activity supported through SAC core funded organisations as well as those involved in ancillary sectors such as rights and retail sales. In total, the report estimates that music employs a total of 2,679 full-time employees in Scotland, and generates £106m worth of income.

3.6.7 Cultural tourism

Tourism represents one of Scotland's biggest industries, with culture playing a significant role in attracting visitors. VisitScotland's data 37 suggest that over 40% of people go on holiday specifically for cultural activities, whilst a higher proportion takes part in some kind of cultural activity while on holiday. In 2002, tourism accounted for £4.5b in Scotland in 2002, including £811m by visitors from overseas. 74% of visitors cited an interest in history and culture and 58% of tourists visited museums, galleries and heritage centres.

Scotland's top paying attraction and top free attraction in 2002 were both cultural sites: Edinburgh Castle and Kelvingrove Art Gallery and Museum, respectively. The majority of tourism is made up from the UK market. In 2003 UK holiday makers whose main purpose of visiting Scotland was cultural tourism made approximately 700,000 trips and spent a total of £173m. 38

3.6.8 The Edinburgh Festivals

The City of Edinburgh Council, Event Scotland, Visit Scotland and Scottish Enterprise Edinburgh and Lothians are currently undertaking an extensive study into the annual Edinburgh Festivals. Initial reports from this study estimate the net economic impact of the 2004 Festivals at £135m of new expenditure for the Scottish economy with an income of £56m being generated and an estimated 2,900 full-time jobs being supported by the festivals. 39

3.6.9 MTV Europe Awards

The MTV Europe Awards, held in Edinburgh on 17 November 2003, were estimated to have generated £8.9m in direct economic benefit to Scotland. Edinburgh gained £6.4m extra expenditure, the Lothians benefited by £300,000 and Scotland benefited from another £2.2m of additional spend.

MTV's global networks screened 77 hours of coverage worth an estimated £8.6m. World-wide print media coverage in 2,094 articles carried by 928 publications in 19 countries had an estimated value of £4.8m. Hotels in Edinburgh received bookings valued at £2.2m and occupancy for the week rose by 9.4% to 83% compared with the same period in 2002, whilst 62.5% of retailers said the Awards would provide long term benefit. In addition there were 45 celebrity endorsements of Edinburgh and Scotland, which were considered to have 'huge value' in reaching younger audiences and promoting the city and Scotland. 40

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Page updated: Thursday, September 1, 2005