Holyrood committee warns culture funding crisis ‘has not abated’ despite SNP pledge

A report from Holyrood’s Constitution, Europe, External Affairs and Culture Committee has issued a warning to ministers that the “perfect storm” facing the industry has not alleviated.

Last year, the cross-party committee of MSPs found that the existing budgetary challenges facing the culture sector had become “much more acute”, caused by a “perfect storm” of long-term budget pressures, reduced income generation, and increased operating costs.

But 12 months on from that initial warning, the committee have concluded that “this ‘perfect storm’ has not abated, with external and public funding pressures maintaining, and the culture sector remaining under significant financial strain and the risks to its future becoming more severe”.

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At the same time, the committee recognised that the Scottish Government continues to face a “challenging fiscal environment”.

A key finding by the committee was that there was an “urgent need” for the Scottish Government to restore the confidence of the culture sector as it continues to face significant pressures on its budget.

First Minister Humza Yousaf has committed to increase the Scottish Government’s investment in culture and arts by £100 million over the next five years, but the committee is still awaiting detail about this.

The committee has also found that both the initial cut to Creative Scotland’s grant-in-aid for 2023-24 in the draft budget and, after it had been reversed, the reinstatement of that cut in the autumn budget revision had “damaged an already fragile confidence” within the culture sector.

Organisations receiving regular funding from Creative Scotland would not receive a budget reduction during 2023-24 as a result of the cut, with some of Creative Scotland’s National Lottery reserves having been allocated to offset it. 

But the committee has asked for further clarity on the extent to which the use of these reserves will have impacted the level of funding available to manage the transition to Creative Scotland’s new funding programme.

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The report also considered what progress the Scottish Government had made in the last 12 months in taking forward innovative funding solutions in response to the challenges facing the culture sector, including government commitments on multi-year funding and cross-portfolio funding models.

MSPs have highlighted that “very limited progress” had been made and called for “much greater urgency and a clear pathway to make tangible progress” on implementing these funding models.

Committee convener, Clare Adamson, said: “The First Minister’s recent commitment to increase the Scottish Government’s investment in arts and culture by £100 million over the next five years comes as the committee has been hearing from stakeholders across the culture sector of the significant financial challenges it continues to face.

“We heard that the ‘perfect storm’ facing the operating environment of the sector has not abated over the last 12 months, with external and public funding pressures maintaining; and that there has been very limited progress made on implementing innovative funding solutions to support the sector.

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“Given this context, there was an urgent need for the Scottish Government to restore the confidence of Scotland’s culture sector.

“We look forward to receiving further details of the First Minister’s commitment to provide additional funding for arts and culture.”

Speaking at the SNP conference in Aberdeen last month, Mr Yousaf said that “by the end of the five years, our investment will be £100 million higher than it is today”.

SNP Culture Secretary Angus Robertson has conceded that it was an “incredibly challenging time” for the sector, adding that the FM’s promise of more funding “not only responds to these pressures but signals our ambition”.

He said: “For now I can say the increase will start from next year, with further detail to be set out in the upcoming budget through established processes.”

He added that while funding for Creative Scotland had been reduced this year, the Scottish Government had provided the arts organisation with £33 million over the last five years to make up for shortfalls in the lottery cash it receives.

A Scottish Government spokesperson said: “The Scottish Government investment in arts and culture will increase, so that in five years our investment will be £100 million higher than it is now.

“However due to the cost crisis we have had to make difficult choices to live within our largely fixed budgets. Our ability to respond to the cost crisis is limited by the inactivity of the UK Government and the financial restrictions of devolution.

“We will continue to do everything within our powers and resources to help those in the culture sector most affected by current economic challenges.”