Constitution, Europe, External Affairs and Culture Committee

Meeting date: Thursday, January 19, 2023

Official Report 633KB pdf

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Budget Scrutiny 2023-24

I give a warm welcome back to everyone. We now move to agenda item 3. As part of our budget scrutiny, we will take evidence on the culture portfolio spending for 2023-24. We are joined by Angus Robertson MSP, the Cabinet Secretary for the Constitution, External Affairs and Culture. He is joined by Rachael McKechnie, deputy director of major events and themed years in the Scottish Government. Thank you both for coming this morning. Cabinet secretary, I invite you to make an opening statement.

Good morning, convener, and thank you for the opportunity to make some opening remarks. I think that we all agree that the Scottish Government’s budget for 2023-24, which was published on 15 December last year, takes place in the most turbulent of economic and financial contexts that most of us can remember.

As the Deputy First Minister set out in his introduction to the Scottish Government’s budget, the cumulative effect of war in Europe, surging energy prices, raging inflation and damage to labour supply and trade due to Brexit, along with the United Kingdom Government’s spectacular financial mismanagement, creates the most difficult set of conditions in which to set a budget.

I must stress that our ability to respond to the cost process is limited by the inactivity of the UK Government and the financial restrictions of devolution. Our budget is largely fixed, our reserves funding is fully utilised and we have no ability to borrow to increase our day-to-day spending.

Since I last appeared before the committee, we have continued to work with the culture sector to identify barriers to immediate and long-term recovery. The Scottish Government has now convened hybrid round-table meetings with the culture sector in Glasgow, Inverness and, yesterday, Dumfries. In addition, we convened a round-table meeting last November with culture sector public bodies. Those meetings have helped to explore ways in which organisations can best work together to develop shared solutions.

I want to reassure the committee that we have been listening to the intelligence that the sector has provided at those meetings and that we will continue to do everything in our powers and resources to help those who are most affected by the economic crisis.

The 2023-24 budget required us to make extremely hard decisions and to prioritise spending. As I said in my response to this committee’s report on culture funding, we will invest £278 million in Scotland’s culture and heritage sector next year. That will include continued investment in Scotland’s screen industry, with £9.25 million for Screen Scotland, and investment of £72.7 million for Historic Environment Scotland to ensure that it can continue to care for our heritage in communities across Scotland.

We are providing an additional £2.1 million to support increased costs in the national collections. We are also committed to maintaining spend in other areas of the culture budget, including museums, public libraries, the national performing companies, youth music and community-based culture.

Those commitments have required hard choices to be made. Over the past five years, we have provided Creative Scotland with more than £33 million as an additional element of funding in response to a downward trend in arts funding from the National Lottery Community Fund. At a time when we face incredibly difficult decisions about Government funding and with Creative Scotland able to draw on its accumulated lottery reserves, we have discontinued that element of funding. I am grateful that the Creative Scotland board took the decision on 19 December to use lottery reserves to guarantee to its regularly funded organisations that their funding will remain the same for the next financial year.

I know that the committee has concentrated on the culture budget in its pre-budget discussions, but I am also happy to answer questions on other areas of my portfolio, and I will touch briefly on external affairs and the referendum budget.

For external affairs aspects, international engagement continues to be essential to successful delivery of “Scotland’s National Strategy for Economic Transformation” and our net zero transition. We are committed to being a good global citizen and to playing our part in tackling global challenges, including Covid-19, climate change, poverty, injustice and inequality, particularly through our international development fund. This budget continues to support that important work.

One of the key priorities for 2023, to which additional funding has been allocated, will be the delivery of the new talent attraction and migration service, which will bring together and expand services for employers and individuals. The service will help employers to use the immigration system to meet their skills and labour needs. It will provide good-quality information and advice to people who are thinking of moving to Scotland or who have just moved here. Scotland must be able to attract people from all over the world to work and study without excessive barriers, and migration policy should support mobility, collaboration and innovation.

On referendum costs, to help our most vulnerable citizens, we intend to utilise the finance that had been earmarked for a referendum on independence—£20 million—to make provision to extend our fuel insecurity fund into next year. I stand open to any questions.

Thank you, cabinet secretary. Mainstreaming across different portfolio areas is one of the themes that has come out of our budget deliberations. Have the round-table meetings identified any other themes or commonalities with regard to how cultural organisations might be supported, albeit within the budget constraints?

First, the process itself has been exceptionally valuable, with significant levels of participation across the sector. It is a continuation of an approach that was taken during the Covid pandemic whereby having regular discussions with representatives from across the culture and arts sector meant that we were able to understand the themes, needs, interests, concerns and expectations of people in the sector. Obviously, during the pandemic, much of that was linked with the extreme circumstances of the lockdown and the income difficulties that individuals and organisations faced in the culture sector.

Now, we have obviously moved on, and organisations are able to perform and tour and people are trying to bounce back from the pandemic. A broad range of themes is emerging that still needs to be brought together in report form. We will, no doubt, be able to share that with you and other committee members. As you might expect given the range of participation, from individual freelance performers or people involved in other aspects of culture and the arts all the way to larger organisations, a very broad range of issues is being flagged up, which are reflective of the underlying factors. Incidentally, I should say that I also held a meeting with the national performing companies last week.

This is about how organisations can continue to operate in circumstances in which there is a squeeze on their income because they have perhaps not yet fully recovered to pre-pandemic levels in relation to the number of ticket sales or visitors. There are also the additional costs of heating overheads and inflation.

As we know, at a national level, inflation is officially at just over 10 per cent. However, we are hearing from participants that inflation in many areas that impact directly on culture and the arts can be a factor of that—I have heard figures of inflation of up to 30 per cent impacting on organisations. As one might imagine, those participants that have property—theatres and the like—have significant overheads that are squeezing their finances.

On top of that, some participants are reporting that other income streams that have traditionally played a significant role in their finances are also being impacted. The amount of financial support through philanthropy, for example, is proving challenging for some organisations.

Public funding is also of huge importance to the culture and arts scene in Scotland, as it is in most countries in the developed world. As we have discussed at committee before, one often hears the request for individuals and organisations to have the greatest possible certainty. We hear a lot of support for the intentions of the Scottish Government to support multi-annual funding horizons for individuals and organisations, which is the direction of travel that we are on.

A very strong theme that is coming back from all the meetings is that the culture and arts sector wants to work collaboratively through these difficulties. There is an appreciation that things will not improve in the short term, given the economic circumstances, and there is a willingness among those in the sector to consider what they can do. No doubt suggestions will also be made about what we, in the broadest sense—that includes the Scottish Government, agencies such as Creative Scotland, Screen Scotland and Historic Environment Scotland, and all the different stakeholders—can do to make sure that we get through this most extreme of circumstances, having protected and supported our culture and arts community.

One factor, which I have been hearing more of and on which we all need to reflect, is people saying that it was personally hugely challenging for them to get through the pandemic. Funding was available for that period, but, with the UK Government now ending that support, one hears people say that their level of personal challenge remains acute because of the uncertainty about the medium and longer term.

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We need to reflect on the pressures under which people are operating and the responsibilities that they have to themselves or to small or larger organisations. Everybody is cognisant of examples—I have seen some recently—of beloved organisations and venues finding themselves in existential financial difficulty, which is obviously making others concerned about what the future holds for them.

As soon as we work up a read out from those round-tables meetings, I will ensure that the committee is able to see it; together with the evidence that you have taken here, that will help your deliberations and ours.

Thank you very much for offering to do that for us, cabinet secretary.

I move to questions from the committee and invite Mr Cameron first.

Good morning, cabinet secretary. The committee warned of what we describe in our pre-budget scrutiny report as the “perfect storm” that the culture sector faces with the budget.

As we have seen, the budget for Creative Scotland has been cut by more than 10 per cent. The committee heard stark evidence last week from a number of witnesses, most notably Iain Munro, who is the chief executive of Creative Scotland. He warned that due to those cuts,

“a quarter to a third of the current 120 regularly funded organisations are at risk in the months ahead. If the cuts last into the years ahead and we do not have national lottery reserves to offset them and we end up passing them on to the sector, I estimate that probably no more than 60 out of those 120 RFOs will be funded.”—[Official Report, Constitution, Europe, External Affairs and Culture Committee, 12 January 2023; c 2.]

Why have you chosen to cut the budget for Creative Scotland, thus endangering the future of up to 60 of our cultural organisations?

First, I always listen very closely to what Creative Scotland says about the state of the cultural sector in Scotland. It is a hugely effective organisation that we are keen to support financially.

Your question conflates two different things. The first is the medium and long-term funding challenge that Creative Scotland and organisations and individuals in the culture sector might face because of budget constraints. It is important to understand, as I outlined in my introductory statement, that Creative Scotland is in a position to maintain its levels of funding this financial year, which will provide stability to regularly funded organisations.

The second thing, which I hear loud and clear, is the concern about the funding of organisations beyond that time horizon. That goes beyond just the RFOs—if there is a financial constraint, it impacts on a much wider scale. That does, indeed, concern me and I am keen to work with Creative Scotland on that issue to ensure that we can maximise the funding that is available to it.

As I have already made clear to the committee, there needs to be an understanding about the scale of the financial constraints under which the Scottish Government operates. If Mr Cameron is in a position to identify significant areas of funding that could be transferred from elsewhere in the portfolio or the Scottish Government budget, I would be happy to hear about that.

I appeal for the committee to understand that, given the level of constraints under which we find ourselves, it is a good thing that Creative Scotland is able to maintain its level of funding this financial year, and I will be working intensively with it to understand the dangers that it foresees in the years beyond the coming financial year, because I want Scotland’s cultural organisations to flourish rather than face the existential concerns that Iain Munro outlined to the committee, which are of concern to me.

Just to be clear, Iain Munro said that, even this year, using the national lottery reserves,

“a quarter to a third of the ... regularly funded organisations are at risk”.—[Official Report, Constitution, Europe, External Affairs and Culture Committee, 12 January 2023; c 2.]

I hear what you say about the financial constraints but, as you said in your opening comments, hard choices have been made. They have been made within the whole of the Scottish Government’s budget. According to an analysis by the Scottish Parliament information centre, only three portfolios have had a decrease in cash in real terms. One of those was yours. In fact, yours had the largest decrease of all the portfolios, both in cash and in real terms.

Within your portfolio budget, hard choices have also been made. You spoke about external affairs, which has had an increase, and culture, which has had a decrease. Last week, Moira Jeffrey, from the Scottish Contemporary Art Network, spoke about the jobs that are involved. She said, I think, that RFOs support about 5,000 jobs in direct employment, and that,

“once those jobs are gone, they will not come back.”—[Official Report, Constitution, Europe, External Affairs and Culture Committee, 12 January 2023; c 3, 2.]

In the light of that evidence, have you reconsidered the cuts to Creative Scotland, given the jobs that are at stake?

There are two parts to Mr Cameron’s question.

In understanding the budgetary process for this year compared with last year, it is important to know that the portfolio will not incur the same level of costs for the census. That is an important part of understanding the global budgetary position.

That anybody would face risks to their employment status in culture or the arts is of concern to me. As I have said to the committee before, an additional concern is that people will not become active in the sector to start with. It is not just about how the current economic pressures impact on organisations and people in employment; it is about those who might want to start a career in the culture sector.

I am extremely seized of that matter and I am doing everything that I can to underline that the cultural and arts community in Scotland is of import not just for art’s sake but as an extremely important part of our economy.

On Mr Cameron’s justifiable concerns, it is also fair to add that parts of the culture sector are growing considerably. Last year, for example, we learned that the screen sector’s value to the economy is more than £0.5 billion and that, on current trajectories, it will be worth more than £1 billion by 2030, with a significant increase in the number of people who work in that sector.

It is absolutely fair to point to the constraints and difficulties that have been caused by the broad economic circumstances and to Scotland’s budgetary constraints. However, at the same time, it is important to highlight that the culture sector is moving ahead in what are difficult circumstances; that some parts of it are doing extremely well; and that the Scottish Government and our agencies such as Creative Scotland and Screen Scotland, which have a responsibility to work with the parts of sector that are facing difficulties, do everything that we can to support those parts in these difficult times.

You touched on multiyear funding. In the 2021-22 programme for government, the Scottish Government committed to providing three-year funding settlements. However, in evidence last week, Sir John Leighton said that multiyear funding

“is highly desirable, but ... is not in sight at the moment.”

He said that, given that he had to set a budget now for the financial year that will begin in April,

“It is hard to imagine shorter-term cycles of funding.”—[Official Report, Constitution, Europe, External Affairs and Culture Committee, 12 January 2023; c 25.]

Is there any realistic progress towards multiyear funding?

Yes. That is constantly being worked on by culture officials, including in discussions with other parts of the Scottish Government.

There has been significant budgetary instability, if I can call it that, given the events of the past year. In particular, there has been tremendous budgetary instability in the UK Government. Given the constraints on us, and given that instability, one must make sure that, if and when one moves to multi-annual funding rounds, people can depend on the projections of their funding situation.

Given that instability and those constraints, it is understandable that more work needs to be done in that area, because, for the people who have been mentioned already and for many others, it is going to be a very important development—for the better, I hope. As I am sure that you have heard in evidence, many people who run extremely effective and efficient organisations have to spend what they view as a disproportionate amount of their time every year making funding applications and considering how to maintain their organisations. We understand that.

However, it would not be responsible to change from the current funding model to a new one until we can say with absolute confidence how that will work and what it will provide, and give people the certainty that they want. I want Mr Cameron to understand that we are committed to doing that. As soon as we are able, I will be happy to update the committee on how we will do it.

I am extremely keen to give the sector the assurances that, understandably, it has asked for, so that it can focus more on what it is supposed to do—delivering for our national cultural life—and perhaps spend less time on the annual cycle of financial applications and reviews.

Thank you.

Cabinet secretary, you mentioned the issue of where the money will come from. I note that solutions have been suggested, such as the tourism visitor levy; a percentage for the arts scheme, which your manifesto said could generate £150 million a year; and social prescribing. However, as with multiyear funding, those are not here now; potentially, they are years away. Does that not take us back to the perfect storm and the need to save organisations now? That came across incredibly strongly from Creative Scotland last week, and it has also come across from many organisations that have lobbied us individually.

I know that you will not be able to comment on the Filmhouse. However, to look at the issue, there were enough investor organisations to keep the Filmhouse going, yet it went straight into administration, with no public discourse and with nobody knowing about it. There is something about keeping our organisations open—keeping the “doors open”, as Sir John Leighton said to us in September. How do we support Creative Scotland now, rather than cutting it? There might be cross-Government support, such as business support and economic advice to organisations now.

Creative Scotland made clear to us that organisations will potentially go under without support now. Therefore, it is about two things: not only support now, in terms of funding through Creative Scotland, but advice and support to avoid that culture of doom that was talked about last week. How do we keep organisations going when there are potentially donors, funders and local organisations that, when faced with a crisis, would come together?

I know that you cannot talk about the Filmhouse but, with two weeks to go, there are people out there who have resources and would be up for saving that organisation. That issue is not just local but international, because of the Edinburgh international film festival. What do we do now?

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There is a lot in Sarah Boyack’s question and commentary, most of which I completely agree with. We have learned from the particular challenges and circumstances relating not only to the Filmhouse but to Dance Base. I think that Sarah Boyack, the convener and other members will appreciate that, as a constituency member for Edinburgh Central, I am constrained in what I can say in general, but also in specific terms, because my colleague Neil Gray, Minister for Culture, Europe and International Development, takes the lead in those areas.

However, as I have discussed with Iain Munro and colleagues at Creative Scotland, speaking in general terms about the challenge to organisations, we will all need to have much more, and earlier, insight into any particular concerns about organisations. If one wants to maximise the potential intervention and support that Sarah Boyack has highlighted—I concur with her that there are a number of sources—one needs to be able to do that before organisations get to a stage where they cannot trade. That is just a statement of fact. If organisations get to a stage where they announce that they cannot trade, it is beyond anybody’s ability—whether that is Creative Scotland or the Scottish Government—to help to maintain those organisations.

At that point, there is a legal process and administration, so there is another set of challenges and potential interventions but, in some respects, the ability to keep organisations standing and going is reduced. I have discussed the issue with Creative Scotland, which is much closer to the organisations, because that is its role. Members will appreciate that the reason why we have a culture and arts organisation such as Creative Scotland is because it is not for ministers to micromanage the interface with individual organisations. However, there is a general understanding that we need to know where the greatest risks are.

Donald Cameron mentioned the evidence that Iain Munro gave to the committee on his concerns about specific organisations. In and around that space, if it is necessary to help, assist or support particular organisations, I am keen that we are able to do that, and I use that “we” in the sense of Creative Scotland, the Scottish Government and other agencies. It will take a cross-agency approach to make sure that we do that as properly as possible. I think that time is the key thing in understanding that.

Members will appreciate that it is not something that I will keep a running commentary on, for the very obvious reasons of commercial sensitivity, but that process is already happening, and organisations have been able to make changes with the support of others, because people have put up their hands in time for other bodies to intervene and support. In certain cases, organisations have been able to make the most of, for example, the philanthropic support that they have received in the past and have been able to secure that in order to continue operating in the circumstances in which they have found themselves.

Following on from that, it is about what practical support could be available now. There is support for organisations through Creative Scotland. It is clear that it is difficult for organisations that are using reserves, because they have those reserves for very good reasons—they could be about the organisation’s legal obligations, for example. The issue is about support for them now. Going back to the cuts to Creative Scotland, it is about that message of health and wellbeing, jobs, economy and tourism; it is about not only the cultural aspect but the wider impact on the economy.

I will broaden that out to look at our big five cultural organisations: Scottish Ballet, Scottish Opera, the Royal Scottish National Orchestra, the Scottish Chamber Orchestra and the National Theatre of Scotland. They have had standstill budgets since 2016-17. How do we support our organisations now? Part of that is through funding, but part of it is through challenging Covid hesitancy, which Donald Smith spoke about last week. What is the Scottish Government doing to get people back into culture? We have a cost of living crisis, but what more could the Scottish Government do now to get people back into culture and to support those organisations now?

Specific funding has promoted public support for a return to the arts. That has already been happening. People have their own degree of hesitancy for their own reasons. We therefore need to build confidence, and our cultural organisations have been doing a superb job in giving people assurance and reassurance about why it is safe to return to galleries, theatres and other venues and events.

Can more be done? Absolutely. I am looking forward to going to the opening of Celtic Connections tonight, and I unashamedly use this opportunity to say to anybody who is watching that they should take the opportunity to support events such as Celtic Connections. Where tickets are available, please attend theatres and festivals and events. That is my first observation—that there has already been support for that, but more can absolutely be done.

Sarah Boyack asked about a number of other points in her previous question, which, if she will forgive me, I was not able to come back on. She asked about potential new funding streams or different ways in which resource could be allocated. Notwithstanding all the pressures and constraints, we in the Government are still keen to make progress on that. She mentioned a percentage for the arts scheme, the visitor levy and a better understanding of how social prescribing can operate. Those are all absolutely under on-going discussion in Government and across portfolios, and we will report to Parliament on that in our culture refresh in the spring of this year.

Having said all that, I would not want to miss the opportunity to say that there is some extraordinarily good practice and progress going on. Sarah Boyack mentioned our national performing companies. I do not know whether everybody on the committee saw this morning the report on Scottish Ballet and what it is doing in relation to health and wellbeing, which is exemplary. Its dance health team is a UK first. Opening a national dance centre that will be aimed at helping people in relation to health and wellbeing, dementia and long Covid is exactly the sort of thing that we have been talking about in general principle terms, and which we are now seeing being taken forward. I am sure that there will be more of that.

To go back to the experience from the round-table sessions that we have been having, one of the participants in our Dumfries meeting—which I attended virtually this week—reported on the work that is under way in hospitals, nursing homes and care homes. It is important to appreciate that a lot of what we are aspiring to have even more of, in terms of scale and reach, is currently happening.

There is innovation and outreach, and culture is delivering much more beyond art for art’s sake and even the narrow issue of benefiting the Scottish economy; it is already delivering in areas such as health and wellbeing, which we talked about before. However, we want to widen and grow that, and, notwithstanding the constraints that we are working under, I am still very ambitious about helping to deliver that in a much broader way.

I welcome that response. I saw the announcement that you spoke about.

It would be good if there was something that we could look forward to, such as the acceleration of the tourist visitor levy or the introduction of a percentage for the arts scheme. However, the most recent response that we had from you on the budget said that that is years away, in 2025-26, so it is not a current solution. There is pressure on Creative Scotland’s budget this year.

I agree with Sarah Boyack that—I said this in my answer to Donald Cameron—bringing in innovation as quickly as possible is part of the solution to how we move from where we are currently to a better place where we have introduced other funding streams.

Incidentally, as I think I have mentioned to the committee previously, there is also an opportunity for greater coherence in philanthropic support for culture and the arts. There are tremendously generous individuals, trusts, organisations and private sector companies that do an incredible amount to support the arts. That is another area in which we need to work together across agencies, with Government and the philanthropic sector. For example, with the national companies, which have been mentioned, we can work on what we can do to support international and touring efforts.

There is a wide range of ways in which we can help and support. Some of those will require finance, but some will not, because they relate to the convening power of Government or agencies such as Creative Scotland, which need to think anew about how we do things. One of my biggest takeaways from speaking with the sector in the round-table meetings that I mentioned is that there is an understanding that doing nothing is not an option and that we will have to face up to the scale of the challenges.

I fully acknowledge Sarah Boyack’s point about Creative Scotland’s spending constraints, and what she said about reserves not being a long-term solution to such spending constraints. One challenge that we have picked up on in conversations with artistic organisations is that they have been spending their reserves and, when one is trying to proceed through a storm, it is a challenge if one’s ability to use reserves is denuded. However, without making the same point at great length again, we are not in normal financial circumstances, so we are going to have to find a way through the storm, and I am sure that we will do it. There are a lot of good examples of the innovation that is happening.

Incidentally, I should say that I am interested in hearing from others who face similar circumstances, and I was pleased to finally meet with the Secretary of State for Digital, Culture, Media and Sport for the United Kingdom, Michelle Donelan, who is my opposite number, a few weeks ago. She faces many of the same problems in her portfolio areas in relation to the funding of culture and arts and the same pressures, which people will be aware of, such as theatre closures in England, because of the same financial challenges, the post-Covid impact and so on.

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I am keen to work with colleagues not only in the rest of the UK, but further afield. Are others taking approaches that we can learn from? Alternatively, we may be doing things that we can share. I am keen to work in a collegiate way with colleagues, and I am happy to support the culture sector’s call with regard to the Treasury’s tax treatment of theatres and other venues. I discussed that matter with Michelle Donelan, and I have subsequently written to the Treasury to underline how important it is in the current circumstances that, when tax decisions are made, they do not worsen the situation.

Where it is possible to work together, I am absolutely up for doing that, and I am doing it. Where there are more opportunities to learn from elsewhere, I am keen to do that as well.

I just want to check that we have the same understanding of the pressures that smaller regularly funded organisations are currently facing, particularly in relation to reserves. Most of those organisations are charities and they are regulated by the Office of the Scottish Charity Regulator. If they dip into their reserves to a point at which they can no longer afford to make redundancy or pension payments, they will be acting outside charities law.

We are being told that that is an issue not for next year but for this year, even though there is some funding this year from Creative Scotland, which is coming from its own national lottery reserves, to keep those organisations going. Their boards are having to look now at their sustainability and whether they should keep going, even though they are currently getting money, because they are dipping into their reserves as a result of energy costs, having to pay staff an increase to meet the cost of living and other issues. Do you agree with that description? Do you understand the issue?

It is definitely on my radar screen. That is the reality that organisations are facing just now, which is why Iain Munro was right to highlight his concerns as a result of the feedback that he is hearing from the sector.

Different organisations are at different stages of financial challenge. That goes back to the point that I made to Sarah Boyack. Agencies—Creative Scotland, in this case—and Government can best help by having the best possible relationship with organisations that are going through those challenges so that there is some time available in which to understand whether and how it is possible to intervene.

Mr Ruskell is absolutely right to say that some organisations are facing existential concerns right now. He mentioned reserves; there are also other types of constraints and financial challenges, especially given the cyclical nature of significant parts of the cultural sector. At some times of the year, organisations take in money, and at other times, they make less money. There are all those complications involved.

That will be important not just for Creative Scotland and the regularly funded organisations, but for others beyond that. We should not forget that there are important cultural organisations and people operating in the arts community in Scotland who do not come under the RFO umbrella, and we need to think about them at the same time. The same applies there: how can we help everybody who is involved in the arts and the cultural scene in Scotland to give as much advance notice as possible of not only particular funding issues, but other problems?

Creative Scotland is very keen to help, as is the Scottish Government, along with the other Government agencies. Time is important, along with ensuring that we are aware of the scale of the challenge. That is why I gave the answer that I did to Mr Cameron at the start of the meeting. I recognise the scale of the pressures that the culture and arts community faces.

It goes without saying at great length that those pressures are also being felt elsewhere in the economy, beyond culture and the arts, but we are talking today about that specific area. One of the big jobs that we will have to do is to help regularly funded organisations and national companies, and we have made announcements about their funding, as well as those that are supported through other funding streams but are not RFOs.

That is good to hear, but I want to stick with the particular pressures that are being faced by regularly funded organisations and those that are in a similar position but get their funding from elsewhere. We heard last week about the disproportionate benefit that those organisations bring, and I want to relate that to the national performance framework indicators that the Government has set—attendance, participation, growth in the cultural economy and the number of people who work in the arts and culture.

Last week, we were told about an arts organisation that operates in Huntly that gets £100,000 a year. It supports 50 artists and puts on 200 events a year. It has a wider economic benefit and spin-off in that town and its surrounding rural communities. That organisation is hitting all the indicators and strengthening our performance in culture. Will there be an impact if even a small number of such organisations go to the wall?

There is a very strong case to be made that some of the biggest impacts might be felt through the endangerment of the smaller and smallest organisations. You mentioned a semi-rural community where there is a much smaller population, and that organisation might be the only arts and cultural outlet in that small community. If it was to close, there would be nothing.

Is that a serious situation? Absolutely—of course it is. It is therefore absolutely right that the Government is doing everything that it can for the directly funded national companies, that Creative Scotland is doing everything that it can for the regularly funded organisations, and that we are both doing what we can for the smaller organisations for which we have responsibility.

There is also a local government dimension to this. There is funding and support for culture from local government, and we are seeking to work more on that with our colleagues in the Convention of Scottish Local Authorities. For example, my culture minister colleague Neil Gray has been meeting culture leads.

We need to be cognisant of the value and the importance of art for art’s sake—I have now said that twice, because it is so important—but I think that we all agree that the economic and broader benefits that we have been talking about are the prize in linking culture with the wider governmental and societal benefits of mainstreaming culture. Going backwards is obviously not a good thing, so I am seized of ensuring that we have the time to consider where there are particular risks or warning mechanisms around particular groups or organisations, and the kinds of intervention that can be made to reduce those risks.

Will that be successful in all cases? I hope so, and I am certainly minded to work very closely with our colleagues in Creative Scotland and local government to make sure that it is.

We had some evidence from grass-roots music venues that there is a need to ensure that the big economic drivers, such as stadium gigs and big shows that are extremely profitable, transfer some of that wealth and value through to grass-roots music venues in particular. The same could be said for screen productions in Scotland. There is increased investment into Screen Scotland, which is great. It will certainly drive growth in the cultural economy, but how do we get the value from the big productions and the big gigs down into the grass roots again? It could involve ticket levies or some form of payment for those who are making Netflix movies in Scotland.

The first thing for me to say is that it is important to have an open mind about all those things. I certainly do, and I know that Creative Scotland is updating its funding approach, so I am sure that people there will have listened to the points that you have made. If there are particular suggestions, I encourage you and others with an interest in the matter to take them up directly with Creative Scotland, which has the responsibility. For understandable reasons, we have an arm’s length between Government and the funding of particular projects, who prioritises what one thinks is important and the relative value of all those things.

You talked about screen. I am struck that there have been some amazing box-office successes in big-budget film productions in Scotland in recent years. That is tremendous. It is a good sign of the ending of market failure in the screen sector here and a move in a positive direction. However, it is particularly heartening to note the success of more independent and smaller-scale productions at present. I give “Aftersun” as an example, which was voted best film of last year. It was supported by Screen Scotland. It was perhaps not considered by some to be a traditional box office-type film, but it was tremendous nonetheless.

There are benefits from having more screen output produced in different parts of Scotland. At present we can see—well, we can see it at any time, I suppose, because we can stream it—“The Rig”, which was shot in Leith. “Mayflies”, which is a tremendous BBC production by a Glasgow-based production company and a cutting-edge Scottish author, was, significantly, filmed largely in Ayrshire.

One great thing about screen going in the direction that it is going in is that it is getting to a scale where it goes beyond the studio space that we have and is filming in locations that are not traditionally film locations. That gives significant economic benefits to the areas where those projects take place. Screen Scotland and Creative Scotland absolutely think about how we can support culture and the arts right across Scotland, not just in larger population centres or where particular facilities are concentrated, and they are thinking about that at present.

I have one more question, which is about the world athletics indoor championships. The Scottish Government has largely funded the world cycling championships. My understanding is that there has been no contribution from the UK Government, even though the event will be seen as a Great Britain event that is hosted in GB. What about the world athletics indoor championships? Is the Scottish Government wholly funding that event or are there contributions from the UK Government? The championships will, again, be seen globally as a GB event.

I can speak more about the world cycling championships than I can about the athletics ones, but I will ensure that we update Mr Ruskell—who, if memory serves me correctly, asked a question about them at a previous committee meeting. He is absolutely right to draw attention to the fact that the Scottish Government is making significant financial contributions to the world cycling championships.

For those who are not aware of that event, I note that it will take place in Scotland. This is the first time that there has been an event of its kind. It will bring together the disciplines that exist in cycling as a sport, which will take place at the same time in different venues in different parts of Scotland. The event is going to be larger than the Commonwealth games, which is amazing. It will happen this year, and a lot of thought and effort are going into ensuring that there will be genuine community benefit and societal impact in encouraging people to get on their bikes. I confess to the committee that I may need to follow that injunction a little bit more myself.

10:45  

I chair the board that brings everything together, so I am closely involved in the event and I appreciate how big it is. Anything that can be done to magnify and support the understanding of it as an event that is taking place in Scotland would be much appreciated.

With regard to the specifics of the athletics event, I am joined by Rachael McKechnie, who works for the Scottish Government on the events side of things, and she may want to add to my comments. I am happy to write to Mr Ruskell. I appreciate that has made a point about why, if it is a GB event, the Scottish Government might be carrying substantial costs. I will update him on the situation in that regard.

We are involved in sporting events with the UK Government in other contexts. For example, the Euro 2028 bid, together with other home nations, is an area in which we are working with the Governments in London, Cardiff, Belfast and Dublin, and I think that we are making progress there.

I thank Mr Ruskell for the question. We are a contributory funder, rather than the primary funder, for the world athletics championships. Glasgow City Council is the primary funder, and UK Sport is also part of the coalition, which brings in the UK dimension. Our funding for the world athletics championships for 2023-24 will be £800,000. We can write to the committee and provide more information on the event, if that would be helpful.

I take the opportunity to support that event as well.

At the committee’s round-table session last week, I asked about the impact of the difficult decisions that have had to be made with regard to the culture budget, and particularly the impact on Scotland’s international standing. Sir John Leighton said in a previous evidence session that every piece of art or artefact that is loaned

“is a mini ambassador for Scottish culture.”—[Official Report, Constitution, Europe, External Affairs and Culture Committee, 29 September 2022; c 23.]

Last week, we heard evidence that touched on the importance of Scottish culture through tourism and international partnerships, and also more generally as soft power. Moira Jeffrey talked about being at the Venice biennale and about artistic collaborations.

I am interested in hearing what work the Scottish Government is doing in the light of the budget reductions to ensure that Scotland’s cultural standing is not lost from an international perspective.

I would love to do an entire session on that, convener, if a shortlist is ever put together for what the committee might want to discuss. I would be delighted to come back to speak about the subject at great length, because I spend a significant part of my time and effort on it.

I recognise the point that Jenni Minto makes. I am very much a glass-half-full person in that respect, and I believe that there are huge opportunities to build on the first-class work that is done by the likes of the national companies, which tour internationally, and by many others besides, who also tour and perform elsewhere.

How do we co-ordinate, work together and do as much as we can to support one another? In that respect, the Scottish Government has a role to play in funding, but also in convening and in respect of some of the assets that we have.

I will give a good example of how we are currently using those assets. Committee members will be aware that we have offices in a number of capital cities around the world, which are used, among other things, for cultural promotion. I was delighted to speak at Scotland House London at the launch of a report on Scotland’s arts and cultural assets, which I highly commend to members. I do not know whether members have seen both the documents that form that report, but they reflect, in significant part, on how Scotland is perceived in cultural terms and how it is that people are able to enjoy the broad spectrum of Scottish cultural offerings.

As an example of what is happening in this particular area, I note that that aspect was the subject of a conversation that I had with the national companies about tours that are taking place. There was discussion about a run of performances happening in Washington DC, and I am keen that we and the Scottish Government office do everything that we can to support that. It does not take a lot of imagination to understand the potential spin-offs for tourism in particular or the other forms of collaboration and co-operation that might emerge from that.

I know that that aspect has been thought about a lot in relation to festivals in Scotland, with regard to looking at how we ensure that we get maximum benefit from the shared experience of others and from those institutions that have international reach, including the Scottish Government, Scottish Development International and others.

I will be happy to come back to the committee to report on that work in greater detail. Work is under way in the Scottish Government specifically in relation to our international cultural priorities to ensure that we make the most of the cultural and artistic sector. Those in the sector are very keen to work with Government and agencies to ensure that we do just that.

That work will have an impact in different ways, because there are particular cultural focuses in different countries. That is one of the reasons why I was delighted to see a Scottish Government office open in Copenhagen in particular, because we can learn huge lessons—for example, in the screen sector—from what Denmark and the other Scandinavian nations have been doing. Those countries are around the same size as Scotland and they speak languages that are not as widely spoken as English, but they have been able to become incredibly successful.

Jenni Minto’s question opens up a broad range of opportunities and I am keen that we grab them with both hands. Money and funding is important in this area, but the intangibles are also part of the process. The good will and the willingness of organisations, host countries and organisations to play a part in it is hugely exciting, which is why it is hugely beneficial to have an international network and talented people who are there to promote Scotland in the broad ways in which they do that. Everybody else does it. We should be very proud of what is already happening, but we can do more to support the culture and arts sector both domestically in the UK and internationally.

As you will know, we heard from the ambassador for Sweden in our previous session today. I was struck by one line from her. She said:

“culture is what keeps things together.”

We need to remember that when we are looking at budgets and thinking about the importance of culture to the rest of the economy.

I want to follow up on the point that my colleague Mark Ruskell made about creative people coming up with different ideas in a difficult time. I think that it was Sir John Leighton who said that culture is the answer—it is a solution and an asset that needs to be exploited. Chris Sherrington suggested levies for tickets, but he also talked about—as you have touched on today, cabinet secretary—not only the importance, but the expense, of buildings. There are ideas coming up in England and Wales about owning our own venues, with communities raising funds for community benefit. Could you expand on that? You have talked about the round-table sessions in which the Scottish Government and your officials discuss with creative organisations how they can become part of the solution. Which of the ideas that you are thinking about could we run with?

First, that process is happening. Some conversations are happening directly: organisations might say, as the national performing companies did last week, that they would like to meet and discuss things from their particular point of view, given how they are funded and structured, and what it is that they do. Conversations are happening at that level.

Some conversations are happening through the round-table sessions, which involve everything from venues and organisations to other parts of our cultural and artistic community in its widest sense. Yes, that includes the performing arts, but we also discuss issues relating to design and architecture, as we did this week, and other aspects of the sector, such as freelancers and small organisations.

There is not a single aspect to that issue, nor is there a single solution to it. The solution will be multifarious, and we will have to be open to new ideas. I would be happy to report back to the committee when those different considerations and suggestions have been worked through. Some organisations in the sector will do some of those things themselves—they are doing them already—but others will rely on support and assistance.

One of the things that has struck me as interesting has been the number of times that I have heard people, during the round-table sessions, say to one another, “It’s really good that we’re meeting.” People are getting to know others who are involved in their world but whom they did not know before, and they are talking about what they are doing in their organisation, which can be shared. That is one of the intangible benefits of that kind of process. That reflects the great advantage of being in a country of Scotland’s size: it is possible to do that. We are taking a hybrid approach: a significant number of people are in the room, but others, often those from other parts of the country, can join those conversations, too.

The discussions are happening. As Jenni Minto has put her finger on, the solutions will largely come from the sector itself. As I have said to the committee previously, it is not the Government that does culture; it is the cultural sector and people in the arts community, although the Government and other agencies are there to, and can, support them. If there are ways in which the Government or other agencies can provide greater coherence, I am all ears, because we will all have to carry some of the burden of getting ourselves through these challenging times. If that means that we have to change how we do things, we should think about that.

My officials and I pore over the evidence that is given to the committee, but if you hear, through visits or other conversations, solutions of which, you think, we or other agencies are not aware, please ensure that we hear them. We need to look for good ideas, some of which might be new and some of which might be older. Especially at such a time—to quote somebody who has been part of the process—we cannot simply hold our breath and think that, in two months’ or two years’ time, it will be business as usual, because it will not.

There might be things that we can do relating to physical infrastructure and ownership, but I draw attention to the fact that we still had problems in Aberdeen in relation to the Belmont facility, which is within the purview of the council. Ownership might be part of the solution in certain circumstances, but the pressures are being felt by everybody, no matter the ownership structure or type of organisation. That reflects the point that the Government and agencies have to be nimble enough, with the notice that I am stressing, to be able to respond and provide the help, support and advice that we can.

There is a lot of help and support available. It is not simply what falls within the purview of my ministerial responsibilities. There are other Government agencies—for example, Scottish Enterprise and so on—that support the economy.

There are other agencies, other bits of the Government and other organisations. We just need to make sure that we are all part of the process. We are doing our best to do that. If anybody wants to be part of that and feels that they have not been part of it yet, they should let themselves be known. We are definitely interested in ideas, wherever they come from.

11:00  

You have mentioned the undoubtedly harsh budget context from the UK Government. We will talk about the culture part of that. You touched on how Creative Scotland might be compensated for reduced lottery funding. Will you say a bit more about what the Scottish Government has done in that area?

In terms of the lottery?

Creative Scotland pointed out the issue to us in previous evidence. Am I right in thinking that the Scottish Government has compensated it for generally reduced lottery funding?

Yes. Funding was put in place to make up for the reducing return from the national lottery to the arts. I should say that conversations are going on with funders such as the national lottery to try to ensure that we can protect the amount of funding that goes towards the arts.

Yes, funding was made available to Creative Scotland to offset what was going on with the national lottery. Creative Scotland was able to build up reserves as a result of that. Out of those circumstances, there will be funding stability through this financial year, but, as I have said to the committee, unless there is an economic upturn or an end to some of the financial pressures, there will still be a medium-term challenge beyond this financial year.

Have the decisions that the UK Government has made about ending Covid recovery funding and the timing of those decisions had any impact on the situation in Scotland and how you have had to respond to it?

It has been unhelpful to have a cliff edge in relation to Covid support funding. Given that everybody has been focused on trying to recover, bounce back and deal with the diminution of reserves that were spent before and during the Covid pandemic, the substantial ending of funding has been problematic. That was pointed out to the UK Government. There has been some intervention in relation to energy costs, but, again, that is coming to an end, although bills remain extremely high.

It is a matter of concern that, when we have all those pressures, the funding decisions endanger the ability of cultural and arts organisations to genuinely bounce back, because, as we have discussed at the committee, public behaviour, among other things, has not immediately snapped back to pre-Covid levels. Although we are seeing good returns from different venues in Scotland, including museums, we are still not back to where we were before.

We have not seen the economic recovery or the return of the public yet—we are encouraging that to happen as quickly as possible—but we have gone from Covid pandemic circumstances to the ending of funding before a recovery has taken place. That endangers the recovery, so it is problematic.

I would like to ask the cabinet secretary about Historic Environment Scotland, which currently has about 60 sites that are closed, or to which access is partially restricted. I expect that the number of sites to which access is restricted will reduce over the next 12 months. Do you concur with that? Can you commit to opening, or have you asked Historic Environment Scotland to open, a specific number of sites in that period?

I think that it is fair to put on the record, when discussing Historic Environment Scotland, that the Government has recognised the particular challenge that it is having to deal with, so the agency’s operational budget is rising by 18 per cent, to £114.5 million. That will play a part in the maintenance of property, but it is also for staff pay and a number of other important areas.

I am pleased not only at the good news about Scottish Ballet and what it is doing for health and wellbeing, but that we are beginning to hear some good news about various sites that are reopening. I see, for example, that St Rule’s tower at St Andrews cathedral is reopening on Friday 20 January. Every opening is a significant positive milestone for communities, for which a particular place will be of intrinsic, and tourist and economic, value. At the same time, however, as I am sure Mr Golden and colleagues will appreciate, it is important that Historic Environment Scotland reopens facilities only when it has confidence that the people attending those sites will be safe.

Mr Golden has asked me to give a number. I cannot give him one, but I will be happy to ask Historic Environment Scotland for the latest update on its facilities. In relation to the committee’s deliberations, with the subject of today’s session being where we are with the budget, the Government’s commitment in respect of the budgetary situation for Historic Environment Scotland reflects an understanding that reopening sites is a big challenge for the agency. It will be an on-going challenge, but I am glad that facilities are reopening. When that can happen safely, and as quickly as possible, it is to be welcomed.

I also want to ask about net zero and climate change, in particular with regard to building infrastructure and more sustainable energy sources in the cultural and heritage sector.

We heard from Alex Paterson that part of the problem is around skills. He said that we will not achieve what we want to achieve as a nation without the skilled people whom we need to deliver these things.

Another part of the problem is clearly about funding. Nonetheless, I think that there is a role for Government, through both feasibility studies and assessment, to assist the sector, and potentially to provide a road map for it that involves not only Historic Environment Scotland but the sector more widely so that, despite the budgetary constraints, we can begin to see what is possible. Have you given any consideration to that?

First, I note that that is an extremely sensible reflection on the circumstances in which we find ourselves. For the record, it is important that we understand the context of why meeting net zero and climate targets is so challenging in this area. We are talking about how we can, in large part, retrofit buildings and facilities that were built at a time when one did not even conceive of the climate and environmental challenges that we now face. How does one retrofit a castle, or an older building or facility, in a way—to go back to Mr Golden’s point—that can involve a workforce with the skills to be able to do that appropriately?

For example, Historic Environment Scotland still has stonemasons, to protect and restore historic buildings. One needs traditional, older skills, which are, perhaps, less a part of the mainstream economy. During the Dumfries roundtable, I heard about that in relation to leatherworking—again, a mainstream skill 100 or 150 years ago—which is now very much in demand both in the equine sphere and in fashion. It is a multibillion-pound industry.

I heard the point that was made in evidence to the committee, and I hear very much what Maurice Golden said about matching the skills to the requirement in that part of the sector. Given that that has just been raised with your committee, and that you are raising it with me now, Mr Golden, I definitely want to make sure that we do everything that we can to help those in Government who have responsibility for skills and training.

It is exactly the same as the opportunity/challenge that we have had in relation to screen. Suddenly, a part of the economy is booming and we require people who have the skills to support the industry. People need to be able to find the appropriate training courses, the opportunities to learn and the route map into that industry. There is a direct parallel.

I want to look into that more and I will be happy to report back to Mr Golden and colleagues. The point was extremely well made.

Thank you for that response, cabinet secretary.

Finally, I will ask you about climate change and the creative sector. Last week, Iain Munro of Creative Scotland said that the creative sector

“informs and influences public opinion and behaviours ... but ... we need investment to ... achieve that.”—[Official Report, Constitution, Europe, External Affairs and Culture Committee, 12 January 2023; c 39.]

How concerned are you about that statement?

I am concerned about anything and everything to do with global warming and climate change, and about whether we are doing enough. Undeniably, the arts and culture play an important role in helping to communicate that reality. During the 26th United Nations climate change conference of the parties—COP26—I saw a lot that involved artistic and cultural representation of the climatic and environmental circumstances that we face. It does not take a lot of imagination to see the role that that might play in schools.

That goes back to the broader point about mainstreaming culture and the arts across Government. Education comes immediately to mind. Perhaps Mr Golden has some other ideas. Undoubtedly, more can be done. That goes back to how we make mainstreaming work.

Nevertheless, quite a lot happens. That is a good thing. Perhaps we need to do more to publicise it. I will look at what Iain Munro said and will be happy to speak with him about whether, in specific areas, things are being missed in relation to which we can perhaps do more. I would be happy to look at that.

However, I get the impression that the issue is increasingly reflected in an arts and cultural context. Spoiler alert to anyone who has not yet seen “The Rig”—I am looking at you, Mr Golden; have you seen it?

Please do not give anything away!

Okay, no spoilers. It is safe to say that it is a cultural product—a series on a streaming platform—in which the climate dimension is inherently reflected in the storyline. That makes the point that culture has a really important role, which is to reflect the challenges that we face as a society and world. So, it is happening now. Can we do more? Yes. If Mr Golden thinks of any specifics that we need to do more or less of, or differently, I would appreciate him letting me know.

11:15  

Thanks for that, cabinet secretary. I think that you would make a wonderful new Barry Norman, if you do not mind me saying so.

Back to you, convener.

Thank you. I follow up on the line of questioning that was pursued by Ms Minto and Mr Golden. It is about a cut elsewhere, cabinet secretary, but you have mentioned the production of “Mayflies” as an exemplar from BBC Scotland. However, much concern has been expressed in the media by people who are key to our festivals and cultural output in Scotland—Tommy Smith, from the Scottish National Jazz Orchestra; Nicola Benedetti, who now leads the Edinburgh International Festival; and people from our piping communities—about proposed cuts to BBC Radio Scotland’s output in classical, jazz and piping music. If those cuts go ahead, what impact would they have on the ability for emerging talent and excellent exemplars of leading people in jazz, classical and piping music to be able to showcase their work and ensure the future of those areas?

One of BBC Scotland’s great strengths is its remarkably broad offering with regard to people’s tastes in music, sport, news or talk. It seems to fit in an amazing breadth of content. As a general observation, any reduction in that breadth has to be a matter of concern. Certain musical forms, such as piping or jazz, are not traditionally thought of as mainstream musical offerings, so where else on Scottish or UK radio—or globally, now that one has global access to radio in this digital age—will you hear Scottish pipe music and various forms of jazz?

I remember hearing BBC Radio Scotland’s pipe music programme coming on when I was growing up, and I like jazz—I should declare an interest as I went to school with Tommy Smith, who is one of our greatest musical exports. When people in the arts community say that they think that something such as that cut will have a major negative impact on performers and on a new generation of pipers and jazz musicians, that really needs to be taken seriously. I hope that BBC Radio Scotland will listen to what people have highlighted to it, and I look forward to being able to continue to hear—with a bit of luck—pipe and jazz music on BBC Radio Scotland.

I have a brief follow-up question, cabinet secretary. It was good to hear that you talked to local government representatives. Every time that I do that, they just remind me of the cuts that they have experienced over the past decade and of the fact that culture has taken the biggest cut. It would be very welcome if new items could be put on the agenda to support culture, and to support people in the cultural sector, and—reflecting on your last comments—artists in particular, to work in schools.

I should declare an interest in that I have friends who have worked as arts workers in local government. Over the years, before I had responsibility for this area in the Scottish Government, I saw the value of the jobs that they do, and what they were able to bring to kids in classrooms. I also saw the ending of that support—I am talking, in this context, about Morayshire; that was a hugely retrograde step, and I said so at the time.

I encourage colleagues in local government to try as best they can—as we are trying as best we can—to continue to support arts and culture. It is important for all levels of government that have a responsibility for culture and the arts to co-ordinate their work. That is why we are having this conversation, and the more of that, the better.

On that note, I thank the cabinet secretary and Ms McKechnie for their attendance this morning.

11:21 Meeting continued in private until 11:34.