Funding For Culture 2025-26 - Culture Counts' Evidence
Culture Counts have submitted evidence to the Scottish Parliament Constitution, Europe, External Affairs and Culture Committee’s scrutiny of the Scottish Government’s culture budget for 2025-26.
Our response builds upon our evidence and recommendations for the 2024-25 inquiry and to further inform our response, we asked our Core Members and wider culture sector stakeholders for views and information on a number of central issues (this blog post contains further contextual information). We are extremely grateful to all of those who engaged with this process, through providing evidence, joining discussions and to those who provided advance sight of their own responses to the consultation.
Our response can be found in full below. Our 10 recommendations for the 2025-26 budget for culture can be found here.
Culture Counts – Response to the Constitution, Europe, External Affairs and Culture Committee’s scrutiny of the Scottish Government’s culture budget for 2025-26.
Culture Counts is a network of over 70 arts, heritage and creative industries organisations from across Scotland. Our members are largely representative bodies, as well as some events and performing companies. We welcome the committee’s continued engagement on the issue of the future of funding for culture, which has never been more vital.
1. How should planned budget increases for the culture portfolio in Budget 2025-26 be prioritised to support improved cultural outcomes?
We welcome the opportunity to contribute to prioritising where increased budget in the culture portfolio for 2025-26 should be allocated and there is no lack of understanding by the sector of the current financial challenges facing the Government in setting budgets. However, the crisis facing Scotland’s culture sector is an immediate one. Culture Counts and sector colleagues have been warning of the ‘perfect storm’ that faces Scotland’s culture sector for the past two years. We are now sadly seeing what a lack of investment with over a decade of standstill funding coupled with the impacts of Brexit, the Covid-19 pandemic, high inflation, and the cost-of-living crisis really looks like.
The funding environment is extremely precarious with unprecedented pressures on Creative Scotland’s grants programmes. Levels of demand for the new Multi Year Funding Programme far exceed the funds available with no confirmation yet on what the budget will be. This year Creative Scotland (CS) will invest around £34m into regularly funded organisations, applications still under consideration for the next three years are sitting at £87.4m per year, suggesting that the result in October will be devastating for many. Those currently not in receipt of regular funding from Creative Scotland will have to wait until Autumn for decisions on grants starting in 2025 making this interim year incredibly tough, and for some, unsurvivable. In addition, the demand for Creative Scotland’s funding only represents one strand of their funding portfolio and does not reflect the need from their other programmes, which are also experiencing unprecedented levels of demand, or from the rest of the sector who seek funding outwith Creative Scotland’s remit.
Scotland’s culture sector is world class and attracts visitors in their millions every year. It supports jobs, generates income, drives innovation and has proven societal benefits from supporting health and well-being to social inclusion. However, the culture sector is a finely balanced and interconnected eco-system, so any losses have repercussions across the sector. Any organisation that disappears doesn't just leave a gap. It affects and changes everything connected to it. As cultural organisations fight for survival, we will see a growing impact on jobs, cultural services and in communities across Scotland. Large scale contraction, which is what we are effectively looking at, will have a systemic effect that can't be predicted or easily undone. Our artists, performers and freelancers are vulnerable, and some are choosing to leave the sector seeking more stability. Our reputation and ambitions as an international cultural leader are now at serious risk.
Through this Committee last year, Culture Counts called for a £104 million increase in 2024-25 to help mitigate the impact of the cost crisis, reduce the risks of venues, organisations and events closing down and secure a sustainable future for Scotland’s culture sector. Our evidence demonstrated the sector needed this level of investment in the 2024-25 budget to rebalance the gap from decades of under investment and standstill funding and provide the sustainability the sector needs. The Scottish Government responded by setting out its ambitions for culture and pledged support through committing to increase the culture budget by £100 million by 2028-29. Whilst this was hugely welcome, at this time we also saw the reinstatement of the 10% cut to Creative Scotland and whilst the 2024-25 budget increase began to draw down the £100 million, the budget included some investment which we would not consider to be ‘new’ money. This included the replacement of the 10% cut made to Creative Scotland and investment in CS programmes already committed in the previous year. In addition, any increased investment to Creative Scotland has not been passed on to the RFO network this year leaving huge numbers of organisations on standstill funding for yet another year. The sector needs to see the Scottish Government’s ambition translated into immediate action with as much of this funding made available now when it is most urgently needed to prevent the immediate threats that many organisations, workforce, and artists stand to face this year.
We also call upon the Scottish Government to confirm the funding commitment to Creative Scotland for this financial year’s budget including the reinstated £6.6 million and support for the Culture Collective and PLACE initiatives. Any in year cuts to Creative Scotland or any of the other national institutions and public sector cultural bodies will leave the £15.8 million depleted and the roll out of the additional £100 million way off track and at risk of becoming a hollow promise.
Whilst an additional £25 million is to be committed for 2025-26 the overriding priority is to secure the survival of Scotland’s arts and culture sector. Culture needs the conditions to thrive which relies on having a healthy and stable sector of people, artists, creators and makers who create culture and arts. Continued standstill funding and further cuts do not provide these conditions.
The current crisis can be easily averted with long term, stable investment and multi-year funding settlements which have the power to reverse the inflationary impacts of 15 years of erosion of culture budgets and ensure continued programme output and employment opportunities. The amount of funding required is tiny in comparison to other portfolios but will deliver huge impacts. The average spend on culture in other countries across Europe is 1.5% and Scotland’s investment of just over 0.5% of overall Scottish investment, finds it sitting near the bottom of these league tables. A target of at least 1% of budget allocated to culture, which this Committee has supported in the past, would demonstrate its value is understood and provide the support at a level that will enable it to flourish and play a central role in people’s lives across Scotland. Setting an adequate baseline of investment once established should have as a minimum index linked annual increases.
Ultimately, the budget comes down to choices by the Government and to date culture has not been a priority or received the investment at the pace or levels needed. The lack of available money to invest in the sector argument made by Government prevents meaningful engagement and discussion. The barriers to providing appropriate investment and a multi-year settlement are unclear given that the culture budget has represented such a low percentage of the overall Scottish Government budget, the risks to committing for at least three years are extremely low compared to the massive benefits this would deliver. The argument to prioritise public sector pay awards over culture has often been sited, however this lacks understanding that the culture sector is also largely a publicly funded sector which has similarly been on standstill funding and its workforce without inflationary pay increases for well over a decade. In addition, culture, unlike many other areas in the public sector, has a large freelance component meaning its workforce is much more precarious and vulnerable to external environmental challenges.
There is an urgent need to prioritise sustaining the sector over any new projects and initiatives, to invest in core activity, maintaining the infrastructure and capacity building and in supporting our workforce of freelancers and staff. Discussion with the culture sector is vital to ensure future investment priorities are identified and directed strategically to where they are most needed, can have the most impact and should be taken in a way which prioritises the long-term health of all parts of the culture sector. The whole sector must be considered beyond Creative Scotland, however as there are many who are not eligible (heritage and museums), fall between the cracks or are not of scale to be eligible for their funding programmes.
2. To what extent does the Culture Strategy Action Plan deliver the Committee’s recommendation that it should “provide a clear and strategic sense of how the Scottish Government is working to ensure a more sustainable future for the sector”?
As it states in the former Culture Minister’s foreword to the Culture Strategy Action Plan (CSAP) the Government’s mission is ‘to create the conditions for it to thrive.’
We were therefore disappointed to see the role of Culture Minister was axed in the First Minister’s Cabinet reshuffle questioning the commitment of the Government to the culture sector without a dedicated champion, particularly at this time of need. In addition, potential conflicts of interest in the Cabinet Secretary’s constituency, means some decision making relating to key areas of culture in Scotland’s capital will no longer be made within the Portfolio, if there is no Culture Minister to defer them to.
As Culture Counts has commented previously, the sector supports a Refreshed Culture Strategy Action Plan which puts audiences and artists at its centre and provides an inspiring forward-looking long-term vision and strategic approach to cultural activity, leadership, delivery, and investment.
The Plan published in December 2023, was welcomed as an opportunity to take decisive action backed by appropriate levels of investment. However, the Plan is largely reactive and does not provide the strategy or level of detail required to understand how the ambitions will be achieved, the timeline, budget or industry roles to implement, guide and monitor its delivery. We fear it will be a plan that will struggle to be delivered without a collective approach and doesn't effectively utilise the input of the many stakeholders who could be involved. The sector is best placed to deliver the objectives of the strategy and a plan to work with them to develop, deliver and record activity should be considered. A means of communicating activity and progress with the sector calling for input, evidence etc would be useful.
Whilst we are supportive of advocacy as a means to develop key areas, collaborations and to open up additional funding streams there is a significant focus in the Action Plan on the need to advocate and amplify the value of culture both within and across Scottish Government, and Local Authorities. We aspire for Scotland’s Cultural Strategy to be outward looking, ambitious and inspiring and not be detracted by actions to make the case for culture internally.
The Plan does propose to take forward a number of initiatives which we are supportive of such as the % for the Arts scheme, Visitor Levy Bill (now passed), cross policy working and improving data, however there is no obvious resource available to deliver these. There is also a real risk that going forward the sector will be too lean to change and respond to the refreshed Action Plan without significant investment.
The plan has now been in place for 7 months and it is difficult to determine the progress that has been made to date. The proposed Culture Summit event with COSLA; Connections and Partnerships: The Value of Culture in Communities has taken place and we would call for further actions to follow from this. A joint working agreement for Culture with COSLA would be a productive way forward, recognising the key role Local Authorities play in support not just culture in their communities, but touring national work. Scottish Government working with Local Authorities and cultural organisations to collaborate, particularly around community based cultural assets is vital to enable better use of spaces out of hours, sharing of buildings and securing affordable rentals. Improving connectivity across services through supporting partnerships between transport and cultural venues and events to encourage audiences and environmentally sustainable practices.
The Cabinet Secretary provided an update on progress to the CEEAC Committee (letter of 5 June) which referred to reform of the culture sector, however what this means has not yet been communicated. In addition, the plans, timeline and strategies for public service reform and how transformational these might be and how they will impact on national institutions and public sector cultural bodies are unclear and where future funding will be directed. There is considerable scope for cultural practice and production in its many guises to be a key part of positive and realistic transformation. We would encourage a review of the CSAP with a view to ensuring it is strategic and takes a long-term approach. It should also be responsive to the shifts in the sector that are anticipated in October post MYF decisions and of the input that the sector has already made to inform the International Culture Strategy and the National Events Strategy.
Clarity on where leadership in the creative economy currently lies would be hugely welcomed. We also believe there is a strong argument for a strategy for the Creative Industries in Scotland. Across the UK Creative Industries generate £108 billion a year, employ over 2.3 million people in every corner of the country and have grown at more than 1.5 times the rate of the wider economy over the past decade. (Creative industries sector vision: a joint plan to drive growth, build talent and develop skills - GOV.UK (www.gov.uk)).
By taking decisive action through the Action Plan on cultural vision, policy development and investment, Scottish Government could halt the decline and go some way towards securing Scotland’s place as a cultural world leader and unlock enormous benefits for Scotland’s society and economy. We remain available and committed to working with the Scottish Government, culture sector stakeholders and partners to realise the ambition of this investment for the benefit of all.
3. How should the Culture Strategy Action Plan inform the budgetary decisions of the Scottish Government, and the priorities and spending decisions of other partners in the culture sector?
Transparent and inclusive strategies, processes and cross-party commitments are vital to the sector’s development but without a shift in core investment the sector will continue to decline. Meaningful dialogue with the sector should inform budgetary decisions which must be prioritised to sustain the sector and passed on to those who have been on standstill funding or have not received support over the last decade. This will make up for the real terms loss and to provide security and sustainability to achieve the ambitions and to meet the requirements in the areas of carbon reduction and moving to net zero, fair work and equality, diversity, and inclusion.
Without designating a budget to progress the Culture Strategy Action Plan, progress is likely to be slow however Government must be wary of investment in new one-off projects without investing in the core first and a strong case for widespread impact and benefit. This week saw the announcement by the Cabinet Secretary inviting participants to join a new ‘Strategic Partnership for Scotland’s Festivals’. Whilst we do not know the details of this yet, any initiative to address the precarious state of Scotland’s entire cultural landscape is welcomed, and we look forward to hearing more about the proposals in due course.
A strategic approach to Cross Policy Working is urgently needed with identified leadership that understands the intrinsic value of culture of and in and of itself and that cultural participation has wider benefits that support our wellbeing and builds wealth in our communities. Cross-portfolio working is implemented most successfully from the ground up. Across the culture sector there are multiple examples of collaborative models with the public and third sectors to deliver activity which supports early intervention and prevention which consequently reduce demand of higher tariff public community, social care and health services. Cross-sector investment is happening in health but needs to be captured, evaluated and promoted better. Investment, a strategic approach and commitment across Government departments is now required to work towards transferring public investment through procurement and collaborative solutions to deliver change at a transformative level. Some work has already begun to map out where arts, heritage and creative industries can deliver on outcomes across Justice; Social Security; Health; Education and Economy. Further work is required to identify ways to secure cross-portfolio investment and understanding of the benefits of culture, particularly with the increased demand for social prescribing and creative therapies to support mental health and well-being.
The Culture Strategy considers cultural production and practice sitting in a broader societal context which means that specific Scottish Government ring fenced funding streams (Level 4 Budget) could be more specifically targeted to include cultural investment. However, this needs meaningful discussion at minister level to take place to agree and take forward strategic cross-portfolio investment and break down the silo nature of delivery and budget allocation. The sector has limited powers in achieving this at a strategic level without high level intervention and will.
A commitment to strategic investment in the youth arts sector to ensure young people in Scotland can access and participate fully in cultural and artistic life from a young age, supporting creative education, skills development, and providing essential routes into employment within the cultural industries (which is key to the ongoing success of Scotland’s thriving cultural sector). Such investment is essential for the additional benefits that participation in the arts offers, supporting wellbeing and demonstrating that culture is central to Scotland's prosperity and essential to our lives and wellbeing.
4. What progress has been made in the last 12 months on taking forward innovative funding solutions?
The Creative Industries contribute more than £5 billion to the Scottish economy every year. They comprise of over 15,000 businesses employing more 70,000 people and make a vital contribution to the national wealth and international reputation. The sector is a key growth area and for example for every £1 invested by the public sector in the Edinburgh Festivals, there is a return of c£33 to Scotland. Despite this there has been a lack of progress in the development of existing and new forms of cultural investment and businesses and jobs are now at stake.
Culture Counts has seen little progress against the recommendations outlined in the CEEAC Committee’s report, or in the Government’s own commitments to take forward innovative funding solutions. Whilst past recommendations made by the Committee and Culture Counts (12 recommendations for culture funding — Culture Counts) remain relevant, they no longer go far enough. To secure the future of Scotland’s cultural sector, urgent and transformative action is needed.
One area where we have seen some development is the Visitor Levy Bill, however, the earliest that this will start to generate income, due to the mandated 18 month implementation period as noted from the Local Authorities which are most advanced on their planning, is unlikely to be until mid-2026 (About proposals for a visitor levy – The City of Edinburgh Council).
Culture Counts has consistently called for the introduction of a Percentage for the Arts scheme, which was a 2021 Scottish National Party Manifesto commitment. We would urge the Government to move forward and implement testing of this scheme.
The sector has welcomed the Scottish Government support and collaboration with the UK Government to secure cultural tax breaks including Exhibition Tax Relief, Theatre Tax Relief, Orchestra Relief, energy bills relief scheme, etc. This has provided a lifeline for many organisations without which their financial situation would be much bleaker. We would urge the Scottish Government to work to maintain these commitments permanently and collaborate further with the new UK Government to open up future investment opportunities and partnerships, however, these alone, are not enough to rebalance the gap in investment that the sector has experienced or provide the sustainability the sector needs.
The culture sector is inherently innovative and creative across all that it does including in diversifying its income, which is why it has survived on standstill funding for over 15 years. It has, however exhausted cost cutting initiatives and innovative schemes for diversifying income at an organisational level. In addition, the pressures of organisational deficits and applying to the Multi-Year funding programme has seen innovation and the ability to take advantage of upcoming opportunities constrained. Fundraising is increasingly challenging with funders experiencing increased demand, many are moving to support different priorities and success rates are plummeting. The challenges around ethical philanthropy and corporate sponsorship mean it is not currently a viable option for developmental growth. The sector reports that it is at capacity without significantly compromising its core services and mission.
Whilst further change and adaptation is of course possible, additional budgets and interventions are urgently needed at a government level. There must be an understanding of the distinction between core funding which should be supported by core and sustained investment and innovative funding solutions which are not necessarily sustainable and cannot be relied on to support ongoing core activity.
Dealing with financial pressures is what culture has in common with education, health and social care and leads to us being locked into having to make ‘difficult decisions’ rather than working towards imaginative solutions. We need to find ways cross-sector to look at alternative methods of resourcing and working collectively.
Government investment is only one part of Scotland’s cultural ecosystem. It is also essential that the Scottish Government works with COSLA and Local Government, building on the Verity House Agreement to mitigate and reverse the hollowing out of Local Authority cultural services, which have sustained a 39% real-terms cut since 2015-16. (Scottish Parliament Information Centre Briefing, Bank of England Inflation Calculator).
Scotland’s spend on culture as a percentage of GDP is still one of the lowest in Europe. If Scotland aspires to set an international example as a progressive nation and lead the way in its cultural investment, then the current budget levels need to significantly improve to realise this and meet the ambitions proposed within the cultural strategies.
5. How successful has the process of implementing Creative Scotland’s Multi-Year Funding Programme been thus far in delivering longer-term clarity and confidence for the culture sector?
Culture Counts has not conducted any detailed consultation to gather evidence from the sector on the process of implementing Creative Scotland’s Multi-Year Funding Programme as understands that others have taken forward this work and will be sharing their findings with Creative Scotland and the CEEAC Committee directly. We have however received feedback from some of our members and have our own reflections, having been included in another applicant’s application.
Creative Scotland’s Multi Year funding programme has been a long time in development and delays to its roll out, due primarily to the Covid pandemic, has left the sector on standstill funding for over a decade and now in serious financial precarity. Developing a programme for such a broad and diverse culture sector is a challenge particularly without a multi-year settlement for its own funds, the external challenges facing the sector, as discussed previously, and with the extremely difficult funding environment. Core Scottish Government funding is not enough to adequately support the sector or the programme and the ability of organisations to secure match funding from other income sources is limited and declining.
The Multi-Year funding programme has been a challenge for the sector. It created one process for all applicants regardless of artform, location, organisational scale, level of investment sought or skills and experience. We understand that the process was taxing for many applicants, particularly those applying for the first time or with unpaid staff and took considerable time and focus away from core activity for key and primarily senior staff members. Developing plans and strands of work to meet the three strategic priorities in the Second-Round application was challenging however it has enabled organisations to review and develop their business models through writing Business Plans. The development and deadline were unfortunately programmed at a time when applicants who are not in RFO programme had to pivot to apply to the Open Fund to secure funding for 2024-25 and then for many to deliver events, activities and festivals all when end of year accounts were also due.
The decisions that Creative Scotland will be taking at the end of October on the Multi Year Funding Programme are likely to have significant repercussions for Scotland’s cultural landscape and there is a lack of clarity over the proposed decision-making process, how awards will be made and prioritised and if that deadline will be deliverable. Any delay in the decision timeline will leave many organisations outwith the RFO network in serious difficulties.
The current available budget stands at around £40 million for applications totalling £87.5 million, leaving huge uncertainty for cultural organisations awaiting these vital decisions. We understand from Campaign for the Arts that the percentage gap between available budget and levels of demand are in excess of any other similar grants programme delivered by any of the other UK nations national arts bodies. The levels of demand for funding demonstrate the ambition of Scotland’s cultural sector that whilst facing a precarious future are committed to continuing to develop world class cultural programming. We welcomed ministers’ commitment to invest at least £100 million more in arts and culture by 2028-29, and the promise of at least £25 million in financial year 2025-26 however the crisis is an immediate one. Bringing more of this funding forward now, and the Scottish Government and Creative Scotland aligning their planning for October, would enable vital investment for Creative Scotland, the sector it supports and the communities they serve across Scotland, when it is most urgently needed. Any delays caused by the timetable of the UK Autumn budget at the end of October could have catastrophic consequences.
The plans for transition support and funding for unsuccessful applicants are still unknown and there is considerable concern that despite plans to look at supporting business development, there is nowhere for these organisations to pivot to with falling success rates with trusts and foundation and the challenges around ethical philanthropy and corporate sponsorship.
We hugely value having an arm’s length national cultural funding body and it is fundamental that its arm’s length status is maintained and protected, with decision making removed from government. But it is vital that it is adequately funded to support the sector it supports. We welcome having a multi-year funding programme for the sector but a multi-year funding settlement is also vital for Creative Scotland to enable its own and the sector’s strategic planning. Despite the current Scottish Government pledging in their 2021 Party Manifesto to agree 3-year funding settlements for Scottish Government core funded cultural organisations, this has not come to fruition and Creative Scotland’s budget is currently only confirmed to March 2025. We were also disappointed not to see multi-year budgets in the 2024-25 budget as had been previously suggested by the Government as part of the Verity House agreement.
6. What progress has been made in delivering fair work across the culture sector and what should be the priorities for further progress?
Progress
Artists, makers, and creatives are the heart of the sector and need to be paid fairly for all that they do and produce. We need to provide the support and conditions for freelancers to survive.
The culture sector is committed to fair work and its principles and implementation, as well as the establishment of the Culture Fair Work Taskforce Group, which Culture Counts is a member of. Many organisations have been improving their practices for a number of years including becoming Living Wage employers, paying the Real Living Wage and adhering to industry standard rates, and phasing out zero-hour contracts.
Creative Scotland’s Multi Year Funding Programme which received applications from 281 cultural organisations to the Second Stage in April 2024, required commitments from all to fair work principles including:
confirming payment of the Real Living Wage,
putting in place arrangements for Effective Voice for workers,
meeting Scottish Government requirements for grant recipients to publish a statement on their website highlighting commitment to their Fair Work First programme.
supporting the principles of Fair Work within programming.
Beyond Creative Scotland other funders such as Museums Galleries Scotland also have fair work conditionality for grants which has helped to drive forward the implementation of the real living wage in the sector. As it is quite early in the development and implementation of fair work across the culture sector, it is difficult to determine what progress has been made without evidence gathering and access to relevant data. We anticipate, however that cultural organisations may be further ahead than many other sectors in committing and implementing fair work.
As Festivals Edinburgh noted in their response to the consultation on the National Events Strategy: (National events strategy review: consultation analysis - gov.scot (www.gov.scot)).“In February 2023 the UK Creative Industries Policy & Evidence Centre (PEC) published the Good Work Review - the first examination of job quality across the entire UK creative industries - with Creative Scotland as the Scottish partner in this work. The study found that ‘people working in the Creative Industries tended to have higher job satisfaction than workers in other sectors, could work more flexibly, and found their work to be an outlet for their creative passion’. However, they also found that there was ‘lower than average pay in some sectors, long hours, evidence for poor workplace culture, and unequal access to the creative industries, with many people needing to work for free to get a foot in the door’. “
KEY ISSUES
What we are aware of is the financial burden that fair work has placed on the sector with some organisations reporting that it has directly led to an operational deficit and/or having to use reserves to meet the cost of increased wages.
For some organisations adapting to provide increased wages has come at a cost of job security for employees with employers unable to provide stability for workers due to being unable to commit to longer term contracts which is in conflict with the ethos of Fair Work First.
There is no increased budget available in the 2024-25 budget to help meet the ambitions and targets for 2025, particularly in paying the Real Living Wage. As most organisations remain on standstill funding for this financial year meeting the obligations will either require additional funding to pay staff and artists appropriately (which may involve use of reserves and going into a deficit) or a reduction in the level of activity, service or outputs of our cultural institutions.
Applying for a limited exemption in funding contracts on the basis of affordability is not an appropriate solution as it would result in staff not being appropriately compensated for a period of time and is not a permanent solution for organisations.
Freelancers are not currently included in fair work legislation.
Volunteers are also not included and as Museums Galleries Scotland reports 96% of organisations rely on volunteers and the depletion of the volunteer workforce is causing pressures.
Priorities for further progress
Ensure that there are adequate structures in place to capture data and evidence around fair work to comprehensively guide policy development.
To include freelancers in the Fair Work legislation, and for the Fair Work Dimensions to be embedded into contracts.
Ensure the Culture Fair Work Taskforce can influence policy and the wider sector are able to feed into this process.
Utilise the skills and expertise of the culture sector who may be further ahead than many other sectors to share learning and expertise.