Economic impact of funding for the arts

2 July 2013

While this week’s public spending review has reduced the immediate threat of slashed arts funding, we are writing to support the economic case for continued public financing of the arts as an important contribution to the strength of the British economy. Support for this has been requested by Maria Miller, Secretary of State for Culture, Media and Sports.

Broadly defined commercial creative activities account for a formidable 10% of national output. Britain has a leading world position in this sector, as it has in financial and business services, pharmaceuticals, and the arms trade. With finance shrinking after the excesses of the recent crisis, this country can ill afford to neglect an area of such excellence that we can all be proud of, and that attracts the rest of the world to this country in such numbers. Thus amongst other things Britain’s vigorous arts scene is a major source of attraction for the tourists whose spending and its knock-on effects amount to at least 6% of our national output; this is simply the most obvious of the “multiplier” benefits of the arts to the economy.

A recent report, “The contribution of the arts and culture to the national economy”, commissioned by the Arts Council from the Centre for Economics and Business Research, gives a well argued analysis of how the publicly funded arts, though a small part of the broader commercial creative sector, are crucial to germinating the talent and creativity that are its driving force. The need to encourage creativity goes further; the whole economy requires innovators if Britain is to have a prosperous future in an increasingly competitive world.

With our rich heritage and strong cultural sector, Britain “punches above its weight” in the world, and capitalises on the universality of the English language. We must sustain this. “Mens sana in corpore sano” applies at the national as well as the personal level. To achieve the greatest potential of the economy requires giving full rein to this country’s reserves of talent, of which artistic creativity is such a major part.

This letter comes from many members of the Political Economy Club and others. A former Secretary, John Maynard Keynes, was instrumental in setting up The Arts Council. Over time funding should perhaps shift more to local sources of finance, rather than central government, but right now the economy will benefit from its budget remaining well supported by the Exchequer. We regard public support for the Arts as vital to our economy.

Yours faithfully,

Charles Dumas, Secretary, Political Economy Club
Ian Byatt
John Chown
Haruko Fukuda
Charles Goodhart
Peter Jay
Rachel Lomax
Peter Lyon
David Marsh
Douglas McWilliams
Geoffrey Maynard
Michael Nevin
Peter Oppenheimer
Alan Peacock
Gordon Pepper
John Plender
Harold Rose
Richard Sargent
Peter Sinclair
Robert Skidelsky
Christopher Smallwood
Peter Warburton