 Goodbye, and a warm welcome to your first meeting of the Constitution, Europe External Affairs and Culture Committee in 2024 and a happy new year to everyone participating and watching today. Our first agenda item is to take evidence as part of our budget scrutiny of the Culture Spending portfolio for 2024-25, which follows on from the committee's pre-budget scrutin� last year and the publication of the budget at the end of December. Restorwn nin deall ar gyfer cymaint rhywbeth ystafell regio ac wrth gwrs yw Llorri Anderson, dyrectr oficyf yr annod, Shona McCarthy, Argell Classyf Llennidig ysgol Ysgrifennig Ysgrifennig Fraenig, Fran Hegey OBE, Argell Classyf Llennidig ysgrifennig Ysgrifennig Ysgrifennig, Simon Hunt, Ysgrifennig Ysgrifennig Ysgrifennig ysgrifennig, Anne Lydon, director general of national galleries of Scotland. Fiona Sturgeon-Shia, chief executive of the federation of Scottish theatre, who we hope will be joining us shortly, as the same Fort Lee-Onnie Bell director of the V&A under D slightly delayed. We are also joined online by Sam Dunkley, who is acting regional organiser of the musicians union. A warm welcome to you all and thank you all for written submissions for today's evidence session. This is around table and discussion should be more free-flowing. Please indicate to myself or the clerks if you wish to come in in a particular question. We have eight witnesses around the table, so if you could be concise in answers and not repeat things that have been said, that would be really helpful. If I could begin with an opening question, a pre-budget report will do that the risks to the future of the culture sector were becoming more severe and that there was an urgent need for the Scottish Government to restore confidence in the sector. Like your opinion on the extent to which the budget and the cultural strategy action plan responded to the challenges facing the sector and whether it meets that challenge of restoring confidence and whether you have any reflections on the Scottish Government's response to the committee's recommendations on innovative funding solutions, and if you could go round this direction first. Laurie, put you in the spot first. Well, thank you firstly for inviting us to return to the committee to provide evidence post-budget. I would like to start by thanking the committee for the work that they have done in their pre-budget scrutiny and the attention that they have paid to the challenges and the evidence that has been provided. I would also like to extend a thank you to Cabinet Secretary Angus Robertson for securing additional investment for culture in the 24-25 budget. There is no lack of understanding of the challenges that this budget presented. I think that firstly, if I would reflect on the committee's report, we did welcome the report. We recognise and welcome that the report understood and recognised that the perfect storm is far from over and that sustained and significant challenges still lie ahead for the sector. We agreed with the report conclusions that there has been some limited progress over the last 12 months in terms of developing new and innovative solutions to taking funding forward, particularly around multiple funding year settlements, cross portfolio working, and we support your call to action this urgently. We are pleased to see a number of those things come forward in the refreshed cultural action plan. However, we would have liked to have seen your report go a little bit further in terms of the call-out to reinstate that cut that we experienced almost during the meeting, but we have now of course seen that. We would have liked to have seen a call to bring forward the very welcome 100 million investment over the next five years a bit further forward to this budget. Our on-going ask is to aspire to see a 1 per cent investment for culture of the overall Scottish Government settlement. That is something that this committee has supported in the past, so we would have liked to have seen that continue. In turning to the budget, as I mentioned, any increased investment in the current climate, as I say, is welcomed. It is certainly a move in the right direction. However, across the board our reflections would be that there is not a huge amount to celebrate in the settlement that has been provided. I will comment on a couple of areas, because I will leave those that will be commenting and receive their own funding settlements directly from the Government to draw their own conclusions and respond to those. Creative Scotland will be along a bit later, and they can provide comment. In terms of Creative Scotland settlement, the £6.6 million that represents a 10 per cent cut has been restored. We were pleased to see, but there is also a further £6.6 million that has been provided, as we understand it, is what was lost from the reserves. However, the funding that the settlement has received is not actually a new investment. As many others who are within the public sector have seen, there is an imposed 5 per cent efficiency saving as well. What that really means for them, and in particular for the RFA programme for 24-25, is that those organisations will continue on stand-still funding. The proposed investment for culture is not being passed down to those organisations. I will finish up and let others come in in just a second. However, the other area that I would like to raise attention to is the non-national museums, which are not part of Creative Scotland's portfolio. They are funded by Museums Gallery Scotland. There are 439 out of the 449 museums that will be experiencing a cut through the funding that is available to them, and they will have significant challenges in adequately resourcing their operations in the coming year. For those who are seeing an increase whilst it is really incredibly important and welcome after many years of stand-still investment, and coupled with high inflation, it will reduce the value of that and the impact of that investment in real terms. In addition, as we have reported in previous sessions, the on-going recovery from the impacts of Covid, the cost of a living crisis, high-energy utility bills and the requirements to meet the challenges of the real living wage settlements mean that those settlements are unlikely to adequately cover those increasing costs. Just to conclude, as I said, we are welcome to see increases and the budget moving in the right direction, which is hugely welcome to use. However, the serious amount of investment is needed now within this budget, not for a five-year period. That is very welcome, but we need that money. Our reflections would be that the investment is not really going as far in terms of the amount and the pace that is required. Thank you for inviting me along this morning. This is my first week in my new role, so I am very happy to be here and to be representing the national galleries of Scotland. Obviously, the national galleries are custodians of the national art collection, which ranges from the middle ages to modern and contemporary. Through public funding, we provide free access to that collection for the people of Scotland. We hold the collection in trust for them. Of course, looking at the budget and the settlement that has come through, that allows us to do the work that we do for the people of Scotland. We continue to provide free access to the collection through our public offer at our three sites. We offer visits to our stores, loans out to other museums and galleries around Scotland, and the rest of the UK and internationally. We recently opened to Scottish galleries, showcasing a particular strength of our collection. We have a changing programme of exhibitions here in Edinburgh, but we also tour shows domestically and internationally, and our outreach activities extend across the country to ensure that there is access and engagement with the national collection. We are also committed to furthering our on-going work in equality, diversity and inclusion with regard to the collection, our people and our offer. What we have seen and as has already been noted, our visit numbers are recovering post-pandemic and our online digital offer continues to grow year on year. While we are able to do all of this important activity with funding from Government, the reality is that being able to deliver those programmes and activities are becoming more and more challenging as the funding situation is proving to be a challenge for us. The revenue budget increase is actually only 1.8 per cent for the national galleries of Scotland. Once you take into account the 2023 and 2024 spring budget revision for the first year of the pay policy, we also have the 5 per cent public sector reform efficiency reduction as well. We are expected to pay the second year of the pay increases, but we also have the increased employer pension contributions, and that is against a backdrop that everyone is facing, which is of course increased utility costs. The settlement, as presented to us, is a very challenging path towards a balanced budget, and we are currently working through what those impacts and options would be for how we deliver services in 2024 and 2025. I echo some of the sentiments that have been shared already. This is the reality of several years of underfunding of the arts and culture sector. I think that it goes all the way back to the financial crash of 2008, where NGS's budgets, along with many other organisations, were impacted by that and have just never recovered. If you look at the evidence from about 2011 onwards, taking out the Government pay policy allocation and the variable elements of capital funding, you are basically looking at level funding since about 2011. That is challenging as costs continue to go up, and yet we are still committed to delivering what we need to do for the people of Scotland in safeguarding those national collections. We are acting on the behalf of Scottish ministers to make this collection available into the future for people, but the reality is that 95 per cent of our grant and aid goes towards our salary bill, and that only leaves 5 per cent to do the rest of the activities, the activities that have a very positive impact on Scottish life, health and wellbeing, arts and culture. We are also not alone in that. Clearly, I am surrounded by colleagues here from other institutions and parts of the sector, but national collections have a high proportion of fixed and unavoidable costs related to securing and caring for the priceless and world-class collections. Of course, we have also factored in the high costs of maintenance of our buildings, estate and infrastructure that go along with them, and our desire, ambition and obligation to meet a carbon-neutral future. While I am here representing NGS, those are challenges that are shared by other national collections such as the National Library of Scotland, the National Museums of Scotland, who are not here today, but, like NGS, they are basically facing a challenge in how they will balance their budget going forward and that there will be difficult decisions involved for all of us as to what that looks like. If I may speak to picking up from earlier comments about the wider sector of museums and galleries, although the funding situation is not ideal right across the board, it is of concern for all of us because we are all part of an ecosystem and we work very much together in collaboration and partnership. If the funding is not balanced across the board, we all bear the impact of that. We will hear more from Creative Scotland later, but we are all connected. For us to be able to truly deliver on what the people of Scotland deserve, it will require adequate funding. We would welcome multi-year funding. I am opening questions about whether the Scottish Government's budget and the new strategy meet the committee's recommendations about improving confidence in the sector and whether the Scottish Government's response to the committee's recommendations on innovative funding solutions. That was an opening question, but if you want to say a little bit about your own situation, that would be good. Thank you and apologies for being slightly late. Thanks for having V&A Dundee here this morning. As people have probably seen, V&A Dundee's budget settlement was positive for us and I just thought maybe rather than going over what the organisation does, which I think most of you will be familiar with, that we operate as Scotland's design museum from Dundee. We are obviously operating out with the central belt, but I think that probably reflecting back on what Laurie Annard just said, which all I can do is agree with and we all recognise that we are all connected. We are all experiencing very similar things, albeit from our own context. However, for V&A Dundee, partly why we look different on the report is that, in effect, we are a bit like a startup. We have had five years of operation. It has taken us probably those five years to really work out what our public subsidy model will be. We make a lot of money from that money, and that is an important point that many have said before, too, that it is also about thinking through what public subsidy is. It is probably the only support that we all get that does enable us to cover core, but it should also be able to be a platform to enable us to then do those activities that Annard said. From V&A Dundee, I think that within five years, we have begun to really evidence significant catalytic impact that we do quite comfortably across economic, social and culture. The increase in budget for V&A Dundee gets us into the region of something that starts to demonstrate what our organisation warrants, if that makes sense. We have already gone through three years of really intense working and intense revision of our programme model, significantly reduced what we do in terms of major shows, at the same time as trying to make more money and actually do more free offer, if that makes sense. However, the evidence that we demonstrated in the fifth year birthday report that I know some colleagues will be more familiar with really starts to establish what an organisation, when it is funded to a level that gives it a fighting chance, is able to achieve and also outwith the central belt. I think that it's really important for us to be here giving a voice to those outwith. Glasgow and Edinburgh are surrounded by other national organisations, but the increase in budget that we've had enables us to now look with more positivity than, if I'm really honest, we've had in the last few years where it has been year on year of mitigating measures and that ranges from the things of reducing our output, not having any confidence to plan beyond a year and as all organisations will recognise, we're all, for us to achieve a show of the scale, quality impact, local relevance as well as international like Tartan, you need four or five years to be able to do that. I think that the overall message I think is to see, as was the three things that I think we all want to see is the enactment of some of the promises that have been made and a coming together of what is such powerful narrative of what culture can achieve, as Anne said, for everybody that lives in Scotland but also everybody that visits here, so a reducing of that gap. I think that we all want to be part of working out how we do that as well as really trying to work with Government ministers and officials to find a way to look at what multi-year, what can be achieved around multi-year as well as the enactment of the increase in budget that's been there and some of the ideas as well that around innovation I suppose as a young organisation, sometimes maybe we've had no choice but to be extremely entrepreneurial because we started probably with a funding model that was not enough to cover our running costs so it's quite common in a new capital programme so there is good things that have sometimes come from that. We've had to be incredibly entrepreneurial, setting up things like city-wide cultural recovery funds during Covid, long-term relationships with organisations like Dalmore, but we also all know that sometimes then the Government then works in a way that creates an impact on that when we think that's what we should be doing, that's also been rehearsed in these rooms and others before too. But for us to be able to be in spaces where we can be innovative, where we can be entrepreneurial with our business models to build the connections that are so fundamental to that and to spark those ideas, we as cultural leaders and chief execs that are running organisations that are complex beings. We're not just cultural voices and delivering seven-day week operations, we're running catering businesses, we're running retail businesses, we're running event businesses and more. We need to be able to have the space, actually the intellectual space, the energy as well to be producing more and more ideas because the more ideas we're all creating the better chance we have that some of those will be genuinely transformative and I think probably at the moment none of us have enough time to come together beyond our own organisations because of the strain that everybody's been working under. So I guess my main statement is that we're really thankful for the work we've been able to do with the Scottish Government over the last few years to work with us towards getting us on a much firmer footing than we've ever been in. It's come at a time where it will enable us to look with more positivity than we've had in the longer term, but we're still like everybody else dealing with 40 per cent cost increases. Probably for our fifth birthday, our approach was to supercharge the year. We deployed reserves to cover operational costs as well as looking at other ways to bring in money, so we took quite a lot of risks, if that makes sense, to make V&A Dundee really work in Dundee, for Dundee, of Dundee but also for Scotland and of course the nation that Scotland wants to be within the wider European context but also international, but to be able to achieve those things that we, as an organisation, achieved last year, it does take the public subsidy that we're now more close to being at with that extra £800,000, so we really, really do welcome that, but really it gives us a fighting chance of being able to enter our decade, our first decade, with the same level of economic, social, civic and cultural impacts and being able to contribute powerfully and I hope with real potency to the cultural growth of this country, as well as its economics of economic and cultural, but everybody needs that fighting chance, we all need to be able to do that because at the moment we're running businesses that are to the bone, organisations that are to the bone and we just need to be allocated in the space to actually really demonstrate what I think the cultural leadership and workforce of this country is extraordinarily capable of doing and is to innovate as well as protecting what we already have. It's this continual balance that I think we're in when money is so tight that we maybe all want to pursue the new and I'm where I'm saying that as a relatively new organisation, but we also must protect what 70 plus years of public investment has created and to think really deeply I think about the topography of Scotland and I don't mean that in terms of looking at does more need to go elsewhere, I think we need to really be feeling as well as for Dundee to thrive, it needs Glasgow and Edinburgh to thrive, I really hope that for Edinburgh Glasgow to thrive, it needs Inverness in the islands to thrive, it's not just the cultural ecology, it's the geographic and the social and the economic one as well. There's so much to welcome in this for us personally but like Ann and Laurie you've said, we also recognise that people are coming from a very very difficult place, years and years of flat funding, soaring costs that are out with anything any of us had imagined as well as you know we're in a city of 150,000 people, we'll have 340,000 people through our doors this year so I just hope that that's the story of what V&A Dundee can achieve but also what the sector can achieve when it's given that fighting chance. Hi thank you very much for inviting me here to speak. Today my name's Fiona Sturgeon-Shay, I think this is my second time at committee but the first time was during Covid and online which was a very strange experience so it's good to be here in person. I'm the chief executive set of the Federation of Scottish Theatre or FST as we are known. We are the membership and development body for professional dance theatre and opera in Scotland. We've recently refreshed our vision in order to kind of I suppose better reflect the work of our members so our vision is of a thriving performing arts sector that's integral to a vibrant diverse and equitable Scotland and our mission in helping to achieve that is to advocate for a connect across and lead necessary change within the performing arts in Scotland. We represent over 200 members in the majority of local authority areas across Scotland based on all sorts of different scales working in all sorts of different settings. Members include professional organisations and individuals, some of our members are here today giving evidence today from national companies festivals, individual artists creating their own work and those independent producers who support them. We count all of Scotland's professional producing companies as members and those who provide artist support and just work in different ways to create, develop and produce live performance for audiences across Scotland in the UK and overseas. I thank you, as I said, for inviting me following the evidence of my colleague Liam Sinclair from Dundee Rep and Scottish Dance Theatre who was here in September when he was our co-chair and following our written submission to that inquiry. We were in pretty constant dialogue with our members and at our last members meeting we considered the wider economic landscape for the performing arts trying to almost predict what the direction of this budget might go in and this week we gathered a bit more information from our members in another session with the knowledge that we currently have. I won't cover the richness of those discussions verbally today but I will follow up with the written submission because there was so much detail that I think deserves to be shared. I suppose that reflecting what the speakers have already said, our members acknowledge an absolutely welcome 100 million commitment given the mood music. It was a surprising announcement and it brought some long overdue hope to a particularly stark and challenging situation. Everyone acknowledges the achievement that any increase in budget must have been in the hard work that must have gone into negotiating that given the budgetary pressure across the board. It feels like an excellent start and we hope that we will be further recognition of investment in the value of culture in Scotland. Everything points towards a real understanding of the value and the benefits of culture at the heart of a progressive fair Scotland with sustainability being key but I guess as people have said already how we get there is still a bit grey. At the risk of introducing another phrase that will soon get overworn, I think that the devil is in the detail and that's something that's come up time and time again in our conversations, reading the analysis by Spice and colleagues like Culture Counts and others. Our members, the majority of whom are included within the Creative Scotland and other culture budget are anxious to know exactly what this budget announcement will mean in real terms for them. Having said that, there's a huge appetite for collaboration that our members have and will continue to contribute in whatever way they can to support that assured vision and actions towards all of that. Your other questions were around improving confidence and responding to challenges and apologies for jumping to challenges quite so quickly. I guess there's a real concern that we won't see enough new funding in time for it to make the impact that's needed. I don't think that's a surprise to anyone to hear that. Again, I don't think that I need to repeat in detail the evidence from the last session and what we've been saying over the last three years around those deep and damaging challenges that the sector is facing. When I was rereading our own evidence from last time, the phrase that jumped out was there is no space closer to the edge to move towards. I think that one of the things that's definitely always been talked about but has come very much to the fore of the opportunities for self-employed and freelance artists and practitioners that are shrinking so drastically so quickly and people are really struggling to survive. I want to say something about poverty here. I'm not really sure how well I'm going to express it and it might be a very naive thing for me to say but I think it's really important not to think about culture over here and poverty and need over there. The people who work in our industry are experiencing the same economic and social challenges as everyone else. We're not talking about a few less shows here and there. It really is the decimation of a workforce in an industry that's at risk. I think that around this table we all understand that. Daily I'm hearing from members and others about another failed funding bid due to extreme competition, which could be the last that that company can withstand because it's one or two people working tirelessly often to deliver highly participative activity in vulnerable communities when they're in such a precarious position themselves. On a more positive note, I guess the last conversation that we had with members focused a lot on ambition, and that kind of cycle of opportunity that there are examples throughout the submissions that you've received for this meeting from the fringe, from the National Gallery of Scotland and others. What a missed opportunity it is to limit ambition when it could be really transformative. The more work at different scales that could be produced in Scotland that would increase employment, improve skills development, train and retrain our employed and freelance workforce, lead to higher wages, fairer work and crucially secure that ability to stay relevant on the international stage. I've got lots more notes, but I'll probably finish there and we can come back to some other opportunities in relation to your question about the culture strategy refresh and those kinds of things. Thank you very much Fiona. Can I move to Sam, who's joining us online? Thank you. Good morning. Thanks for the invitation to join you today. I think in terms of reflecting on the on the budget that was announced, the feeling amongst our members and colleagues is that it's not as bad as it could have been, but it's not as good as we'd hoped. The commitment from the First Minister to an extra £100 million over the next five years was welcomed across the sector, I think, and we've heard that from colleagues already today. As soon as that was announced, the voices across the sector said that it was really important that be front loaded. There is a crisis in funding now and organisations and individuals need access to that money so that they can keep doing what they are doing in the face of a cost of living crisis, which is having real impact on organisations, yes, but also on individuals who make their living as professional musicians and artists. Unfortunately, I'm not sure that the additional funding announced in the budget as welcome as it is will have the impact that we need it to necessarily. I think the refloating of Creative Scotland's reserves, which may be what the £6.6 million to cover the money that was withdrawn last year or in the current financial year, is welcome, but if that goes back into reserves, which might be a prudent thing for an organisation to do, it won't have an impact immediately on artists and organisations. The £6.6 million that's been put into the budget, as I understand it, has been put into Creative Scotland's budget to fill the national lottery funding shortfall for the past five years, so I don't know that that will feel like new money to Creative Scotland and to those applying. Having spoken to our members who have applied to Creative Scotland and to colleagues at Creative Scotland, at the moment, less than half of the music applications that are recommended for funding are able to be funded due to constraints in the budget. That means that musicians and those working with them are writing really strong applications that could have a really positive impact on musicians and our communities, but Creative Scotland doesn't have the resource to support them, and that will be reflected across art forms, I'm sure. The other thing that rankles slightly in the Cabinet Secretary's letter is describing a 3 per cent uplift for national performing companies as an inflationary increase. Given how long the funding for national performing companies has been static, I don't think that it will feel like an inflationary increase, and I'm sure my colleague from Scottish Opera will touch on this later on. But national performing companies' budgets in real terms are 40 per cent lower now in terms of government funding than they were, and that's reflected actually in the fees that our musicians are paid. I did some quick sums yesterday catching up with myself after Christmas. In 2011, the Scottish Ballet Orchestra tuti player, like a starting rate player, and rank-and-file member of the orchestra was paid £67.97 per session, and in 2022-23 there fees £76.22 per session. Using a very technological inflation calculator on the internet, if that fee had kept pace with inflation, it would be over £95 per session. Musicians might be playing eight sessions a week, and therefore are around £160 a week down on what they could have been handling, had their fees kept pace with inflation. So I'm not sure that 3 per cent feels like an inflationary increase to companies or to individuals, but when I compare the settlement that has been offered in Scotland with other nations in the UK, it is not as bad as it could have been. I think that we can look at Northern Ballet's symfonia as a cautionary tale in many ways. Due to their funding constraints, Northern Ballet are now proposing that all their touring work, or the majority of their touring work, will be done without their orchestra and with recorded music, which is not something that any of us want to see. We'll have a real impact on those musicians who are losing a vast amount of their work. It will deprive audiences in touring venues of the full experience of seeing and hearing a live orchestra doing fantastic work, which is completely different to listening to a recording of music, even on the best PA in the world. It's different to know that it's being played and to hear it played live. What we need to ensure is that we don't end up going down the same road anywhere else in the musicians union is campaigning against that decision at Northern Ballet and we'll continue to do that, but I think that is a cautionary tale for all of us. That said, and I'm feeling myself being very negative early in the morning, so I apologise for that. Any uplift is a welcome uplift and we'll continue to watch with interest how the rest of the £100 million over the next five years comes into fruition, but as has been said by colleagues already, the detail is really important and if too much of it comes too late, it will be too late for some organisations. I promised myself that I would approach this year with joy and positivity, so I'm going to come at this from a positive angle. Many of my colleagues have covered many of the things that I had noted down here to say already, so I'm not going to repeat those things and I'm going to jump quite quickly to the specifics of the fringe. Like everybody else, we welcome and celebrate the efforts that have gone in. Everybody's aware of just how acutely challenging it is in this environment to create a budget that's fair to all of the different needs, so we welcome the budget announcement, we welcome the cabinet secretary's hard work to secure the investment, we welcome the pledges in particular from the First Minister to increase the funding. There are real positives here for Creative Scotland, for the national portfolio organisations and for our colleagues in the V&A. I'm absolutely delighted to hear that news, but in truth we've got absolutely no idea how this is going to impact the Edinburgh fringe. I think that we need a specific and bespoke response. The fringe is a global brand for Scotland, but we fall between the cracks of all of the existing funding mechanisms. I still find it quite astounding to say that out loud. We get support through Expo and Place, but these are restricted funds, firstly to support the Made in Scotland showcase at the fringe and the onward touring of shows from Scotland and secondly to support our extensive community engagement on our access and learning programmes, but we do not receive core support. We suffer from not being in an RFO and not fitting within the major events portfolio as we are not a mobile or one-off event and we are not a start-up so we don't fit within the enterprise route. We're not right for Creative Scotland or Event Scotland or Scottish Enterprise, though occasionally we've secured one-off small pots. Yet we are the biggest performing arts festival in the world, happening every single year in the Scottish capital, including some 900 shows from across Scotland, and that's from the Isles and from every single part of Scotland, as well as the reputational impact and reach and the benefit for the performing arts across the UK and the 63 countries from across the world who participate on the stages of the fringe. To put starkly our position at the minute, we go into 2024 with no reserves, carrying a huge deficit and a loan from Scottish Government to survive Covid. We're the only cultural organisation in receipt of a loan as opposed to a grant. We continue to suffer from the historic wrong of having been removed as an RFO by Creative Scotland back in 2016, which is the reason we had to get a loan because we weren't an RFO. In 2020 we said that it would take us five to six years to recover from the wreckage of the pandemic. 2024 is the fourth year of that and it's absolutely crucial this year that we at very least break even. We very much hope that much of the funding announced will go to supporting those Scottish artists and companies and venues who are so much at the heart of the fringe, but the fringe society and those producing venues outwith the RFO portfolio need a bespoke understanding and approach because we have no idea, as I said, how the budget announcements will impact us. In the bigger picture of things, the whole festival city proposition of Edinburgh I think Scotland needs to decide if it wants to retain that status. Edinburgh's festivals are not like festivals in other cities. Edinburgh has been an inspirational festival city to Europe and the world and I know that because I was on the outside of it looking in with massive envy until I got on the inside of it and realised just how jeopardised that it is. If we value and want to retain that global reputation that it brings, then there needs to be a new approach. The festivals know that and we're working more collaboratively than ever and more creatively than ever, but we need a new approach and a new response from the Scottish Government and from the City of Edinburgh Council. We're very effective at attracting commercial partnerships but we have to invest in people to be able to do that. We need core investment to support the people and we need to be able to look like we're an attractive sector to work in. Everybody would agree that that attractiveness of our sector is a place of employment and a place for people to want to work has been severely damaged over the last number of years. We've got some philanthropic support and could attract more, but only if we can show that we have government investment as well. We look less attractive to philanthropic giving if we don't have the support of our own Government. As Leonie said, we want to be ambitious, world-leading, competitive and excellent in all we do. We've made major public commitments and targets around fair employment, sustainability access, inclusion and Scotland's international reputation, but it's really hard to be ambitious and to achieve all of those things that we would want to as creative entrepreneurial people if you can't even get out of the deficit that you've been carrying since 2020. The last couple of points that I would make that I don't think anybody has addressed yet is that we appreciate how hard times are for everyone, but when there is money available, it's really important that the right choices are made. One of the things that I did welcome was the shifting of the events budget into the portfolio of the Deputy First Minister because it did pay us last year to see such a level of investment in the cycling championships. I've nothing against cycling, cycling is great, but to see tens of millions of pounds going into a one-off event, when here you have a locally-rooted 76-year-old long-term, high-value, low-cost event that has sustained impact culturally, socially, economically in every possible way, I just think making the right choices about those locally-rooted things over one-off high-cost lower-value events. Opportunities like the Tourism Levy coming up as well concerns me greatly at the moment because there seems to be a shopping list against that when it comes into play that just dilutes its impact on everything. If there aren't other routes for us to get support, we at the very least need to be written in really strongly to that. For the French Society, we want to be collaborative with Scottish Government. We see ourselves as a major player in the nation's cultural ecology and we want to look forward and be positive. We also really support the culture council ambition for Scotland as a nation to get to 1 per cent. It would still be below European average, but it's a really worthy ambition to get to. Thank you for inviting us. My colleagues around the table have made a lot of the points that I wanted to make, but I will focus on the things that are specific to us as much as I can. Again, we very much welcome the increase. It's the first increase the national reforming companies have had in cash terms since 2010-11. That's already a step forward. I set out in graph form in the submission the difference that Sam was leading to the cumulative impact over many, many years of below inflation settlements. So the last seven or eight years it's been standstill funding while inflation has done that. We've all in different ways that echoing what's been said already have addressed those challenges and effectively we are making, we have made efficiency savings year on year on year. It's 14-15 years of finding ways to deliver the impact that we want to deliver, but more deeply or, and that comes across in reductions in activity. So when we set out as a national performing company the first few years we were doing six of our big main scale operas a year in Glasgow, Edinburgh, Aberdeen and Vanessa, we're down to three now and that's less work, not just for musicians and singers, but also the many, as Leanne was saying, that there's much that goes on behind the scenes. We've got a workshop, we've got costume makers, et cetera. It's less work for them, it's less work for the infrastructure around the industry. Innovative funding, we've done our best. I think all of the national performing companies have have done amazing things to grow audiences and particularly to grow audiences amongst demographics that you might not expect. So we are shortly going to produce a report on social impact of the national performing companies, which is coming out very soon. One thing that hasn't been mentioned around the table so far is the impact of the UK government's creative tax reliefs. Huge, that's become hugely important to us. It has filled the gap that our core grant funding has not been able to fill and particularly at the moment where we've got the enhanced rates post COVID. It's an immensely valuable contribution to what we can do. Those rates are going to taper back over the next couple of years. According to the current plans, that's going to have again a dilatory impact on what we can do. Sam has alluded to the impact on musicians. It goes across the board to the other people that are the types of specialists that we employ. Part of our efficiency savings have been to hold rates down, to hold pay down, but that has an impact A on the livelihoods of freelancers, but also our ability to attract and recruit staff. So all of these challenges are ongoing. We absolutely understand the challenges of the national finances. We understand and appreciate the battle that's been fought for culture. As I said, we welcome that increase. What we'd love to see is that longer term certainty. The £100 million is fantastic. That really did increase confidence, particularly after the events of last March, which really shook us all, where we thought we were going to get stancil funding and then we were being asked to model cuts. The £100 million fantastic announcement. We'd love to know what the timescale is. We've heard around the table bringing that investment forward as much as possible is important. I want to go back to forgive me around the table in one of the submissions and I can't remove who it was now. Culture is not a problem to be solved. It's an asset to be invested in. Great line. That really lept off the page at me. Invest in us and we'll give you a return. The return is across the board in all kinds of economic and social impacts, which everyone around the table is very articulately describing. The multi-year grant agreement, that's been on the table for a long, long time. We'd love to see it. It makes a big difference to us. We have to plan a long way in advance to get the best directors, to get the best artists to come and perform to audience in Scotland. We have to put them two, three years in advance, even more for the very best. Doing that without absolute financial certainty is a risk, a risk that we sometimes can't take. We're compromising on the quality of what we can provide to audiences in Scotland. Just to try and bring some of these things to life in a we case study, we run an opera highlights programme. We go out and take this on the road, four singers and accompanist. In four weeks' time, the spring tour is starting, we're going to be going from larks to duns to burgaries, doorway, beat a head, and many, many points in between. It's not just greatest hits, your favourite areas. We actually innovate within that programme. This year, what audiences, as part of the programme that audiences are getting, is a commission that we've put in, so that they're actually a world premiere being delivered around Scotland. We've historically gone out to 35 different venues in two tours and our audience feedback is amazing, our audience numbers are amazing. For many folk, that's their only exposure to the art form and in these other art forms that they get. For 24-25, in the anticipation of standstill funding, which is all we could budget on at the time, we had to think about how we can't really do 35 any more, how we're going to do it, we halved it, we pushed the envelope, pushed the envelope, pushed the envelope, ended up with a single tour rather than two tours going to 24 venues, so a cut from 35 to 24, so that doesn't sound a lot. That's 11 communities, all of which have quite a big hint of land of people who come in who won't be getting that for 24-25. Now, the increases that have been announced could actually, in theory, fund us to go back up to the 35, but it's too late. The contracts are signed, etc. Venues are booked, so what it will do is enable us, hopefully, to reinstate back up to what we were doing before to the 35 venues in 25-26, but that's why it's not just an academic we'd love to know in advance. Actually, it has very, very practical implications in what we can deliver. I think that's probably the end of where I've got to, but that clarity, how that 25-26, 25 million that was announced in the budget speech will be allocated at when and the rest of the 100 million. It would be fantastic to have that knowledge as soon as you can, understanding the constraints that ministers are under to deliver that. Thank you very much, Simon. Thank you for inviting me back today. I've got the privilege of speaking last, so you can almost guarantee that everything I was going to say has already been said, so I will be brief and perhaps focus on your questions around confidence and the strategy. First of all, we welcome the budget announcement of increased funding and indeed the First Minister's commitment to an additional 100 million pounds. I think that went some way to restoring some of the loss of confidence over recent months. However, as Laurie has set out really clearly, it looks like, although there is an additional uplift for national collections, national performing companies and indeed the VNA, which we really welcome, it looks like there is nothing similar for Creative Scotland. The implications of that for the RFO network all around the country of very small organisations is really quite serious. For the international festival, it means that we're looking at a 16th year of flat funding. You can imagine the impact that inflationary increases in our cost base are doing to us over that period, so 16 years of flat funding is extraordinarily difficult to manage for any organisation irrespective of how well they run or other sources of income they may have. I've worked in this industry for coming up for 30 years and I have never known it as difficult as this. That's the backdrop. Whilst the movement that we've seen in terms of the narrative from government is extremely welcome, I think that we have to commend the Cabinet Secretary for Securing and any increase in the culture budget at this point. As others have said, it isn't yet finding its way through to the places it needs to get. As Simon has said clearly, what that means is that we have to reduce activity. For us, that means that we can't do the closing event, that was a free event for people of Edinburgh to come and look at the fireworks. We just physically can't afford to do that anymore. What it means is that we have to row back from providing activities that aren't revenue generating because that gap in the budget, that headroom in the budget, isn't there. The people that suffer are the communities and the people across Scotland who need and benefit from cultural activity the most. As yet, the relief promised by the statements in the budget, the Cabinet Secretary's letter and the First Minister's words, aren't yet working their way through. Simon also mentioned the UK Government tax reliefs. They are incredibly welcome and they are what is keeping quite a lot of the sector afloat right now. Without UK Government support, I'm not quite sure where lots of us would be and I think we have to acknowledge that. Over the next 18 months, as I said previously, we have an opportunity to figure this out for the international festival from 2025 onwards, unless there is a significant step change in income. We are looking at all sources of income, not just public. We are looking at a seven-figure deficit and that is not sustainable. Something significant needs to change. We are and I know that colleagues around the table are very keen to work with Government to figure out what that could be. That brings us on to the strategy. I welcome the fact that it has arrived and it is here, but it doesn't yet, for me anyway, provide a clear route to delivering that transformation and that step change. It doesn't yet match up with the level of ambition that we are starting to see from the Government, in the words of the Cabinet Secretary and the First Minister. There is yet to be more alignment between that ambition and the tangible outcomes and actions. I think quite a lot of what's in the strategy is very internal to the Government. It talks about exploring things. It talks about scoping things. It talks about more strategies. It doesn't yet provide those bold, ambitious steps that are really going to change the fortunes of the sector. That's not there yet. Again, I'm very, very happy to work with Government on that. The essential question is that there is limited resource and there is excess demand. How do you square that? For me, that's what the strategy needs to address. If there's limited resource at the moment, how do we grow that pot? What are the examples that we can look at around the world? What innovative things can we do? Leone talked about how we are an entrepreneurial sector. Use our brains to help to think about how we grow that pot. Or, if we can't, what is the strategy for making those cuts? That isn't there at the moment because what is there is about growth and delivering outcomes for the country, but it doesn't doggers the difficult questions. It must address those so that at least we can have clarity. At the moment, we don't yet. I would say that it's a little bit of a mixed bag. I think that there is confidence, yes, that Government has heard, Government has listened and it's made some really positive statements about additional investment into the sector. Less confidence about its ability to really deliver on some of those difficult and and those difficult questions that need tangible and bold steps. Thank you very much. Thank you all for opening contributions. I'm going to move to questions from members. We don't have a lot of time as we have a second session, as you know, with Creative Scotland, so people could be succinct and maybe not repeat points that have already been made. If I could bring in firstly my colleague, Mr Bibby. Thank you, convener. Good morning to the panel. We've heard a lot about the ongoing crisis of funding and we've discussed before the perfect storm and affecting the funding for the culture sector. I'm just picking up a few things that we like to talk about outcomes and what we are achieving from Government spending. The Scottish Household Survey in 2022 showed that 74 per cent of adults attended a culture event or place of culture a decrease from 81 per cent in 2019 and if you exclude cinema it was 65 per cent in 2022 and that's down from 74 per cent in 2019. So access to culture opportunities has declined. Now obviously Covid and the pandemic has undoubtedly had an impact and there were some late restrictions at the start of 2022. But to what extent—and at one we've heard from Fran there about reducing activity, we've heard from yourself about reducing shows and reducing capacity—to what extent has this declined down to just depletion of cultural resource and infrastructure and given the current levels of funding as briefly as possible, do you expect us to be going back up to pre-Covid levels anytime soon or to see that decline of cultural opportunities, that reduction of activity, actually being reversed? Thank you. It's really sad to see those levels of participation drop off. I think there's probably two main reasons and you've highlighted on the first one which is audience behaviour since Covid has been affected so people are coming back less frequently than they did before and their behaviour has changed so I think some of it is probably down to that. I think some of it also, as we've described, is due to a retraction of services and I think we've talked today about how that affects some of the larger organisations and national companies. I think what we haven't talked about perhaps is where the majority of local provision is provided which is local authority services and we've seen what's happening right across the UK which is local authorities being unable to continue to support culture as it's not a statutory function and so I can only see that getting worse over the coming months and years unless again there is a step change in resource available so it's very difficult to see a way at the moment where those figures are going to recover. Simon, did you want to come back? Yes, certainly. We experienced a big drop off as a result of Covid, a changed audience behaviour which has quite markedly the quickest to return was the central belt, Aberdeen was, of our venues, of our main venues, Aberdeen was next and in Venice was much much slower and I think it feels in some of the more rural communities there still a reluctance to return so I think it's too early to say actually whether it's just activity or it's just Covid or what the balance is certainly from the 2022 figures because Covid was still such a big figure but you know we have all said how our activity has had to diminish for financial reasons it's definitely having an impact that I would say you know we're seeing a return of audiences now and we've also we've also seen a very changed demographic of audiences which has been some great social media work which is actually bringing in new people to go up which is which is great. I was just going to feed back from some of the conversations we've recently been having and you know yeah the majority of members are saying that there's no you know there's no doubt that they're having to cut back on activity and you know we all know that developing audiences cannot be done with inconsistent programming and inconsistent provision and that the issue about ambition the issue about having to scale down because it's so precarious what Fran was saying about lead-in times about how long planning takes two years minimum you know and all of those things together so without some sort of intervention I think we may well see that decline unfortunately. I think we have to analyse it beyond just the culture funding levels and what the culture sector does we operate and are deeply attuned to the wider local context national context as well as international and what we're certainly experiencing in V&A Dundee is a return of audiences but they have far less money to spend they're much pickier about what they will go for because tv is utterly brilliant so you've got a growth in international television you've got a growth in technology which is moving at a pace that often we can't so also a lot of us are pivoting very quickly to think about are our programmes relevant I think that's also healthy for us we have to remain attuned to society as it changes but the other things that we can see really clear patterns of are climate change train strikes and growing inequality especially in the city that we're in which is so ambitious with a deep soulful commitment to creativity in Dundee but the climate in Dundee has changed remarkably in the last three years we now have storm after storm through winter years which we see immediately impacts on our visitor numbers as well as our buildings resilience but there's train strikes as well throughout last year we could really really see the connection between the provision of public transport across Scotland and the UK immediately affecting and one thing I will say that it's brilliant is free bus travel for under 22s across Scotland so we see a growth in young people coming in but we're seeing people traveling by train probably reducing so I think that's the challenge of the strategy actually we're not working and operating in isolation we're completely connected and somehow the strategy has to cohere around that those complicated interacting elements and enable us to see that roadmap through as kind of Fran and others are saying but I think we would do ourselves in our own potential of disservice if we just analysed in quite binary terms a reduction in activity because the other thing if I'm really honest we opened with a program model of three major shows a year maybe we'd like to get back to something closer to two we're at one a year but three for me is a not our is actually a waste of our energy too and it also produces stuff that impacts negatively on the planet so I think there's a whole set of things that we need to be kind of concerned with as we try and analyse those figures because we all want to have greatest access for opportunity but sometimes I think as a sector we do also need to think really really hard about what it is we're offering as well as well as that kind of wider that wider context too so being audience led and that learning what audiences want is absolutely critical for all of us Shora and then we'll come back to Neil. Yeah me I was going to say pretty much what Leonie said that I think it's about people's disposable income and the impact of the cost of living crisis makes people much more clear about what they're going to pay for and what they're not going to pay for and but the other impact that that has as well is that you know we've been keeping costs of tickets frozen for years now because we appreciate that there's a much bigger challenge for our audiences our potential audiences and on the climate issue we focus so much more on local audiences and audiences from across Scotland who make up the majority of our ticket buy in public because it's about one more show not two more feet it's our kind of mantra so yeah we've got all of those competing things to consider and I don't think it's just as binary as there's less activity so there's less people. Those answers are number of you mentioned the local context and local government funding here I mean obviously we've talked about the national budget I know the culture council talked about the crisis and funding for local councils in the submission as well and in terms of the national organisations we've obviously heard there's one of the concerns about standstill funding and you know the lack of resource needed to meet the current challenges at the moment are we in danger of having a double family where the national funding isn't what it should be but we're also seeing local council funding being cut and actually you're gonna see that cultural provision both being affected by national funding and local funding decisions and related to that it's not it's not obviously for this year's budget but we do have proposals around the visitor levy which is going to go through parliament stage 1 is on Tuesday are there any thoughts on that? I appreciate a number of you made the point about private investment won't plug the your accessor as much private investment as you can and there's a lot of wishful thinking about how it can be plugged by alternative means but any thoughts on the visitor levy. I'm sure that you mentioned the visitor levy do you want to expand your thoughts on it? I mean I think that we welcome the visitor levy as a concept and an idea I think most of what I've seen so far has been an ever-growing list of what that might be used to plug and that concerns me because I think you know if we're part of the whole kind of attractive proposition that brings people as visitors to the cities in the first place then there needs to be some part of that income generated through the visitor levy that is guaranteed to go back into helping support everything that we've identified as the challenges going forward and not just for potholes and I mean it'd be great if it supports the city infrastructure things like you know technology and access to really effective wi-fi and all of those things that are also challenges for us but I'm not saying anything that is guaranteeing that some of that levy will come back into supporting the cultural sector that makes us an attractive proposition for tourists in the first place. Okay, yeah, Laurie. Thanks. Yeah, if I could just pick up your point about local authorities they are another really important backbone of the investment to local and regional cultural services and venues and they are under enormous pressure at the moment since the committee conducted their pre-budget scrutiny I know that community leisure UK has been conducting a survey of their membership and they have reported that 60 percent of Scottish members are facing a deficit budget and anticipate another third anticipate losing reserves by the end of this financial year. They've also been preparing for closures, we know that 29 percent are preparing closures and that there is a huge issue as well in terms of the lack of capital investment and that's something that I know that COSLA has raised and the huge estate that is in serious need of investment and also to meet the net zero targets and requirements as well and they've reported that at least 108 facilities are identified as being at the end of their lifespan within the next 10 years and urgently needing capital investment so there is a big issue at that local level and it's something that we need to be thinking about in parallel to how budgets are allocated and where the need is most pressing. Yeah, Simon. Yeah, I'm just to note that this week I'm south of the border and I haven't heard anything quite so alarming in Scotland but Suffolk County Council announced 100% reduction in their culture budget this week so ie zero so any organisation that was in any way dependent on that funding that's it. Sam you wanted to come in. Yeah thank you. A couple of points really, I think what we are starting to see and we've had contact from members about is local councils again revisiting the idea of cutting or vastly reducing their music services and their instrumental tuition services and that is something that is a real danger because music learning a musical instrument shouldn't be about whether or not you can afford it. It's a really valuable thing for children, young people to experience and we're very concerned to start reading reports again of councils considering that. I think there's a challenge for councils particularly with the freeze of council tax which restricts the funding they can raise through that method. The other thing it's worth considering as part of as part of the broader budget picture is the STUC's report on options for the tax system. They produced a report last year called called raising taxes to deliver for Scotland and set out progressive tax options that could raise £1.1 billion in the short term and £3.7 billion a year in the longer term. I think there's a danger that we talk about what we might like to see as a sector and without addressing the size of the pot for the Scottish Government to consider, we're discussing problems off the table if we're not careful and we need to look more broadly at how we can raise income for the Scottish Government in a progressive way to invest in the public services that the people of Scotland deserve and the arts and culture that people should be able to access. Neil, did you want to come back in? Thank you very much, convener, and thank you to all the panel members for their very candid evidence this morning. I've got two questions. The first is to ask about the salary costs, particularly around public sector pay awards, which I think several of you note in your submissions as being one item that has to be provided for. Whether there is a sort of tension between paying for that and that the 5 per cent efficiency saving are increases in funding being cancelled out effectively by the 5 per cent efficiency saving. That's my first question. My second question is to ask about the £100 million pledge of the First Minister from October, I think it was, and the promise of the first tranche of that £25 million coming in the next few years. Several of you have said that clarity is needed quite reasonably on those figures and what it's for. I wondered whether panellists think that that funding will be required to effectively, metaphorically speaking, fix the leaking roof as it were, or whether there was an argument that that funding, given it's more longer term in nature, should be directed to more longer term plans or strategies in terms of building a more resilient, more sustainable culture sector. Can I start with you? I think that you mentioned my first question in your submission. Yes, thank you for that. To answer your question, yes, it does effectively cancel it out, and what it feels like is that we're being handed a perceived uplift in one hand and then it's been taken away in the other hand. That's why we are really challenging to arrive at a balanced budget, and that doesn't take into account the second year of the pay policy award. As I mentioned, it also doesn't include the pension increases contributions as well. With regard to salary, it is a very real challenge. We are in a situation where there are various systems in place—non-compulsory redundancy being one. We are being asked about efficiency savings and reductions, but not being able to control how we might manage those rising salary costs without getting the adequate funding to support it. We are finding ourselves very much stuck between a rock and a hard place. As I mentioned, that is effectively left over by 5 per cent for all the other activity. We look to support that through philanthropic gifting, through self-generated income, but that cannot go towards salary and sustainable costs that are needed in order to operate. It is a situation that is only going to increase, and it needs to be addressed as to how we arrive at that solution. With regard to your second question about the £100 million, as I think was already referenced this morning, for longer-term plans, which many of us are engaged in, they start now. We are working on a public programme that is already two, three, four or five years out. We need to know what that budget is there. It is very similar to what Simon was saying. If you are looking to get the best artists coming to Scotland, you have to be able to go forward in confidence with that and be able to secure it. That is the same for the display of art and our exhibitions programme. It very much is something that is needed now. There is clarity absolutely needed. It sounds like a lot of money, but when you divide it up over five years, you are talking about £20 million, which then spreads very thinly. There needs to be some innovative solutions now as to how that is applied and shared. I know that the public sector reform clusters are looking at that and that is an on-going piece of work, but that is happening almost out of sync with the budget allocation. On the first question about salaries, we are not governed by the same public sector salary requirements. What that means in practice is that we do not pay at the same level often, and we have not been able to keep salary apace with inflation. Consequently, as many of us are seeing, we are having a workforce strain. We are having really good people leaving our industry because they are going to different industries where they can get better paid jobs, with more security, with better pension provision, with all those things. That is something that is just happening and is a consequence of the years of under investment. I think the £100 million pledge goes some way to making up for what has happened over the last 15 years, but it does not plug the gap. We are still operating with less resource than we had in 2008. Whilst it is incredibly welcome that there is more money coming into the system, as I said before, it is not finding its way yet into the places it needs to go. The answer is yes, it is going on fixing the immediate problems, but if and when it does come through, and we do get a multi-year long-term funding settlement that is an increase, we would be able to have those longer-term conversations and put them to future plans, because the impact of the situation we find ourselves in means we are in stasis. We are not able to be confident, we are not able to plan in advance. I have got our draft brochure here, it goes to print next week for this year's festival. I do not know what our budget is this year. I simply do not know what it is. So we talked about this last time, that means all of the financial risks sits on very small organisations and that cannot be a way to operate. So I am hopeful that if and when it comes through, we will be able to, as Anne says, engage with those leading international artists and commit, because at the moment the confidence is not with us internationally, because we cannot commit. So that is another knock-on effect. Second half of the question, if that is okay, because like Fran, we are not on NDPB, so we have got a five-year track record of over-asking of our staff and under-investing in them, which we have now got a tiny chance of trying to address a little bit to the extent that we would like. For me, the fundamental point about what is the long-term plan and strategic thinking about when that increased money comes has to be in the main action of the culture strategy. We have to start cohereing that culture strategy to how we understand what resource we have, what assets do we have, and at the moment I think there is still a gap, a practical gap between what the strategy is doing and what the funding is doing at a Scottish global level, if that makes sense. So everything that the Scottish Government has directly for culture, to the agencies and the NDPBs, but also local authority and other, I feel that they have to cohere together, otherwise we are just going to create a separation between an on-going separation between the rhetoric and the values that we are so good at talking about as a nation and then where the money goes, if that makes sense. So they need to come together. I think you also mentioned about fixing roof leaks and things. So some of the nationals, obviously, quite rightly have access to small pots of capital to just to maintain the estate occasional those moments for improvement, but I think capital is a really good thing for us to think about too, because the rest of the cultural estate has not had really very much capital spent on it since the inception of the lottery in the 90s, so you've now got a very ageing lottery estate as well. So I think thinking about grant and aid and capital together and I'm just hoping that 25 to 100 million is grant and aid and not capital because I think getting more capital would be great. Totally support, you know, Laurie and all amazing works, she's doing 1%, but I think we should be thinking how do we get it to 1.5 through grant and aid and capital. And then there's other models, so I mentioned earlier in my first bit, we established at city level and I recognise that Dundee's a small city, which means sometimes we can do things quite quickly. We established a Dundee culture recovery funding Covid where we worked with some of our philanthropic funders to create money that we then shared between five of Dundee's organisations by match funding it through a trust, so I do often wonder if there's other place-based or national approaches to how you do bring the private and the public together around maybe something that has a galvanising focus or something, because we all operate, you know, independently these things, but for us in Dundee bringing those different types of funders together actually enabled us as one organisation to create something that benefits five around Covid, so I'm trying to answer your point about what the idea is that we can generate about how we make more of that money. I think we probably have them within our organisations, but are any of them relevant to scale up? They just need a bit of time and thinking on them, if that makes sense. Fiana. Just starting with a small point here. I was going back to my colleague Liam's contribution in September and it was around the cross-portfolio contributions and that idea, that concept of prototyping to test some of those ideas and it would be great if that could be progressed in some way and not kind of buried away in the committee papers. Yes, son. I mean just to illustrate and make the point about 100 million once you spread it around the entire sector it's thinly spread. If I'm saying this because I've got the fingers that the numbers of my fingertips, if the national performing companies had had their annual grants reinstated to where they would have been from the beginning that would be an extra 14.5 million per year, so if we're talking 20 million yet and that's just the five national performing companies, so it's great but it's not going to go all the way. I'm glad that we've got the joyous and optimistic and positive version from Sona. I don't know if I could have understood a negative one. There's a couple of things that just don't have a grasp on maybe being a new member of the committee which haven't really been mentioned. First of all I'll understand the point that's been made about really we're talking about a long-term cultural impoverishment of the country given the changes that have been made, the reductions in choice and diversity that have happened which you've gone on for some time. I'll understand that point however what we're not hearing about is and it's very important the point that's been made that the Government understands where the sector is coming from, the pressures that are there that have been mentioned I think that's really important but I don't get any sense apart from Ann's contribution that the sector understands where the Government is. Ann mentioned 2008 financial crash mentioned 2011 has been the key year when it changed that's when austerity came in and also in the last session that we had I mentioned the fact that we have no comparison with a devolved administration the comparisons that we're giving weren't relevant ones and I suppose it's the point that the dialogue has got to be a genuine dialogue if you don't know where the other side is coming from you're not going to be as effective as you could be so maybe I'm getting it wrong and maybe in the discussions that people have with the Government there is a recognition of where the Government is in terms of that was also mentioned the energy costs the costs of staff inflation most of which the Scottish Government can't control so I'm just looking for a bit of reassurance that these things are acknowledged when you when you have the discussions and the other part was and this has happened a few times in my experience in this committee innovation and entrepreneurialism are mentioned I think by a convener there's been virtually no mention of it now I appreciate it will apply to different extents in different parts of the sector but surely given the gravity of the public finances that should be something that should be much more eagerly kind of and I think somebody mentioned the fact this has been tried and I think that Mr Bibby actually mentioned the very wishful thinking I don't know where you get if you don't have wishful thinking to be honest but is that something that's been taken on more seriously the idea of for those that are able to do it entrepreneurialism innovation new sources of funding because he didn't hear a great deal of that so anybody wanting to have a go I'd love to come back and it's great to get your reflections I I feel sad to hear what you're saying because I think that we're all really connected to the state of public finances and we work really closely with elected members at local level we work across services we work across education we work across social care we work across justice we also work with business and economic development and entrepreneurialism I certainly came here today to try and present evidence that we are I think a deeply entrepreneurial workforce with a deep commitment to innovation and creativity and also a deep commitment to understanding that the traditions of the past were the innovations of their time so that we have a really long term view on that so I'm really sorry if we've given you an impression that we're not connected to that that we're not deeply respectful of local authorities that are just keeping basic services going what we feel is that we can help be the answer to some of that and that we are adding value to where those services are also really really strained and we're sometimes the reason why we can even consider a tourism levy because we're one of the key drivers for people coming to the country we're one of the key drivers where people do bring get aspiration skills enjoy and you know make places kind of great so I really hope that we can convince you in the most compelling and deepest of terms that I feel that we we operate as public servants we see ourselves as entirely accountable to the public the money that we get but we also really love the fact that we can work with business and innovators and technologists to think about how we do improve it so I really hope that if we can't do it in this session we can all collectively convince you that what you've got in Scotland is a sector that for decades and in the hardest of times I think actually has ameliorated some of the the truths behind it and the hardships that the sector itself experienced as Fiona said so I we really really do understand the choices that the government are making and I think we've all tried to really really welcome those we also work within local authorities where we do see that the challenge of those service basic service deliveries but we're really really really really helped you were here to be that asset a resource that helps us get through that and also to yeah it's about dreaming and hope and the power of human imagination is one of the biggest assets we've got we're part of how you get that and it's just sometimes times have been so tough for us that we've been looking at how we keep people paid and positions and all of those sorts of things I'm really hoping we can change change that view that I hope you don't you don't carry for too long I've been here from others but also subsequently if anyone wants to put any written evidence about the efforts individual sectors are making in terms of innovative and entrepreneurial funding that'd be really helpful but I don't think anyone else wants to come in on those points Fiona It was something I was thinking about last night just starting my career in the early 90s and just the difference between what subsidy does now and what it did then and you know what's really important is to understand that the leverage that it brings you know so the starting point of today's conversation is about you know the budget but you know it really has flipped and that of course the public subsidy is absolutely essential but as everyone's talked it's part of a much bigger you know cycle of sustainability and funding and in some cases makes up quite a small percentage but an essential percentage in order to grow that to grow those budgets I think so I hope that makes sense it's just like when I worked for a touring company in the early 90s you know we were pretty much 100% subsidised we made a bit of money from touring and it was really important but actually the opposite is the case now again just to echo Leonie's sentiments it's like what we might not be sort of saying outward shouldn't then be taken that it's not happening and that it's not something that we're pursuing at the national galleries of Scotland you know our new Scottish galleries we're very much through a kind of innovative way of funding both through government support but actually also through private philanthropy as well and a very successful campaign over a very difficult period of time with a pandemic and with various unforeseen issues that we had to sort of deal with and so I think there is the evidence happening day in day out of organisations sort of stepping up and trying to step in and fill that that gap in that void but I guess that the critical message that we're perhaps trying to impress upon you all today is that in order to unlock that potential that entrepreneurial spirit there does need to be a sort of base level of funding because I believe it was in Laurie I think it might have been in culture counts written submission reporting I think from fruit market saying that you know it's very hard to get support and grants and sponsorship if there isn't that sort of confidence and underpinning coming at a government level so it's about getting that equation right where we are then able to go out into whether that's having the resource of a development team that can then head out into the world and be you know sort of raising those funds and bringing it back in and easing that challenge that financial challenge that we face so it's something that we're all I think very much trying to do but it's again back to what's been said at previous meetings at this committee with just a shift in that dial if you move it back from this sort of you move it forward rather from this negative position to a more positive position you will see the the impacts sort of yield manifold results in the positive so it's about trying to get to that that sweet spot. Likewise I would hate you to feel that we don't appreciate how difficult things are for everybody including government and I think that's why I think all of us welcomed the budget and welcomed the moves that have that have been made it is unprecedented what we're feeling I said I've worked for 30 years and I have never known it's so difficult and I think that's not just in culture it's it's in society more more generally and so we're we're reflective on that I think if you're picking up any negativity or frustration it's because it wasn't always thus we're in a particularly difficult situation at the moment post Covid post the you know the UK economy you know what happened in the last couple of years but it hasn't always been thus so we've had 15 years of this under investment in arts and culture so if even 10 years ago there'd been a little kind of inflationary increase or if it had kept up I don't think it would be as acute as it is now and I think what you're what you're experiencing or what you're hearing from the panel is that you know others have said we are just cut to the bone there is nothing left and so that space to be entrepreneurial is really challenged because we are literally trying to keep the lights on we're literally trying to make the salary bill we're literally trying to do those and so there's a whole diversion that Leone said earlier around the intellectual capacity of us to do anything other than keep the show on the road and so we'd love to do that but I think one example of where there has been the space created to do innovative thinking again I come back to the UK tax credits around exhibition tax relief orchestra tax relief theatre tax relief and so on because that has that has required us in order to access those you have to look at research and innovation to create new product so and it's been revelatory so if there was something in the strategy that was that was similar that allowed us or required us to innovate to access funds that's what you would get so it's been that's the thing that's lifted the lid so it's that sort of joints working between government and the sector that will enable us to innovate and enable us to to be positive and forward looking so but I completely take your point it's a partnership I think I'm going to come to show and I think I have to be the last one on this question right up against time I can just ask Mr Stewart if you got a new line of question you still want to ask or it's it's not new but it's very similar to what has been asked convener but it does have you know I think you know today we've seen you know confidence is here but there's fragility amongst that confidence and you've you've all intimated that it's the cost of running your organisation that's the problem it's attracting that performer or staff it's rewarding that performer or staff and it's maintaining that performer or staff and at the moment that is where you all find yourselves having a real difficulty in managing the process for the future and you've all done a lot more for less we've seen that over the years but at the same time you've touched today on about what the strategy should be drawing to do to maintain and sustain that because if you don't maintain and sustain that then you are going to see the sector decimate it there is no question the writing is on the wall you've talked about being cut to the bone you know keeping the show on the road for some of your organisations I'm not sure if that's going to be sustainable with 100 million pound in the timescale you've been given okay all right people reflect if they want to come in that go to bring Shona in and then I'll come to you Fiona thanks yeah that's a great summary and to come back to Keith's point a challenge accepted Keith you're going to be inundated with examples of the entrepreneurialism and innovation that we've all had to had to show unquestionably particularly over the last five years I mean to give you to give you one simple example you know the fringe the biggest performing arts festival in the world in Edinburgh has a marketing budget global marketing budget of 200k and yet we were able to reach 20.6 million on our social media alone and that's because of our entrepreneurial innovative spirit a partnership with TikTok that really worked for us and we do that across everything that we deliver and the challenge as people have already said is that philanthropic givers are out there and we have the potential to really grow our support particularly in the us we had 353 shows from the us this year it makes up a tenth of our programme it's massive huge opportunity for philanthropy there but if we don't have the staff to manage those relationships to build those relationships if we don't have the money to go out and be in the us to do the events to join tartan week we went last year but we went at risk and we went at a cost that is building on our deficit so of course we can be entrepreneurial and innovative we already are but it's the core problem it's the if we don't even have that basic foundation of people and we're not looking attractive as a sector then it's really bloody hard to be innovative and entrepreneurial as much as we can be and then the final point I'll make as well because I don't think anybody's made it yet is on commercial partnerships it's really well documented particularly in the last year just what scrutiny there now is on the art sector in particular around its commercial partnerships and its choices of commercial partnerships and again this is where just an empathetic and understanding and communicative relationship with Scottish government around things like alcohol sponsorship for example which we know is kind of still in in conversation coming down the tracks but yet we couldn't have raised you know the 50 000 pounds from Phoebe Waterbridge and matched it with 50 000 pounds from Edinburgh Gin and Johnny Walker Princess Street if there's a restriction on alcohol advertising or alcohol sponsorships and there's many other examples of of that kind of scrutiny on ethical and appropriate kind of commercial partners so the squeeze kind of seems to be coming from everywhere and yet but I will send you I will send you a good dossier on the entrepreneurial spirit that we've shown I'm going to bring in Fiona for final small contribution and if anyone still wanted to add to that discussion we have an open invitation from the committee member for further submissions so please do yeah this is um this is a bit cheeky of me it's just while we while I have you all here um it's on the um the tax credit the theatre tax relief um issue you know I just think as a cross party committee there's a real opportunity for you to to help us you know encouraging the Scottish government to act but also um you know really um helping us with um elevating that ask to so that that can be maintained at the higher at the higher rating for a longer period of time and perpetuity would be the absolute ask um you know so and obviously we would encourage imperative for our museums and galleries colleagues um in any of your work but if you need any more information about that that would be extraordinary if you could add your voice to to our calls for that to be extended thank you on that note I'm going to suspend till I witness this to change over a very very short three minute or so comfort break for members to our session on budget scrutiny and our second agenda item is um a session with creative scotland and we're joined today by Ian Monroe chief executive of creative scotland and alice revans director of strategy and planning at creative scotland um so I think I wrote them with a question about the I don't know how much of the previous session we were able to see but obviously people are interested in the restoration of the 6.6 million pounds particularly to cover the reserves but a bit unclear about how that will continue to work towards um a programme of of multi-year funding so I wonder if you could just expand on what your plans are given the the settlement that you have in front of you at the moment yeah thank you and I'm sorry if you didn't manage to see all bar the last few minutes of that session so um so uh good morning everybody and thank you for inviting us again uh to give evidence so we let me set out the broad context and then answer that question directly because there are subtleties and complexities inevitably in uh the the budget settlement and the way that that uh dynamic works especially because we have national lottery funds as well as the Scottish Government grant and aid funds um but nonetheless we do welcome the the 24 25 budget it is a single-year budget and we are pleased that the Scottish Government have honoured the the commitments they gave last year when the 6.6 million in-year reduction was applied so we've got from the settlement plan for 24 25 13.2 million pounds that's two tranches of 6.6 million pounds one tranche of 6.6 million pounds is what we would ordinarily expect to see in our budget because it's part of what makes the the funding contribution towards the support for the regularly funded organisations the other tranche of 6.6 million is the recompense in effect of the 6.6 million reduction from the the current year budget however this is part of the subtlety and the the complexity the second tranche of 6.6 million related to the the national reserves position is grant and aid funding our national uh our reserves are built from national lottery funds and we can't mix the funding streams we need to um spend the grant and aid in the year in which it's given so what's happened is that we used our national lottery reserves last year to offset that budget reduction and they will remain at that reduced level of less than 6.6 million because of that and we can't return the 6.6 million that we were due to receive this year this coming year into that space so what the Scottish Government have indicated is that on that second tranche of 6.6 million they want to have a conversation about its intended use and purpose so the net effect and we haven't had that conversation yet so i don't know what the thinking is or will be on that but we want to get into that very very quickly to enable us to understand but the net effect overall is essentially a year on year like for like before the the in-year reduction had been applied a sort of flatline position having said that there is a small margin of five percent efficiency against our overhead which is just over 300 000 pounds which is part of that settlement that we're going to have to accommodate but that's not on the front face front line face and grants budgets okay thank you for that i've got supplementary mr Cameron there i'll bring in miss warbs thank you for explaining that because i was going to ask you about two two persistence from the Scottish Government the first was the deputy first minister when she made her budget statement when she said uh that this was restoring the 6.6 million to create a Scotland for their utilisation of reserves and providing a further 6.6 million to offset their shortfall and national lottery funding that's what she said in the chamber here and then the cabinet secretary wrote to the committee on the 19 to december the same day and said very pleased to confirm that in 2024-25 the Scottish Government will reimburse creative scotland this 6.6 million and go further by providing an additional 6.6 million and we'll work with creative scotland to target this funding to ensure it is best directed to support the culture sector so that explains uh these two two statements is that is that correct that's correct yes and we've yet to have that conversation and in terms of creative Scotland where would you like to target this funding well there are a range of options i mean you've you've seen the evidence that's come before you it's reflected in your own report previously and i'm sure you've just heard more of the same again we've reflected it in in our own submissions you know there are the the settlement is welcome and we absolutely acknowledge the wider kind of extreme pressures on public finances so in that context that's why it's welcome but it is in the context of ongoing and severe and high risk challenges that the sector is currently having to face so there are there are options to place that 6.6 million towards in that direction but some of that should also be borne in mind for individuals as well as organisations is what i would say there are pressures on both fronts which we can get into through through other questions and of course there are developmental spaces i caught the very end of that last session with the previous panel about developmental funding to unlock wider entrepreneurial and innovation in the sector and there's a kind of fourth area i guess that's kind of three areas so far the fourth area would be around other policy priorities in the programme for government be around inclusion or child poverty children young people those kind of policy agendas so there are a range of options i think what we're very concerned about at the moment is that the short term immediate challenges facing the sector are very urgent and we we will you know stretch that 6.6 million as far as reasonably possible but it could go legitimately into every one of those four spaces and deliver incredible results but nonetheless it's time limited and challenging and i think for us again we may get on to it but 100 million pounds announcement is of course welcome too in the current context but i think we all know that we could spend that several times over and we've got some indications of how that play out but it's not clear which organisations are going to get how much and when but what we would be keen to see even beyond what's being set out already is that the Scottish Government were able to go further and go faster on the commitments that have been indicated and indeed on 100 million itself our ambition would still be to see arts culture and heritage spend in Scotland at at least one percent of the overall Scottish Government expenditure thank you thanks very much and good morning first of all you had obviously said after the budget was announced that you were able to maintain funding for the current cohort of the regularly funded organisations and that the contracting process would take place in the new year so assuming that's well underway and continuing was there any discussion at the time of whether that funding could be expanded or reduced or was it just agreed that you would maintain it at the same level and then my second one is the intention that was announced for further 25 million pounds to the culture budget in 2526 and forgive me if i have missed something misunderstood or you've already alluded to it but is there any clarity on how that funding is to be given to the culture sector are there any caveats is it subject to anything okay i'll answer the second one first because it's short in a sense because we don't have an indication from the Scottish Government of or an understanding of how that 20 at least 25 million is intended to be distributed should be clear that the 25 million as part of the hundred million overall is for arts culture and heritage is not in the name of creative Scotland but of course from a creative scotland point of view we would be advocating for as much of a contribution to our budgets as possible from that because we then translate that into third party funding immediately in in the hands of the sector so we don't have the detail on that yet i'm afraid and we need that detail sooner rather than later we might come to multi multiple year budgets as well in order to make the most informed decisions around our multi year programme which is well up and running and we've shared the the demand figures for that in the in the evidence we've already given so um we will want to have conversations with the Scottish Government about that 25 million commitment as soon as possible but for absolute clarity it's not currently in the budget so you would expect it to be additional to what is currently in the budget within the space of the next financial year so it's for 25 26 onward yes so my understanding of the hundred million is that it's not a total package of 100 million to be spent over the course of five five years for absolute clarity my understanding is that it's a cumulative building of the baseline year on year so that coming year five it's a total of 100 a hundred million pounds a year above what the current baseline is thanks yeah but on the first question around the conversations for rfo funding we gave a commitment some time ago that our intention would be to sustain subject available resources the rfo funding at current levels we don't have the financial wherewithal to increase those current levels two things that you might have in mind one is the 6.6 million which i've touched on already um is is one avenue that some may may advocate for and may be part of a discussion with government the other is um our national lottery reserves position but because we're now depleted on them they are protected and allocated for the original intended purpose by our board to support the transition arrangements for organisations that will be unsuccessful in their multi-year applications once the decisions are taken from later on this year so we're protecting that it's at a de minimis level now so we can't move into that space because they're allocated so we're pleased to be able to give a degree of stability to the rfos based on on flatline funding based on the settlement that we currently have but um a point of it i would also want you to be aware of is that whilst the processes are up and running all of the expenditure especially higher levels of expenditure still um even with the budget commitments still need to go through what's an internal Scottish government process the accountable officer template as it's called um to unlock the actual cash and see that flowing into the hands of organisations and that is an additional piece of administration that takes a bit of time but we've got a year or two of experience with supporting the Scottish government um enrolling out that to avoid any delays because we have seen that in the past um where we've been right up against the wire and potentially not able to honour commitments that we've made one again these are just all sort of clarifying points um i appreciate you wrote as recently as the fourth of january so it's unlikely that there's been big changes since then but you had said at the time that the national lottery budget hadn't been finalised or hadn't been approved rather by the board yet um and how do you anticipate it will compare with 32.4 million pounds of last year yeah so uh just a reminder again for the way in which the national lottery income stream works unlike the way the Scottish government budget works where there's a kind of identified budget commitment at the start of the year because of the nature of the national lottery it's borne very largely from ticket and scratch card sales so it's very dynamic so it's a planning figure that we have at the start of the year and we get reliable insight from the the operators and the dcms on the forecasting as we go through the year and it's only when we close the books at the end of the year that we know the actual return of the of the budget level and it's sometimes from that when there's an upswit compared to the planning uptick rather compared to the planning figure that we we can build reserves for example but the the planning figure assumption at the moment is broadly flatline to answer your question very directly it's worth also being aware that there is a change in the operator of the national lottery for the first time since it came into existence in november it will be 30 years old it's been an enormous contributor to support the arts and and screen and indeed communities and sport and so on over over the over the period but that change in operator is happening as we speak they will actually come into place from February and what we will see for this next license period is that new operator bring new innovations to the way in which the national lottery is run in order to strengthen potentially under the license the terms of the license the income from the national lottery over time and deliver more benefits therefore back into into the public from the the national lottery returns. Thank you thank you and Mr Monroe we heard from some of the organisations about timings of the essence here and they're already having to commit to commercial contracts not knowing what their budget is for this year so when you say you to have the discussions with the government is it is that dietied already or are you getting indicative timeline as to when that process might be finished yeah I mean we have regular contact as you might imagine we have formal meetings the sponsorship meetings with the Scottish Government officials as well as direct conversations regularly with the cabinet secretary and the minister a specific sit-down meeting on this is not singularly scheduled yet but is in hand in terms of making sure that we can get that as soon as possible to reach a conclusion but yeah there's still more time. Thank you. Sorry apologies convener but just to be absolutely clear the contractual arrangements are moving forward now on the basis of the commitment that we've given to the regularly funded organ organisations to enable us to be up and running with them and their contracts but also to unlock the cash the accountable officer point I was making earlier on to make those payments from April. Thank you Mr Rascals. Just to continue to discuss with you what your priorities might be in that discussion with government I mean we've heard again today as we hear a lot in this committee about you know the power of the creative sector it's ability to innovate it's ability to tackle so many societal issues whether you know we're talking about inclusion whether we're talking about place making and I think you know some of the work of the creative sector during COVID through culture counts and everything else has has really shown what that that power is and yet so many of these organisations really struggle to get funding from creative Scotland and I've raised the case of creative sterling who perhaps don't easily fit within any within any of your boxes for regularly funded organisations and are now in a very vulnerable position in terms of their own funding but clearly could contribute to awards a whole wide range of government local government national government objectives if they could find an appropriate funding stream through creative Scotland to be able to to continue so I'm interested in in in what that conversation now looks like with government because you clearly have a you know an ongoing difficult situation with the RFOs their need for core funding but there's also this potential which we need to unleash and I think was demonstrated through our own committee inquiry into into culture and communities which we're waiting to change that model we're waiting to see the cultural sector the creative sector actually bring in you know the changes that we need but but feels that we're always on the cusp of something so is this a point to really to really start to fund some new models and to really lean into the innovation that's there in our communities but is a risk of disappearing maybe without the funding I think there is much at risk here but it does feel like in the in the light of the indications from the Scottish Government about the 100 million as I said we could spend it several times over and we would want to see it go further and go faster that's my point about the 1% but the extent to which it can enable us to turn a corner it feels like we're on the cusp of it if we can see more urgency in how that is deployed you're right to point out the size you know the the growth potential of creative economy I mean it currently employs 155,000 people through at least 13 and a half thousand creative businesses and it's generating already four and a half billion pounds net GVA for the Scottish economy it's a growth sector it's reflected in the national strategy for economic transformation and not just in Scotland it's recognised as such across the UK so and it's an innovative sector if you get the the conditions right you can unlock all of that potential not just culturally not just socially and not just economically so I think there is much potential there the issue at the moment is that there's so much effort and emphasis going into as I heard in the previous at the end of the previous session literally trying to keep the show on the road and keep the lights on and if you can liberate people just by nudging that dial through what the 100 million at least could unlock then you liberate cultural benefits social benefits and economic benefits you're absolutely right having said all of that what we're seeing is the contraction of the other parts of the funding landscape which are so vital and important for the health of these organisations so a range of data sources that we've got what we're seeing is the displacement effect of the contraction of earned income or philanthropic giving or other key local government funding or or public other public funders contracting and displacing it into creative Scotland so our demand is at the highest levels we've ever seen I think we're on course this year already to be experiencing the highest levels of funding up the number of funding applications and value of ask them we've ever seen and I've been talking about this for nearly two years now my concerns about the untenable nature of that and what it means because these volumes are going up I mean our volumes have gone up over 50 by volume of applications but also by value of the ask earned income is dropped by half local government funding these are all compared to pre-pandemic local government fundings at least down 20 percent there's no financial resilience left in the unrestricted reserves of the sector it's fallen to below 20 percent of unrestricted reserves for organisations compared to pre-pandemic where those reserves even exist so it means that there's even more pressure on creative Scotland because those volumes have gone up our success rates have gone down and we're having to handle even more unhappiness about the limited increasingly limited abilities we have to be able to support people positively where people do get funding they're doing great things there's some really good things still happening there's still money in the system but there's not enough and I think so it's not an issue of process it's actually an issue of pressure on resources and I think we too would want to be able to get to a position where we can recalibrate and see the budgets recalibrated into higher levels of expenditure in support of I can't talk about individual organisations in this forum but but nonetheless it does illustrate the depth of the challenge that we've got and it's not happy position for any of us none of us want to be having to do that I recognize that that's a huge the challenging position for you to be in because you are effectively a funder of last resort for many of these organizations like like creative sterling but you know it does feel that we're at a pivot point potentially and that a way forward would be to see much more cross portfolio funding for culture a recognition of wider benefits that it that it can bring in terms of health in terms of other other objectives that government has as well but that it's very difficult to make that case for wider cross portfolio funding unless you have the projects being funded by somebody right now to actually prove the benefits that they can bring to wider society so you know I suppose I'll put that back to you that unless there is some funding of these organizations so that they can prove that value it's very difficult to then build the case for wider cross governmental funding and that's a very difficult situation to get out of but we've got to show that it works before you can build the case further I hear you I mean you know bottom line is we can't give people what we don't have and that's my point about the resourcing but having said that there are enormous amounts of evidence there that we have at our disposal and we deploy it it's academic research it's also practical longitudinal research that demonstrates all the benefits and the models it simply is a resourcing equation the more that we can invest in these organizations the more they will be able to deliver tangibly those benefits and that's why we are we are at a kind of crossroads in a way to to see as much funding flowing as soon as possible to reverse the equation and trajectory that we're currently on we are acting as flexibly as we can on the resources we've got available but we're having to make tougher we always have to make tough choices there's always more demand but we're in an extreme situation at the moment where it's the worst we've ever seen it and we are having to make very unpalatable decisions not because there's anything wrong with the organization what they propose to do what we would want to support them to be able to do but very simply because the resourcing isn't there so it does illustrate the depth of the challenge that we're currently facing but if we can see the resource equation turned around sooner rather than later then we will be able to turn that situation around more comfortably but the fragility in the sector is the thing that we're concerned about as much as anything because organizations need to survive to be able to get there into that place of thriving on the point about cross portfolio I wanted to pick up as well because I think there are two aspects of budgets here one is the confidence that comes from having dedicated culture budgets in and of themselves being at resourcing levels that are as high as possible but also and we've got all the evidence for this two is the benefits in a partnership with those other policy areas health education the environment for example to be able to have a dialogue there about preventative spend agendas and actually the bigger public sector benefits that can flow on finances as well as the material benefits to society and the country at large so there's twin tracks there culture budgets in and of themselves but also the cross portfolio work that we will continue to do but that is often a longer slower burn and I do appreciate that other other public policy areas are under extreme pressures and I haven't to make tough choices too but nonetheless more than ever I think there needs to be a coming together in collaboration that enables us to see what will be relatively modest but meaningful amounts of money for the cultural sector to intervene in those other public policy areas and actually start to turn the equation around and feel all the benefits of that yeah feels like a space where we could have genuine synergy if there was the will and coordination to do that okay thank you miss a baby thanks computer you've talked about the importance of multi-year funding even consistent in the the need for that I think the indication of the cabinet secretary's indication of funding for year 2025 2026 of 25 million is actually significant in that regard but I appreciate your looking for you know more detail this year never mind next year but you know given the given the government you know as previously said can't do multi-year funding announcements but has then gone on to indicate that what we can expect to see in 2025 2026 I do think is significant and we've obviously had the pledge of 100 million pounds over the next five years and so would you agree that that is significant the government has actually said that and given that you know should the cabinet secretary actually go further and actually give us as a minimum an indication of 2026 2027 tell you that further planning provide the clarity that we've heard that's needed before and the multi-year fund an envelope for multi-year funding as you've previously called for yeah so yes it is significant but we will be pressing for the detail of that and I think what I've seen in terms of the wording is at least 25 million we would obviously be as I've been saying keen to see from the 100 million commitment over five years for that to go further and faster including in that year but the point about multiple years absolutely so what we we've got our multi-year process up and running it was predicated on an assumption that there would be multi-year budgets available clearly that's not playing out because we're still on annual budgets but we will be working our way through that process we've got 361 applications currently requesting 96.4 million pounds it's three times the current available equivalent so what we will be doing is as we work our way through that process is having a dialogue with the Scottish Government to understand how much more clarity we can get on not just for the proportionate part of the 25 million announcement will mean for creative Scotland potentially but actually can we go further than that for 2526 and indeed can we go further than that in terms of years so that is a conversation again yet to be had but it's going to be important for us to get as much clarity around that as far as reasonably possible respecting parliamentary processes of course but indicative budgets would give us a kind of planning figure a series of planning figures and a planning horizon to enable us to make the most confident multi-year decisions which will conclude in the autumn of this year and start from April 25 onwards if nothing changes if there was no 25 million or creative Scotland share of it and there was no hundred million if we were on flatline budgets it would be the toughest environment we would be making fundamental decisions that would be in effect leading to the collapse of parts of the sector not a position that any of us want to find ourselves in so in the prospect of new resources coming on stream we'll want to see as much as soon as possible and certainly clarity to any of us to make the decisions in the autumn. I'm interested in the relationship that you have with the Scottish Government and first of all I should just say that I endorse the points that Mark Ruskell has made in relation to creative stirring I'm also being contacted by them as a local MSP. I attended an event in just before Christmas where the creative Scotland person that was there felt able to launch an attack on the Scottish Government to do with funding which was given added spices or sitting next to the culture minister at the time but that and the cut that was referred to if you remember the kind of apocalyptic press release that went out just before we sat for that round table about the 6.6 million pounds and the contrast with that language is what we're hearing now and in the last session we just had where it's pretty meaningless the fact that it's been reinstated in fact I think in the last session somebody said it won't feel like new money I think it probably will do to those parts of the Scottish budget which are being cut but so the downplaying of that the upplaying of the potential cut just in relation to the Scottish Government two questions I've one is you mentioned in response to Mr Ribbage just now about the detail of the budget it'd be interesting to know what you fear that you might not get in terms of detail before the budget obviously there's been a lot of discussion before the budget which I would imagine would fill in most of the blanks but maybe not maybe you have a fear that some parts of it won't be laid out for you so it'd be interesting to hear in that and the second point is I still can't get my head around this national lottery stuff I mean I've seen it referred to as a shortfall and reserves so just a way explainer as to what the Scottish Government's responsibilities are I'm reinstating any shortfall or if the shortfall's been caused by the Scottish Government perhaps that's the point that's being made there so just in a way that perhaps I could understand what's going on there in relationship between the national lottery funding and what the Scottish Government's obligations are in relation to that and also as I say what detail that you fear you might not get prior to the budget okay thank you so what we will be pressing for on the budget is as I was just saying to Mr Ribbage about as much clarity as possible on the likely resources that will be available to Creative Scotland indicative planning figures to enable us to make the most confident decisions for the multi-year funding support for the years ahead it's going to be critical to get as much clarity on that to make the most confident decisions as possible because without it we will have to make our own planning assumptions and it may lead to unintended consequences on the number of applications that we're able to support and the ramifications that flow from that it's not really for this year's budget sorry it's really for how it's going to play it over the indeed yeah so the 24 25 budget has no material bearing on the the multi-year funding as such but we will need clarity for 25 26 onwards that's what it's what I'm suggesting so unless we get that it's going to be a very challenging set of decisions with even more controversy attached and even higher risks attached in terms of what it means for the sector but as I've said earlier positive recognition of the statements of intent from the Scottish Government and our relationships are very positive with the Scottish Government we've got a very direct open dialogue with the cabinet secretary the minister and with the officials for us to set out echoed by evidence and reports from this committee amongst others the realities of what's happening on the ground at the moment but actually what could be achieved with the unlocking of that hundred million pounds as soon as possible so that that dialogue will will continue that's all sort of contextual but the realities are there in terms of what we're also setting out for you today in the committee on the sort of dynamic relationship between the national lottery and the Scottish Government the interplay on that the so two thirds of our budget from the Scottish Government one third is from the national lottery we're part of a family of 12 distributor organisations on national lottery funding across the UK we have a relationship back to the UK Parliament and the department for culture media and sport and ultimately it's an income stream that complements the Scottish Government income from granting aid but we have to account for it in an absolute way so we have separate accounts for national lottery that are laid before the Westminster Parliament not just the Scottish Parliament and Scottish Government can give us letters of guidance but are limited in the extent to which they can direct us on national lottery funding per se we do get you know we do have directions as such but the extent to which it's going to once removed from the Scottish Government funding is by nature of the fact that we're a distributor across the UK as much as as much as anything and we've got in accounting for it we've got flexibility over national lottery funding year on year so there's no annuality unlike the government funding so that's what's enabled us to to flex over the years and build up national lottery reserves as we need them sometimes there's nothing sometimes there's sizable amounts for specific purposes but the the choices on the the expenditure for national lottery funding although framed within the policy context as a public body aligned to the Scottish Government the the actual detail of the choices around national lottery spending are in the hands of creative scotland board rather than the the Scottish Government directly per se but nonetheless we see it holistically but what we need what's at the heart of national lottery funding is it's called the principle of additionality in that it's the national lottery income is intended to not substitute for what should otherwise be government funding so it's there to add value what we've seen over time is that principle being eroded as the pressures on the government funding have been coming through and the limitations on on that coming through is it's relied heavily on national lottery funding to enable us to do some of the things that we're currently not able to do from Scottish Government funding so for example all our funding for individual artists beyond those that are indirectly supported through the support for organisations that we give but direct funding for individual artists currently supported solely from national lottery funding so in a way what we can see if the conversations with with Scottish Government enable us to do this the way in which some of that 100 million might flow into creative scotland as if we can use the individual artists for an illustration beyond support for our organisations if some of that 100 million was able to support individual artists directly the resources that we currently have from national lottery funding we then have a that are supporting individual artists we then have a choice to make about can they be redeployed in support of other areas of activity so what you get is an added value from the interplay between both industries but actually it's predicated on a confident core grant and aid settlement from the Scottish Government but I see there's an increase sorry I see there's an increase in other arts proposed for this year of about 12 million pounds I think but can you just explain the national lottery shortfall sorry yes so where this comes from is many years ago now there was a high watermark for national lottery income that was about 35 to 36 million okay and I think it was in 2017-18 there were signals that it was starting to fall and fall quite dramatically and this was at the point of which we were about to make decisions on what's currently called the regular funding programme the rfo programme which was commencing from 2018 and in the light of that drop the Scottish Government stepped forward to address it and enable us to make confident decisions around the rfo programme at the time and the drop the equivalent drop was 6.6 million so national lottery dropped by 6.6 million the Scottish Government stepped forward to address that and it enabled us to to maintain a budget that was is the one that we've continued to this day it's never been consolidated in the books as it were so it always sits as 6.6 million to address that shortfall what we need to do going forward is to understand how that can become consolidated as our baseline hopefully increases as a result of the way in which the 100 million will move through so I hope that explains the background to it but that's why it's categorised in that way but what we do is continue to use that 6.6 million to add to the unrestricted grant and aid that we get from the Scottish Government and together it totals just over 33 million that supports the rfo programme. I could just ask the supplementary around that so you said that it's dependent on national lottery income sales which is understandable but is there a formula there? Is it a proportionate cut or shortfall to yourself or to all the organisations I think you mentioned six or seven organisations that are funded through this process? Yeah so the 12 distributor bodies across the UK covering community sports heritage film and the arts so it is determined through a formula so broadly speaking and everybody feels the benefits of the up and the down of ticket sales and so on and it is proportionate our overall percentage is 1.78 percent of the overall income and the detail of all of that is kind of set out through legislation in a way. 40 percent of support goes to communities and 20 percent to each of the other areas is broadly and then it then gets divvied up by the four nations so there is more information that can be provided on that but it is set through formula and it's legislation in the UK Parliament that determines that. Across the four nations is it geographic? Is it a population distribution in terms of? The formulas remain the same since the beginning as far as I can recall not the percentage allocations across the good causes as they're called but the percentage of shares so the 1.78 percent hasn't changed. The proposed budget has given us some sense of stability there's no question about that but it has not alleviated or has not addressed any of the issues when it comes to the increased running costs the following income that's being experienced and also implications for something like fair work that may have to be added to the process. In the last session there was some discussion about the UK tax support that was given and has been welcomed by some organisations. It would be useful to take a view from Creative Scotland about what they think of that situation and how it affects the current running of many of the organisations at present and what you would like to see potentially for the future on anything like that should it be included in the strategy that was discussed at the last session about the implications of that. It would be good to get a view from Creative Scotland on that. I'll say a few words and then I'll invite Alistair to add to it. It's very important. I think that it's an avenue of income for organisations that is key to their core stability but it is temporary and there have been extensions and so we would whilst these are political decisions of course but we would be keen to understand and see how far that commitment can actually go beyond the current commitment that already exists. Just to be clear, it exists for screen as well as exhibition sector as well as theatre for example including gaming too. I think that they are very important. So whilst there is a heavy reliance on core subsidy from public sector funding including importantly from Creative Scotland we would want that to be as high as possible but the plurality of funding for organisations from other income streams is really important because it enables them to have more autonomy in terms of their own business affairs as much as more resilience in terms of the way in which their business models are currently fragile. So for us it's very important for that to continue I would say. Yes so there's eight programmes now in total and we're doing some work with Arts Council England to try and quantify their worth across those eight programmes. Some of the earlier ones for film and high-end TV that has happened at UK level film is estimated to be worth between 1.2 and 1.7 billion annually but importantly a third of the projects that are supported report that they wouldn't have gone ahead without that support and we want to understand that picture across arts and culture more broadly as well I suspect it will be the same kind of story. So that work is beginning and we'll continue to advocate for as Ian says for the continuation of those programmes. They are political decisions in the sense about whether they go ahead much like TVL and others but if that revenue is going to be there then it's a hugely important part of the mix for the sector. I know time is tight so I'm quite content thank you convener. Thank you. I'm looking I don't think there are any further questions from the committee this morning so Mr Finno, Mr Evans thank you very much for attending the committee this morning and a closed session of the committee.