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part of the localism agenda mean that the health of the local economy determines to a significant extent the health of local finances. In other words, if councils are not funding growing demand for their statutory services, financial pressures mean that they are incentivised to spend everything else on growing their local economy in order to continue generating revenues into the future. That means libraries come under even greater pressure than they have done to date. Given the strains on national and local finances and the emphasis on spending to increase economic growth, places – and particularly cities – face a conundrum around arts spending. It makes up a significant proportion of local spend: local authorities in England spent £4.1 billion on culture and related services in 2011/12, making up four per cent of the overall spend, while cities spent a slightly higher proportion of their budgets – five per cent, or £2.4 billion – on supporting arts and culture. This higher proportion is likely to be because many rural areas rely heavily on neighbouring cities (and neighbouring city budgets) for access to a wide range of cultural activities, from museums to theatre, opera to exhibitions. Many city reputations are also shaped by the quality or otherwise of their arts and cultural institutions, although the degree to which this impacts upon economic growth remains contested. So the fact that not all cities are responding in the same way to pressures on costs is important. Some cities are putting arts and culture at the heart of their strategies to regenerate the local economy, and linking them to significant numbers of jobs and growth, as well as arguing that it has a further impact on community, social inclusion and local capacity – take the investment in iconic libraries in Manchester and Birmingham. At the same time others are slashing arts budgets and there are parts of the country where people’s involvement in the arts is well below average (as targeted by the Arts Council’s Creative people and places fund). So do city level decisions about arts and culture matter to economic growth? Can investment decisions about arts and culture help to ‘reactivate’ people and places being left behind by global economic change? Can these cities learn lessons from the past decade or more of decisions about city investments in culture? Is one approach better than another? And what do we know about what arts and culture can bring to city economies in the current cold climate?
1. Why do cities matter? The debate about the impact of local arts spending decisions on economic growth and other issues matters because, in a more knowledge intensive world, cities are vital to economic growth and culture. Cities (which we define as ‘real’ economies, or functional economic areas, of a certain size)56 will be key to delivering the economic and jobs growth being sought so desperately by the Treasury because they offer businesses access to customers, skilled workers and ideas. This is leading to certain types of businesses, primarily knowledge intensive57, becoming more – rather than less – geographically concentrated. In England, cities account for 53 per cent of the UK’s businesses, 58 per cent of jobs, 60 per cent of GVA and 75 per cent of the knowledge intensive jobs.
56 The definition of cities used by Centre for Cities is CLG’s Primary Urban Area, devised by Michael Parkinson et al in 2006 for the State of the Cities report. This definition means that there are 64 cities across the UK. More details are available at www.citiesoutlook.org. 57 Overman ref