Many of you that watch what’s going on in the arts in
Northern Ireland know only too well that times have been tough. Those of you,
artists, staff, volunteers or participants engaged in work for the 105
regularly funded arts organisations in Northern Ireland perhaps understand better the
perilous position that our public finances are in. And any complacency or
indeed security there may have been, has evaporated rather quickly in the wake
of the recent annual funding letters of offer received from the Arts Council of
Northern Ireland.
Staff and directors of various organisations up and down the
country will have received communication from the ACNI stating that instead of
the monies that they had anticipated receiving, they would only be receiving
precisely 50% of those funds. The letters come without any caveat or condition
offered but the reality is that the Arts Council staff are only in a position to
guarantee half the funding at this stage in the hope that things change, and
that an Assembly or an Executive will be in place in the not-too-distant future
to allow a budget to be set for Northern Ireland. Because this is the
crucial issue facing not just the arts community but all communities in
Northern Ireland. We have no budget.
In the interregnum between Assembly Executives, where our
local legislature has not been convened, it seems that the Northern Ireland
Civil Service has no alternative but to insist that the Arts Council offer only a half a year’s budget. The failure to form a new Executive has resulted in this
unprecedented crisis regarding our budgets. Even the raising of monies through our
rates’ bills is now a month late. So in the political vacuum, as the talks at
Stormont Castle ebb and flow, those organisations and services that are
dependent on the public purse find themselves in this parlous position. The
Department of Finance permanent secretary David Sterling, under section 59 of
the Northern Ireland Act 1998, has the power to release cash and resources from
budgets but he can only draw down 75% of Northern Ireland’s bloc grant by the
end of July and 95% by December. How that budget is then distributed amongst
departments is again under the control of the civil servants at present. And
should there not be an agreement to form a new Assembly Executive by this
Friday, ironically Good Friday, then in all likelihood we are set for fresh
elections with perhaps a period of direct rule in between.
So for organisations in the arts what should we do? Do we
plough on optimistically with our strategies and programmes or do we send out
protective notices to staff and participants, informing all that we cannot
guarantee employment or projects beyond September. And what of the 105 plus boards
of trustees of organisations up and down the country… what are they expected to
do? It must be remembered that all publicly-funded arts organisations have
charitable status (some of course will have trading subsidiaries too) and
therefore are dependent on a board of voluntary trustees for their governance
and oversight. It is the personal liability of these individual volunteers that
underpins the charitable status of all arts organisations. It is the
responsibility of these individuals to assess whether an organisation is in
fact a ‘going concern’ because it is negligent and therefore illegal in
company/charity law for trustees to allow organisations to continue to trade if
they do not have adequate funds in place. As its states on the GOV.UK website: If your charity is a company or charitable incorporated
organisation, it could become insolvent and face administration or closure if
it can’t pay its debts. If your charity is an unincorporated association or
trust, you and the other trustees could be liable for its debts.
The website then advises
This means that if
your charity won’t be able to pay its debts, either with its income or with its
assets, you need to act quickly. Take professional advice as early as possible
– this will help you work out what action to take. For example:
- developing alternative sources of funding or launching an emergency appeal
- borrowing money from banks, members or stakeholders
- reducing actual or planned spending
- stopping doing some of your charity’s activities
So trustees, and their staff colleagues, have to make judgement calls and these cannot
necessarily be made in September... they may have to be made a lot sooner than
that. There are many organisations that may have adequate reserves and
therefore can afford to continue to programme and work as normal. However there
will be a great deal more for whom the years of cuts have undermined their
ability to ride out such funding storms. For those organisations there will be
some earnest conversations around board tables. There will be discussions with
auditors, treasurers and chief executives and there will be panicked phone
calls to funders undoubtedly as well.
Having witnessed five years of unprecedented cuts to the arts,
with in-year cuts only two years ago, to now be faced with only a guarantee of
funding until September leaves many organisations teetering on the brink. For
them, their staff, patrons, trustees and indeed stakeholders and beneficiaries,
participants and artists alike, these are very difficult times. For Northern
Ireland, these moments exemplify the difficulty that 19 years after the Good
Friday Agreement we find ourselves in uncertain waters, navigating between governments... up
the creek without a budget. In the recent welter of such recent electioneering promises, no
one said that livelihoods, services and programmes would be placed in such
impossible positions. The promises and ambition offered then was for certainty
and opportunity. For a great many within the voluntary, community and social
enterprise sectors, this uncertainty and insecurity of resources may well push
some beyond the brink. For everyone here, it represents just how precarious all our
public services actually are. And if and when budgetary pressure on the public
purse comes again, will the Arts, the smallest and most vulnerable budget, be hit once again?
Optimistically of course, there is still a conversation and
negotiation taking place at Stormont. Indeed, there still is every chance that
an Assembly can and will be formed and that budgets will therefore be set. Or, failing
this, and via some enabling legislation, the Secretary of State may well take
it upon himself to curtail such budgetary insecurity and in effect set a
budget. But we also know that any of the much-vaunted concessions around
welfare expenditure and the so-called “bedroom-tax”, may not survive, placing
further pressures on budgets and of course, on some of our most vulnerable citizens.
Maybe there will be a snap election called and an Executive
subsequently formed. But we've just been through an election and that hasn't
been the outcome, so perhaps that confidence is misplaced.
In any case, these were already difficult times for the arts
and for those we serve.
The challenges now for all concerned are even greater.
#artsmatterNI
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