The Impact of the 1980s UK Recession on Arts Council Funding - Assignment Example

 The Impact of the 1980's UK recession on Arts Council Funding, exploring its affects on theatre with reflection on the current recession in Britain This assignment aims at highlighting how recession impacts arts, and particularly theatres within the UK. For this purpose, a case of the recession of the 80s in the UK has been used, comparing its aftermaths with the present scenario developed due to the current recession in the UK. Sequentially, this assignment starts from the analyses of the recession that hit the UK in 80s, and then discusses the impact it created on Arts Council Funding, studying particularly the impact towards theatres. After that, it takes into account the current UK recession, and studies its current and possible influences on Arts Council and theatres. Introduction According to Ginsburgh (2006), boom and recession are mandatory constituents of a progressing economy in today’s world, each following the other in the form of a cycle. On a general note, economists and strategy planners try to their level best to avoid recession or to at least delay it s much as they can but a natural cycle is difficult to overrule. The major issues associated with recession are not the rising level of inflations but actually, it is the level of unemployment and lack of growth, which makes it difficult for an average family to meet ends, because otherwise, the increasing levels of general prices, inflation, is there in times of boom as well. A natural and predictable step taken by a government to combat recession is tightening the screws of the monetary and fiscal policy i.e. increasing taxes (to earn revenues and to avoid excessive spending) as well as reduction in government spending projects. Reduced government spending saves money but at the same time, it impacts the life of a common man. The following section discusses the same with reference to the recession of the UK that took place in the 80s. 80s Recession in the UK In accordance with Towse (2003), the time of 1980s was a recessionary period for the globe, and UK was the first to enter into this recession. The government, as a result, deployed a tight fiscal and monetary policy, as the figures of inflation raised to approximately 20%, and unemployment was spreading up fast. Taxes were increased and government spending was reduced to a greater affect. During the same recessionary period, the GBP hit its all time low of 1.05 against USD. It was a depressive scenario for the UK masses on a general note, where individuals followed the same strategy as utilized by the government i.e. of developing saving habit, implying avoidance of extra taxes and reduced expenditure. One of the industries that suffered the most was the arts council side, since it was assumed that the Art Council is one of the added expenditure that can be suppressed for the time being and be compensated at a later stage, and the then funding would be used for enhancing job opportunities or provide funding to the unemployed. Role of Arts Council in a region According to Frey (2003), art council is a depiction of the society in itself; it involves illustration of the cultural heritage in the social networks of the society. It not just provides relief to the viewers but also develops an aspiration amongst the masses about the current proceedings in the society; theatres are a prime example of the same. Theatre programs provide an in-sight on what is happening or the occurrences of the routine activities in our society by means of sarcastic comments or otherwise; theatres also provide an in-sight on how a common man sees proceedings in the country or the respective region. Some positive critiques of theatres like Throsby (2001) and Peacock (1994) suggest that the skits and plays in theatre tend to provide solutions to on-going problems in an innocent manner, and also suggest that these, in a very light tone, convey the ongoing issues to the masses, in a manner that the audience gets entertained and also get a ‘message’ about the current affairs. This is of prime utility when it comes to recessionary periods or in the times of depression in an economy. Recessionary Impact on Art Council Funding and Theatres – the 80s scenario The recession of the 80s brought about significant revolution in how money was spent by the government over the art council i.e. it’s funding. Generally, such activities are very much financed by the government itself and if not wholly, then the rates are at least subsidized to an extent that they are in reach for the masses, as stated by Marrelli (2001). Additionally, when aided by the government, these arts and theatre groups tend to present a picture about how government is facing issues from all ends and how well it is trying to resolve the same, thus, conveying the message that any inconvenience caused should be politely ignored by the public, and in fact they should play a supportive role for the government on the whole. The more subsidized this program is, the easier it becomes for the government to gain support from the general public i.e. the masses. However, the presence of a Conservative government, later pronounced as the arts-funding cutters took an action which was quite the other way. The government reduced its spending towards the art council as well as the theatre, which did not give a very good signal to the masses critically considering the fact that due to high levels of inflation and unemployment, depression was taking toll and entertainment was lacking. Surprisingly, analysts define this as a not-so-good-move by the government i.e. reducing spending towards the art works. This was the time when commercialism and the concept of corporate social responsibility began to rise. Despite organizations cutting on their budgets to the maximum for reducing costs, since their cost of production was rising due to inflation, they entered into the deal of sponsorships with major and mega events of the arts industry and theatres. This leads to a three-fold advantage in accordance with Heilbrun (2001); firstly sponsorship turned out to be a cheaper medium of advertising, especially when it came to theatres, secondly the company gained good will in the eyes of the theatre groups as well as the audience, and finally, despite spending less on advertising, the advertising itself increased and so did the selling of the products being advertised. This was the era when commercialism entered in to the theatre industry, and reached its boom to an extent that today, any form of art is incomplete without advertisement and sponsorships, as sponsorship has literally become the driving force, leaving behind the government funding for this industry. The Current UK Recession In accordance with Read (2009), the recent global financial and economic crisis has pushed the global economy in a deep recession, whereby, there are reduced indications of an early revival. This recession and its consequences, mainly inflation and unemployment, leading to massive depression, and has also been compared to the great depression in the first half of the 19th century. Consequently, there has been tremendous cut in the government expenditure, rise in taxes, increased claim on the unemployment insurance offered by various countries and regions, and so on. Relating the topic of discussion i.e. the funding of art and theatre during recession, it has been observed that today in UK, in accordance with the World Bank Reports (2009), there are hardly any art or theatre groups that are funded by the government; therefore, a cut from the government spending is unlikely to influence this circumstance. However, where funding has been provided, such as the government owned theatre groups, and art councils, their working has been hampered by the disconnection of widely flowing funds from the government treasury. According to Nahshon (2009), amongst the self or sponsorship financed art and theatre groups, there were chain of reactions; firstly, the self financed groups reduced their expenditures thereby compromising on the quality of production and auditoriums being hired for these plays. Secondly, the sponsorship based groups suffered loss of sponsors since the organizations funding them wanted to cut down their costs particularly when it came to the advertising costs. Subsequently, their influx of funds was reduced, thereby, they increased the prices of the tickets and the contract prices of cafeterias surrounding the performance arena. As a chain reaction, the cafeterias were bound to increase the price of their products. This all entailed to the audience suffering as they received tickets at higher prices and the snacks available were also on the expensive side. As a result, the audience lost interest in art and theatre. Though this was a prime demand scenario for the audiences as stated by Maanen (2009), whereby, the economic situation had developed tension and depression in their lives, and they would definitely want to relief that tension by having outdoor activities and what would be a better opportunity than hanging out at such places. Unfortunately, the art and theatre lost the market that was knocking at their doors as people were on the outlook for entertainment that can make them feel better and bring about laughter on their faces – even if for a short span of time. This was a prime demand opportunity lost within itself for which the art and theatre group need to be held responsible alongside the concerned government authorities. At such a time when the government is looking forward for the revival of the economy, though tightening the monetary and fiscal policy is considered the optimal solution but beyond numbers, government also needs to feel that there is a common man in the region, whose care is the ultimate responsibility of the government; therefore, even if the government does not move on with development of flyovers, under-passes, bridges, etc., it should not halt the progress towards the recreational activities for the masses, because such a step would lead to greater depression amongst the masses, increased tension and would ultimately lead to either increased crime rate in terms of theft, loot, and stealing, or might even lead to suicide rate tolling up. Subsequently, one saving by the government in the wrong direction can have severe consequences. Following section compares how the strategies adopted by two theatre houses having their own groups performing to combat the cut of funds from the government organization and from commercial aspect as in the present scenario faced in the UK. Case Study for Strategies For comparison, two local theatres have been chosen; one is the Community Theatre Hall and Services while the other one is the Royal Theatre Hall & Services, hereon referred to as CT and RT respectively. CT is a county funded theatre with their own group performing various theatre acts in the same. The current recession has led to reduced government spending towards this theatre services, but its employees need to have their funding appropriately managed. Therefore, they are still performing the acts, but they have raised the pricing of the theatre tickets to a higher level. This has led to reduced audiences, and the crowd has scattered leading to losses to the theatre services. Sooner than not, the services is planning to close the work for a while till the concerned authorities start contributing in monetary terms with appropriate level of funding. Due to the restrictions laid by the county regulations towards the services management, there are restrictions on advertising, limited by the number of participants for advertising in the show and also various other restrains on the acts and the topics to be covered in the same. Such restrictions in essence spoil the fun of theatre as they are not given the free hand to do their own work. RT, on the contrary, is a business model based theatre service that is more money oriented rather than intending to service specific purposes. Most of its funding is based through the sponsorship advertising. Since it is owned by a businessman, the recessionary circumstances led towards devising strategies that would make it easier for the business to prosper even in such circumstances. RT did not increase the price of the tickets; rather it reduced the ticket prices, showing the masses the care it has for reducing the burden on their pocket and expenditure, yet providing them the theatre entertainment. At the same time, the business worked towards (a) increasing the capacity of their crowds (b) increasing the number of shows (c) enhancing the quality of the shows. This was based on the principle that the care is actually illustrated by being caring when it’s needed i.e. in recessionary circumstances, individuals need cheaper entertainment, and if RT can provide the same, it can make space for its shows. Both the firms used the fundamentals of economics to solve the problems on their behalf; CT increased the prices in anticipation that if demand remains constant, they would definitely make more money, but RT realized that it was time to reduce pricing, and increase the frequency, and the idea actually worked. The most recent sales and crowd volumes of CT vs. RT is an evidence within themselves of how the sales has progressed. Conclusion Conclusively, it can be stated that recession is a critical time for the economic think tank to adopt and implement the right set of policies – within the same, it is very critical to have the right mix deployed and even the smallest of variables should be critically analyzed as a slight bit of mistake can have serious consequences as discussed in the previous sections of this report. Works Cited Alan T. Peacock, Ilde Rizzo, Giorgio Brosio, Cultural economics and cultural policies, Springer, 1994 Bruno S. Frey, Arts & economics: analysis & cultural policy, Springer, 2003 C. D. Throsby, Economics and culture, Cambridge University Press, 2001 Colin Read, Global financial meltdown: how we can avoid the next economic crisis, Palgrave Macmillan, 2009 Edna Nahshon, Jewish Theatre: A Global View, BRILL, 2009 Hans Van Maanen, Andreas Kotte, Anneli Saro, Global Changes---Local Stages: How Theatre Functions in Smaller European, Rodopi, 2009 James Heilbrun, Charles M. Gray, The economics of art and culture, Cambridge University Press, 2001 M. Marrelli, Giacomo Pignataro, Public decision-making processes and asymmetry of information, Springer, 2001 Ruth Towse, A handbook of cultural economics, Edward Elgar Publishing, 2003 Victor Ginsburgh, C. D. Throsby, Handbook of the economics of art and culture, Elsevier, 2006 World Bank, Global Economic Prospects 2009: Commodities at the Crossroads, World Bank Publications, 2008 Read More