REVIEW OF LOTTERY SCHEMES

THE ARTS COUNCIL OF NORTHERN IRELAND REVIEW OF LOTTERY SCHEMES Summary Report 31 March 2003 Deloitte & Touche 19 Bedford Street Belfast BT2 7EJ Northern Ireland CONTENTS 1. 1.1 1.2 Page 1 1 1 INTRODUCTION Aim Structure of this Report 2. 2.1 2.2 2.3 2.4 2.5 CONTEXT Background Context Task Brief Key Research Questions Assumptions 2 2 2 3 3 3 3. 3.1 3.2 3.3 3.4 3.5 METHODOLOGY Introduction Development of a Sampling Frame Summary of Activity Format of Meetings Participation Levels 4 4 4 4 4 5 4. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 SUMMARY OF CONSULTATION FINDINGS Overview General Issues Criteria Guidelines Sums available Eligible and Ineligible Costs One Live Application Rolling Programmes or Deadlines 6 6 6 6 7 7 7 7 8 The Arts Council of Northern Ireland - Summary Report CONTENTS 4.9 4.10 Premium Payment Eligibility Criteria Page 8 9 5. 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 RECOMMENDATIONS General Criteria Guidelines Sums Available Eligible and Ineligible Costs One Live Application Rolling Programmes or Deadlines Premium Payments 10 10 10 10 11 12 12 12 13 The Arts Council of Northern Ireland - Summary Report 1. 1.1 INTRODUCTION Aim The purpose of this report is to present a summary of the Deloitte & Touche review the Arts Council of Northern Ireland‟s (the Council) Access to the Arts, Audience Development and New Work. 1.2 Structure of this Report This summary report is structured as follows: Section 2 – sets the context for the review; Section 3 – outlines our methodology and the response rates to the consultation; Section 4 – presents a synopsis of the views expressed in the consultation; and Section 5 – contains recommendations for consideration by the Council. A list of organisations that contributed to the consultation process is included as Appendix 1. The Arts Council of Northern Ireland - Summary Report 1 2. 2.1 CONTEXT Background In May 1999, following regional public consultation, the Council launched a “Strategy for the Distribution of National Lottery Arts Funding 1999 – 2002”. This strategy saw a shift in emphasis from capital developments to project based grants aimed at benefiting people from all sections of society. It was reviewed in 2002 in advance of the launch of the 2002 – 2006 Lottery Distribution Strategy, which was also subject to public consultation. Three of the schemes within these strategies are the subject of the current review. 2.1.1 Access to the Arts During the period 1999 – 2002 the Council dedicated this programme to providing new opportunities and promoting access to the arts through a wide range of community arts development programmes. During this period, 68 grants were awarded totalling £2,750,161. The scheme was revised and re-issued on 1 April 2001 and a major change was an increase in the maximum grant from £25,000 to £40,000. 2.1.2 New Work This scheme was transferred from „pilot‟ status and established as a mainstream lottery scheme on 1 April 2001. It is designed to take new work from any art form to people throughout Northern Ireland. Priority is accorded to innovative original work by Northern Irish artists. The original requirement to create a capital asset as a result of funding was dropped at this stage and the relaunched scheme required grant recipients to encourage education and / or community access programmes in each new work commission. 28 awards were made in 2001/2002 totalling £814,162. 2.1.3 Audience Development The current Audience Development programme was introduced in April 2001. This programme offered grants of up to £100,000 per year for three years to help organisations identify and develop their audiences. The three main elements of the programme provide funding for touring, education/outreach and marketing. 12 awards were made in 2001 / 2002 totalling £1,761,409. 2.2 Context Three months into the 2002/03 financial year it became clear that the demand against available budgets for these particular schemes was significant and that under the rolling programme system, the schemes were likely to be heavily oversubscribed. As a result, the Council took the decision to impose a deadline of 31 July 2002 for Access, Audience Development and New Work applications. This left no resources in the programme for the rest of that financial year. It was agreed by the Council that these schemes would be reviewed as a matter of urgency during the closure period. - Summary Report The Arts Council of Northern Ireland 2 2.3 Task Brief The purpose of this engagement is to review the Council‟s Access, Audience Development and New Work Schemes and to make recommendations for consideration by the Council. The Council intends to re-launch the revised schemes in April 2003 with grant aid available as early as possible in the new financial year. 2.4 Key Research Questions The consultation was designed to ascertain the following – through Arts Council and arts sector consultation:  does the sector agree that a premium payment for projects working with special needs groups and disability and ethnic groups should be introduced, following the recent impact assessment and in the light of diminishing resources?; do the criteria for each scheme present clear and understandable guidance for potential applicants?; do current guidelines and sums available under each scheme meet the perceived needs of potential applicants?; do current eligible and ineligible costs seem rational, or is there a need to introduce other costs elements within the parameters of the financial directives?; and do rolling programmes or deadlines for each scheme present a preferred option for applicants?     2.5 Assumptions The following assumptions have been agreed with the Council and underpin the recommendations arising from this consultation exercise:  any recommended action must be consistent with Government Policy and Financial Directions for the distribution of National Lottery Funds; changes at programme level are unlikely to precede the outcome of the DCMS Review of Lottery Funding. Any changes which emerge as a result of this consultation will be within schemes and will relate directly to the issues highlighted in the terms of reference; recommendations should be made in the context of likely available funds for the schemes in question. The projected budget for 2002/2006 has been used in this context; proposals should also be consistent with the Council‟s strategic and corporate plans and with the 2003-2006 Strategic Plan; and administrative issues are beyond the specific brief of this consultation. Points raised will be reflected back to the Council, but recommendations will not address administrative difficulties directly.     The Arts Council of Northern Ireland - Summary Report 3 3. 3.1 METHODOLOGY Introduction This section outlines our approach to this consultancy assignment and reports on response rates and the activity of the project team. The two key target groups for this consultation were Council Members and Staff and the Northern Ireland Arts Sector. 3.2 Development of a Sampling Frame Given the size of the arts sector in Northern Ireland and the level of interest in the three schemes under consideration, it was necessary to develop a sampling frame in order to identify potential participants for this consultation exercise. The Council provided a list of all applicants to these schemes since 1999 to the project team. We then prepared an invitation list for the consultation based on a sample from the database. In an effort to select a varied and representative sample, we identified the following variables and ensured that relevant groups were included in the selection:  status of application (whether groups were successful or unsuccessful in securing funding); the range of artforms; geography – urban / rural; relevant Section 75 categories; and level of Grant.     3.3 Summary of Activity After deduplication and cleansing of the sample, a total of 186 applicant organisations were invited to participate in the consultation exercise. In addition, 22 umbrella organisations were invited to send a representative to consultation meetings. A total of 20 consultation sessions were held in Belfast, Derry and Fermanagh. 11 arts development officers met with the project team and a subgroup of the Lottery Committee also attended a discussion session. A meeting was held with officials from the Department of Culture, Arts and Leisure and the Arts Managers Group of the Forum for Local Government in the Arts was also briefed about the consultation. A number of clarification meetings were also held with the Council. 3.4 Format of Meetings Organisations were invited to send a representative to a pre-scheduled meeting to discuss the three lottery schemes in question. The options of rescheduling or submitting comments in writing / via e-mail were also given. Advance notice was given of the kinds of issues that would be raised. Copies of the correspondence and of an aide memoir that was used in the group discussions are attached as Appendices 3 and 4 respectively. The Arts Council of Northern Ireland - Summary Report 4 3.5 Participation Levels A total of 60 organisations participated in the consultation exercise. This represents a 29 per cent response rate. The majority of those groups attended one of the consultation meetings. Nine groups submitted written comments and four were interviewed by phone by a member of the project team. A supplementary letter was sent to those who did not attend their scheduled session to remind them that they were welcome to attend another session if they wished and to highlight the alternative media for contributing to the debate. A list of those who attended is attached as Appendix 1. The Arts Council of Northern Ireland - Summary Report 5 4. 4.1 SUMMARY OF CONSULTATION FINDINGS Overview The purpose of this section is to provide an overview of the views and issues raised during the consultation meetings. It is important to note that many consultees wanted to use the opportunity of this review to highlight a number of wider issues relating to the lottery strategy and the administration of lottery funds. The focus of this review is on a series of operational issues around three specific lottery schemes and our recommendations will relate specifically to those issues. It is important, however, that the other issues raised are recorded and for that reason, a „general issues‟ category has been included in this section of the report. 4.2 General Issues Despite a certain level of scepticism regarding the timing and potential outcomes of the consultation process, those who participated gave a frank assessment of the schemes under review. General perceptions of the Council were mixed and applicants‟ experiences of the Lottery were varied. The application process was generally considered to be arduous and the moratorium in 2002/2003 clearly damaged the sector‟s confidence in the Council‟s planning and management systems. There was recognition that there had been some positive developments in relation to the refinement of the application and project management processes for Lottery funded projects, but the procedures were still considered to be overly bureaucratic and inefficient. A majority of consultees called for more transparency within the grant-making process and it was felt that more feedback to unsuccessful applicants and more contact between arts development officers and applicant (and subsequently grant-aided) groups, would help in this regard. Wider issues of the future of Lottery funding, the relationship of Lottery and Treasury funding for the arts, additionality and sustainability were also raised. 4.3 Criteria Many of those consulted indicated that they had no difficulties with the selection criteria for awards. In principle, the criteria made sense to applicants and „seemed fair‟. They were perceived to be consistent with the policy directives and with new targeting social need and equality priorities. Questions arose in relation to how those criteria are applied to the decision making process however and there was significantly less clarity and satisfaction at that level. Many applicants considered the different „layers‟ of criteria problematic, particularly because the interrelationship between the overarching lottery criteria and the programme specific ones was not considered clear. Some consultees wanted more information on the weighting process and the relative importance accorded to different priorities. There was a sense from a number of people that contributed to the debate that decisions were not actually based on the criteria. Discussion around the decision making process led a number of consultees to raise the issue of how quality of the artistic content of applications is assessed. The debate about whether these schemes are about quality art-led activities with a community outreach component or whether they are about introducing the arts as a The Arts Council of Northern Ireland - Summary Report 6 medium for community development, was an animated one which highlighted some quite polarised views. Some consultees felt the criteria were „stacked against‟ new organisations who needed an opportunity to develop a track record and demonstrate the quality of their work. Finally, a major issue that emerged was confusion between the remit and objectives of the Access and Audience Development schemes and the outreach component of New Work. 4.4 Guidelines The majority of those consulted indicated that they had found the written guidance reasonably clear. Perceived difficulties arose when they sought clarification on the written guidance from arts development officers and there was a sense that the advice given to groups by the Council was inconsistent. On this basis, some groups called for more detail to be added to the written guidance. A number of areas of confusion in relation to the guidelines were identified in the course of the consultation and these have been highlighted to the Council. 4.5 Sums available There were few strong views on levels of grant available. Most were accepting of the current levels, given the constrained resource environment. Some expressed the view that the £50k cap for single pieces of work under New Works was too low. Others felt the £40k limit on Access was also too low. The cap of £20k on administrative salary costs and 10 per cent on overheads within Access was also considered to be too low – particularly for umbrella organisations and for organisations working with groups with special needs. In relation to the adequacy of the amount of money available for the schemes, a number of groups highlighted the need to protect money for „art‟. It was claimed that it was easier to find funding for outreach activity than for core arts projects in their own right. They highlighted that the Council was the primary (and for some the only) source of funding for the arts and that other resources were available to promote social inclusion and community development activity. Others highlighted that these schemes are specifically about access and outreach work and they challenged those who felt that the focus should be exclusively on the artistic component of the project. 4.6 Eligible and Ineligible Costs There was general support for the current parameters on cost although a certain element of confusion existed in relation to equipment costs. The majority of grantees were unaware that funding was available for equipment hire and that there was a degree of flexibility generally on equipment rules. It was argued that the guidelines needed to be amended and that the Council should explicitly state what equipment costs were permissible. 4.7 One Live Application There was much confusion over the detail of this principle. While the sector understood the need to ensure appropriate monitoring of projects and recognised that The Arts Council of Northern Ireland - Summary Report 7 there was a need to „spread‟ funds around, this restriction presented significant problems for some groups. This was particularly the case for groups where the grant was supporting wages. The time period between final sign off of the original project and approval of the new one meant that there were „gaps‟ in programming and some organisations could not retain their workers over this period. This lack of continuity was considered to be a waste of investment already made by the Lottery. The „one live application‟ rule was generally regarded as a major constraint and there was little recognition of the process currently in place whereby applications are progressed to the point of approval while other activity is ongoing. Some found it difficult to understand why it was acceptable to submit multi-project applications, but not to submit more than one application within a particular time period. Concerns were expressed about the implications of the one live application rule for organisations in receipt of a grant who wish to submit an application for a distinct piece of work with a consortium. 4.8 Rolling Programmes or Deadlines This is an area where there was no clear consensus of opinion. There was general recognition that there is no easy solution to the management of these funds which have finite resources and are the subject of high demand. There was acknowledgement of the logistical difficulties of managing funds across the full financial year within a rolling system – particularly in respect of large applications. While the balance of opinion probably tipped in favour of maintaining a rolling programme, the vast majority of consultees indicated that they could work within either system if it was operated efficiently and measures were taken to ensure that funds were available throughout the financial year as appropriate within the designated system. If deadlines are introduced, the key concern for consultees was to ensure that there are an adequate number of „entry points‟ each year. 4.9 Premium Payment Discussions within focus groups tended to centre on two key issues arising from the idea of a premium payment. The first issue related to the principle of applying a premium payment to under-represented groups and the second issue focused on the practical outworking of the premium payment idea. In relation to the principle, a range of opinions emerged. For the majority of groups, the principle of engaging under-represented groups was accepted and it was also acknowledged that engaging certain groups had cost implications. The difficulties of focusing on selected Section 75 groups and not others were raised and some felt that even Section 75 did not cover all socially excluded groups e.g. access to the arts is an issue for those living in rural communities. At the other end of the spectrum, it was argued the premium payment idea was unnecessary and would result in the further development of a „tick box‟ culture. There was no consensus on this issue but many acknowledged the administrative difficulties of setting up a separate „pot‟ of funding. It was also noted that any additional costs could be included or taken account of through raising the cap on administration expenses for some groups from 10 per cent. Alternatively they could be considered separately from overhead costs in the application. The Arts Council of Northern Ireland - Summary Report 8 4.10 Eligibility Criteria There was some debate about the eligibility criteria for the schemes. Some consultees felt that District Councils should be added to the list of ineligible applicants. A minority of participants also suggested that individual artists should not be excluded from applying to these schemes. The vast majority felt that for reasons of financial management and given the requirement to showcase work under the schemes, the exclusion of self-commissioning costs was entirely appropriate and that it was not unreasonable to expect artists to work with constituted organisations in relation to lottery funded activity. In addition, the existence of the Support for Individual Artists Programme was highlighted. The Arts Council of Northern Ireland - Summary Report 9 5. 5.1 RECOMMENDATIONS General It is important to highlight that forward planning for these schemes must operate on two levels at this stage i.e. transitional and long term planning. There is a need to plan for a high volume of applications on reopening of these schemes as a result of pent up demand. These „transitional arrangements‟ may need to be different from (although consistent with) longer term planning for the future operation of the schemes. The sections that follow set out our recommendations in relation to the main terms of reference. It is important to note that some of the recommendations have resource consequences. In relation to the general issues raised in this report (i.e. those issues not directly within the terms of reference of the project team), we recommend that the Council give due consideration to the views expressed by the sector in future review/planning exercises. Specifically, however, we would suggest the following:  the Council should continue to work towards ensuring that its processes and decisions are communicated to the arts sector in a way that is considered to be „transparent‟ and that clarifies the basis for the various policies, procedures and decisions relating to the distribution of lottery funds; the Council should seek to improve mechanisms for feeding back to unsuccessful applicants. This should include an explanation of how the project failed to meet the criteria or why it could not be funded; the Council should undertake an exercise to benchmark the administrative processes that apply to these schemes against the processes of other distributors and other funding bodies, both locally and in other regions; and the Council should strengthen the „development role‟ within the arts development officers post in recognition of the importance of development of relationships with client groups.    5.2 Criteria  efforts should be made to clarify the remit, objectives and anticipated outcomes of the different schemes; the Council should develop a communication plan for these schemes and actively seek opportunities to explain, clarify and disseminate its policies, practices and decisions; and the Council should review the operation of its standardised assessment framework to ensure consistency of approach. Where there is a training implication, this should be actioned.   5.3 Guidelines  we recommend that further detail should be included in the written guidance on the following: - Summary Report 10 The Arts Council of Northern Ireland  the calculation of benefits in kind in establishing partnership funding (particularly in relation to the costing of volunteer time and the question of whether management Committee members time is allowable);  the status of the „one live application‟ rule;  how to define the „start‟ of a project, given the requirement that a project should not have started at the time of application;  the need to submit CVs with applications;  the need to build in evaluation costs into the project budget;  the exclusion of equipment purchase; and  the meaning of “fees for existing courses” under ineligible costs.  the rules which apply to applications from organisations operating within a consortium and which have already applied on behalf of their own organisation, should be clarified; the Council should consider running a series of seminars throughout the year to clarify the application process, programme criteria, approval mechanisms, project management requirements and monitoring arrangements. These will serve to add to efforts to maximise transparency, allow officers to engage directly with groups in a time-efficient way and address the allegations of inconsistent advice giving. There will be immediate resource implications for staff in terms of time commitment in the design and delivery of these schemes but the potential benefits are significant and it could result in a more effective use of time in the longer term i.e. a reduction in high levels of ad hoc queries. Seminars could also be used to encourage „joined-up‟ applications across schemes; training for staff should be organised upon relaunch of the schemes to ensure that all Council staff (and arts development officers in particular), are aware of revisions to the guidance and to ensure consistency in the advice they give to potential applicants; we recommend that the presentation of the written guidance should be reviewed; a review the lists of supplementary questions that are issued to applicant organisations should be undertaken; and consideration should be given to establishing a „best practice‟ website.      5.4 Sums Available  we recommend that the Council should review the 2003 / 2006 projected budgets and assess the potential for „pulling forward‟ some funds into the 2003 / 2004 financial year in order to assist with the management of the anticipated high demand upon reopening of the schemes; The Arts Council of Northern Ireland - Summary Report 11  the 10 per cent cap on overheads and £20k limit on administrators‟ salaries in the Access Programme should be reviewed; consideration should be given to raising the £40k limit for Access grants. This will be particularly necessary if a decision is taken to raise the current limit on overheads within this scheme; and the costs of meeting the special needs of defined socially excluded groups (see 4.8) should be considered separately from standard overhead costs.   5.5 Eligible and Ineligible Costs  the current rules regarding eligibility do not need to be changed. It is also our view that there is no need to change guidelines on exclusions to funding; the Council should, however, clarify the position in relation to eligible equipment costs and guidance should be amended accordingly.  5.6 One Live Application  the Council should consider processing applications giving approval in principle (if appropriate), subject to the satisfactory completion of the first application. This would result in a maximum of two applications per programme per applicant at any one point in time; and the Council should review its policy on supporting „pilot‟ years for projects.  5.7 Rolling Programmes or Deadlines In assessing transitional arrangements, we have identified a series of options for mechanisms for accepting applications that could be employed by the Council including:        the immediate implementation of a rolling programme system; the immediate implementation of a deadline driven system; an expression of interest process; the opening of schemes on a staggered basis; a call for applications based on project implementation timescales; separation of processing systems depending on the level of grant; and run one competition only for 2003/04. We suggest that it would be extremely difficult to open all schemes and start accepting applications on 1 April 2003. We propose that guidance and information on all three schemes should be published at that stage but that a phased approach to opening schemes and awarding grants is necessary to ensure that the anticipated high demand is managed effectively. While the recommendations below suggest a way forward, the practicalities of how the management of these schemes will fit with other Treasury and Lottery fund grant The Arts Council of Northern Ireland - Summary Report 12 rounds needs to be considered internally within the Council. Equally, these suggestions are not based on any detailed assessment of activity cycles and trends relating to demand. Any decision should be made in the context of full consideration of all these variables. 5.7.1 Access Programme Given the nature of demand for the Access Programme, we would recommend that this programme is opened for applications in April 2003 with the first decision being taken at the earliest possible opportunity i.e. June 2003. The Council should introduce a number of deadlines for applicants to the Access programme throughout the year, with a minimum of three deadlines in total. New Work Programme The application process for the New Work Programme should move from a rolling programme to a deadline driven bidding process. We would recommend two entry points within the current financial year and decisions should be made in two „blocks‟. The deadlines should be driven by the planned production period for the piece of New Work in question i.e. the first deadline should be for work that will be completed between September and December 2003. The second round would assess work planned for the period between January to March 2004. The amount of funding for New Works for each time period should be clearly specified. Audience Development In relation to Audience Development, we would recommend that the Council issues information on 1 April requesting submissions (i.e. high levels statements of intended activity) from organisations and groups on concepts and ideas that they are currently developing. This process will enable the Council to engage with these organisations in developing proposals for submission to the Council in September 2003. In addition:  on reopening of the schemes, applicants should only submit one application per scheme per organisation; these arrangements should be kept under review and the outcome of that review process should inform planning for the 2004/2005 financial year; and the transitional arrangements and the rationale behind them, should be clearly communicated to potential applicants via grants officers, the Council website and in writing in application packs.   5.8 Premium Payments  the Council should explicitly state what constitutes „special needs‟ in respect of Lottery funding and applicants should be encouraged to consider how they might target underrepresented and socially excluded groups within their projects; and we consider that there is no need to introduce a separate pot of funding to meet the costs of groups with special needs but consideration needs to be - Summary Report 13  The Arts Council of Northern Ireland given to the implications for budget thresholds. We believe that the principle of assisting underrepresented groups to participate and access the arts is best dealt with through the main application process. Groups should be asked to identify and cost how their projects assist groups with particular needs. The Arts Council of Northern Ireland - Summary Report 14