And because of the small number of large businesses headquartered in Wales, attracting business support is difficult. Nick Capaldi, chief executive of the arts council, explained that business sponsorship is more prevalent in the metropolitan centres and in support of larger, higher profile arts organisations. He added that smaller, community-based organisations in rural areas, for example, are struggling to achieve significant corporate sponsorship.

And raising funding from individuals is also problematic for the arts in Wales. We were told that the comparatively low number of high net worth individuals in Wales makes fundraising from individuals very difficult. Compounding this is the difficulty Chapter Arts Centre noted as the constant challenge of demonstrating the arts as a charitable cause. Arts fundraising consultancy Blue Canary also highlighted this issue. They told us that arts organisations are trailing behind the enterprise and initiative that is being demonstrated in income generation across the wider charitable sector.

The highly competitive market for funding from trusts and foundations was something that was brought to our attention throughout this inquiry. Private foundations in Europe have restricted their grant giving during a prolonged period of low interest rates. When combined with a number of years of public sector cuts, it is easy to understand why this market has become so fiercely competitive, as arts organisations scramble to replace lost public funding. We also heard that trusts and foundations prefer to fund distinct projects rather than replacing lost public sector revenue funding.

That being said, we were also told that, whilst competition for grants is fierce, many of the large London-based trusts still express a desire to invest more in Wales, stating that the number and quality of applications remains low. Those organisations that do succeed tend to be larger, with more capacity to dedicate to funding applications.

In this regard, Chapter Arts Centre stressed the importance of their public funding, explaining that trusts like the reassurance of seeing public support in place. For funders who are not local, this public support is often the first sign that a project has a local need and that it should be funded. I think it’s fair to say that, from the evidence we received, it is clear that as public funding declines, so too does the capacity to seek funding from private sources.

Raising revenue by selling goods and services is obviously another avenue to increase an organisation’s non-public funding. Arts & Business Cymru, who receive public funding to build relationships between arts and business organisations, explained that there has been a sharp increase in the number of companies seeking arts-based training to address staff development needs. Hijinx theatre company are such an organisation that have seized this opportunity. Hijinx now employ their learning-disabled actors to provide training for companies in communicating with vulnerable people. However, there are also companies like Theatr na nÓg, who explained that their remit as a charity is to provide a service that is not of a nature that would ever gain a return on investment by a commercial company.

In the Welsh Government’s culture strategy, 'Light Springs Through the Dark', they have recognised that the arts sector needs to adapt to cope with reduced public funding. The arts council’s resilience programme is one attempt to improve the culture sector’s financial sustainability. However, this programme is only open to the council’s revenue-funded arts organisations. As such, we have recommended that the arts council considers extending this programme to include arts bodies that aren’t already funded by the arts council, and we're pleased that they are taking forward work aimed at addressing this issue.

In our report, we have set out a number of recommendations aimed at addressing the general and, in many cases, very specific difficulties arts organisations in Wales face when attempting to increase their non-public funding. We have called on the Government to continue its financial support for the development of partnerships between businesses and the arts. We have recommended that the Government takes action to raise the profile of the arts as a charitable cause, and to increase awareness of the excellent arts organisations and projects based in Wales.

We’ve included a number of recommendations around the exploitation of international markets. Given the low number of large businesses and high net worth individuals in Wales, it is essential that these markets are recognised and exploited as far as possible. Given the small number and sometimes poor quality of funding applications being submitted, we have also called for the Government to provide a source of expertise to support small arts organisations to improve the number and quality of their applications.

So, in general, we also believe that the Government, as well as the sector, must up its game if it expects arts organisations to prosper with reduced public funding. Simply calling for them to do so is not enough. The call needs to be backed up by an appropriate and sufficient level of tailored and informed support.

In conclusion, although I am pleased to see that the Minister has accepted, at least in principle—and that’s another debate—our 10 recommendations, his response now needs to be accompanied by effective and appropriate action. In many instances, he has said he will be asking officials to work with the arts council to progress work to increase contributions. He’s committed to drawing up an action plan, and for the arts council and Arts & Business Cymru to arrange regional seminars for UK trusts and foundations, and I’m pleased to see these actions. The committee will also be expecting a report on how these efforts have translated into concrete changes for the better.

The committee will be returning to this topic next, and we ask that the Minister prepares an evaluation of the actions he has agreed to undertake in response to each of our recommendations by the spring. The Minister told us that the way the Welsh Government promotes partnership working between arts and business will be reviewed. He told us that he will be stressing to the arts council the need for it to continue to resource this activity, given that pressures on public funding are likely to continue for the foreseeable future. I would like to know what plans are in place to replace this work from April 2019 onwards if the arts council decides that Arts & Business Cymru is not providing value for money. Should their work not continue after April, what exit strategy will be in place? And is there a risk that we will lose vital learning?

Something that was made very clear to us during this inquiry is that Wales’s arts sector has an abundance of talented and passionate individuals. They deserve the support necessary to prosper, and to allow all of us to benefit from their gifts. Thank you.