Thank you very much, Dirprwy Llywydd, and I’m very pleased to open this debate on the Culture, Welsh Language and Communications Committee’s report, ‘Building Resilience’, which discusses non-public funding of the arts.

The arts are an indispensable part of Welsh life. As a nation, we rightly celebrate an enduring and rich history of artistic endeavour and output. We've long had a wealth of talented and passionate individuals who have helped to create a sector that brings wide-ranging benefits to us all. From their economic and practical benefits, to their use in addressing public policy matters, whether that be within the education system or addressing health issues, the arts are an invaluable part of any healthy and prosperous society. And there is wide recognition that participation in the arts promotes community cohesion and reduces social isolation and exclusion.

Despite this, real-terms public funding of the arts has declined substantially in Wales over the past five years. The vast majority of the Welsh Government’s budget allocations for the arts are for the Arts Council of Wales. In the 2017-18 budget, out of the £31.7 million allocated in this area, £31.2 million was allocated to the arts council. However, between 2011-12 and 2017-18, Welsh Government funding of the arts council has declined by 18 per cent in real terms. The arts council’s share of lottery proceeds has also decreased during this period. Additionally, as local authority budgets have tightened in recent years, the funding the arts sector receives from this area has also decreased. To illustrate this, local authority funding of the Arts Portfolio Wales, which comprises the arts organisations receiving annual funding from the arts council, has reduced from £11 million in 2011-12 to £5.1 million in 2016-17.

Given the wide recognition of its benefits, this level of cut is clearly concerning. To mitigate this decrease, the Welsh Government has called on the arts council to reduce the sector’s dependence on public subsidy and for the sector itself to up its game on fundraising.

So, for this inquiry, rather than simply look into the impact of this decline in funding and to call for it to be increased, we decided to look specifically at the Government’s approach, to assess how feasible it is, and to ask whether there are any additional practical steps the sector could take to diversify and increase the funding it receives from non-public sources.

To frame the inquiry, the committee agreed to investigate, first of all, how successful the arts sector in Wales has been in increasing non-public funding; also, how non-public arts funding is shared out across Wales; and whether there are international models of best practice that Wales could emulate.

During our inquiry, it quickly became evident that Wales’s arts sector faces varied and very difficult challenges when it comes to raising funds. Arts organisations in Wales face specific challenges to increasing their incomes, based primarily on their scale and location. In order for Wales’s arts organisations to be successful at reducing their reliance on public funding, the Welsh Government needs to ensure that they are equipped to do so. Arts companies based in Wales face many difficulties that aren’t as prevalent in other areas.

As a result, there are a number of actions we believe the Government needs to take before it can realistically expect the sector to respond effectively to its request for reduced dependence on public subsidy. Without this action, it is difficult to imagine the sector’s output and diversity not being reduced, in line with the reduction of public subsidy.