The Cultural Investment Participation Scheme

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Sam Mendes’ brilliant and timely FT article this week called for a rescue package for British theatre during the coronavirus crisis, warning that if the performing arts are not protected, ‘an ecosystem this intricate and evolved cannot be rebuilt from scratch’. We concur. There are many complex and important injustices resulting from this crisis and more broadly in the world today that must be tackled. Yet, through the predicted closure of 70% of all theatres in the UK by the end of the year if the government does not intervene, losing all that theatre has to offer towards the rebuild of our society feels like an unnecessary and significant additional casualty.

Sam Mendes’ article sets out the sector’s position on a range of valuable rescue measures for the sector. At The Old Vic, we have been working with others to drive forward the Cultural Investment Participation Scheme (CIPS) as a viable solution for government. Through CIPS, the government would be taking what is in effect an equity stake in the arts sector through investment paid back in cash + in kind over time. It would be manifestly preferable to handing out huge loans which will encumber organisations long term, stultify growth, and potentially spell the end to a good deal of the social mission element that have historically and will in the future be vital to underpin social and economic recovery due to lack of resource. 

The news over the past week Project Birch has given us renewed impetus to push the scheme forward; a hopeful indication of the Chancellor’s willingness to engage in innovative ways of supporting recovery rather than rely on debt-based options. CIPS feels effectively like a Project Birch for the cultural sector, offering a ‘last resort’ support package. A difference perhaps is that it’s open to the whole sector (NFP and commercial), recognising that the failure of the sector of a whole would have the qualifying characteristic: their failure would be ‘disproportionately harmful for the economy’. 

How would the scheme work? CIPS is an investment scheme where government gives funds to charities and commercial organisations in return for in kind social benefit and financial return, with built-in incentives for private investors and philanthropists to give.

It’s effectively a mechanism by which the Government can provide funding to some of the UK’s cultural institutions on a basis which is repayable, but does not constitute additional fixed debt which we are unable to bear. Yet whilst CIPS would provide additional support to the sector post-reopening, it offers a mechanism that allows for a return on investment for government rather than straight relief funding. The benefits:

  • Repayment Obligation (% surplus + social value) means that cultural institutions are repaying when they can, rather than merely asking for a grant
  • Quasi equity structure means that institutions are not burdened with a fixed loan which will create repayment difficulties in future
  • Public recognition of social benefit helps benchmark cultural institutions for part of the broader contribution to society 
  • Ensures that charitable organisations are able to effectively leverage continued philanthropy to support education and community work
  • The partnership of charitable and commercial funding offers the genuine prospect of financial return for the government

This kind of investment would kickstart the theatre sector’s economy, retaining institutional workforces, generating re-employment for freelancers, maintaining the skills base, rebuilding confidence and encouraging audiences to spend money in related sectors such as hospitality. In 2018, theatres and venues generated ticket revenue of £1.28 billion, employing 290,000 workers. Over 70% of those jobs are now at risk. 

CIPS would effectively serve as a national pledge for culture, and delivers a strong public narrative that the theatre sector institutions and productions are committing to provide returns for any such investment whilst delivering a much-needed societal benefit. 

At The Old Vic we work with 10,000 young people each year to deliver employability training, education workshops, talent development, wellbeing and community isolation projects. All of this is fundraised for and delivered by us at no cost to the public purse. We want to be around in a year’s time to continue to continue that work delivering societal benefit. And we’re not the only ones – charitable theatres across the country have a duality to their identity that is less understood: artistic powerhouses with a strong social mission to create opportunity and cohesion in their local communities. CIPS offers us and others an opportunity for the government to not only ensure the continuance of the sector but also to continue and bolster the social benefit aspect of our offer which – across all of our organisations, over multiple years – will benefit millions of young people. 

We know government are listening and engaged. But as a sector we don’t have long before we have to make changes to our organisations that are irreparable. CIPS represents a workable solution. Let’s hope we can ‘get CIPS done’ and make sure there are theatres to visit, projects with which to support our schools, communities and the next generation of talent, support for the economy through our continued prosperity, and healing for communities through the art we create and share, when we come out the other side.

Kate Varah

Executive Director