The Surplus

panta rei dans lullaby

Video - Panta Rei Danseteater 'Lullaby'

Norwegian dance company Panta Rei Danseteater, late last year, conducted a little experiment whereby three dance makers created two pieces with the same name based on the same idea, featuring three male dancers and two musicians, to see what the outcome was.

June 2nd, 2016

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Last year, in April to be precise, Arts Council England (ACE) announced a new stream of funding entitled "Sustain". Totalling some £40Million this money was, ostensibly, to be used to support arts organisations through the ups and downs of the global financial crisis that was gripping the world at the time.

In October of 2009 ACE announced that one of the main recipients of this money was Sadler's Wells Theatre in London. The amount awarded was £720,000, to be paid in two stages. The first £360,000 in March 2010 and the second in March 2011.

ACE told Article19 that the Sustain grant was awarded because;

"Through these challenging times, Sadler's Well has been able to generate a surplus which is in line with previous years by exercising stringent financial controls and maintaining its artistic quality. This surplus is reinvested in to the commissioning programme, enabling it to support the broader dance sector. Our Sustain funding was to maintain its artistic programme and to support it against a box office shortfall."

Weird Logic

Now, hold on to your hats dear readers because this is about to get complicated.

Financial years run from April 1st of one year to March 31st of the next year. For the financial year of 2009/2010 Sadler's Wells was awarded over £2.3Million by ACE as part of its regular funding agreement.

Sadler's Wells told Article19 that their surplus, from 2005 onward, was derived from not spending their annual contingency funding of £300,000. As the word suggests a contingency is what you budget for in case something goes wrong, like a global financial crisis.

"Each year since 2005, by not spending the annual contingency of £300,000, Sadler's Wells has been able to turn that into a surplus and reserve it for the commissioning and producing of new work."

Funneling your unused contingency into commissions is a good idea. If you don't use the money then spend on it something useful, something practical. That is of course until you realise something might go wrong and you might not have the contingency to turn into a surplus for the following financial year.

When asked by Article19 what happened in September/October of 2009 to cause them to apply for Sustain (the actual application was made in July of 09) Sadler's Wells told us;

"When it became clear the economic crisis was creating a more challenging environment in areas such as box office (our primary income source) and fundraising, Sadler's Wells applied for the Sustain grant. The parameters for Sustain applications were based on judging the potential impact of the recession. We applied, as it looked likely we would not succeed in creating a surplus, predominantly so that we could continue to commission new work and to a lesser degree, continue to develop our web capability."

The London theatre has been betting on not using its contingency in order to fund commissions for the following year. Far from being a contingency Sadler's Wells was looking at this £300,000 as nothing more than funding in advance for projects taking place a year later.

What of the recession? By the time we get to March 31st of 2010, and the first part of the Sustain grant being given to Sadler's Wells, the Office of National Statistics had informed the world at large that the UK was no longer in a recession. In fact, they announced this in January of 2010, some two months earlier.

Such was the strength of the economic calamity befalling the London theatre they were able to announce, in their just published annual report, box office income of £13Million for 2009/2010 derived from over 600,000 ticket sales.

In fact, Sir David Bell, Chairman of the Board of Trustees at Sadler's Wells wrote in that report;

"Despite the difficult current economic climate, the past year has seen audience figures continue to rise and the theatre's activity continue to expand"

Although this information was published in October, Sadler's Wells would have had these numbers on March 31st, when the first part of Sustain was being paid into their bank account by ACE.

Slipping Salary

The annual accounts for organisations are held with Companies House in London. They are required by law to file each year

Anyone can access the accounts, and other documents, for a fee but unless you're an accountant then there is not a lot to be understood from reading them

That said we were able to glean some data such as the salaries of the top earners at Sadler's Wells.

As it says in the piece Mr Spalding, the AD of Sadler's Wells, is paid £128,000 plus a £15,000 performance bonus. The accounts show however that someone at The Wells was paid between £160,000 and £170,000 for the year 2008/2009.

At the time of writing Sadler's Wells have not yet explained who or why the amount was paid and why it is dramatically more than the information provided by the theatre.

Although this feature is not about the salaries of individuals we feel it is important information so our readers can compare and contrast the very different world inhabited by professional dancers and the upper echelons of theatre management.

Whether or not a person is worth the amount of money they are paid is usually subjective. But in the publicly financed arts it is a matter of compelling public interest.

We will update this sidebar when or if Sadler's Wells provide us with the information.

Mark Rhodes, the Finance Director at Sadler's Wells, told Article19 via email that the theatre came out of the 09/10 financial year with an unrestricted surplus of £465,000 (the theatre ascribes this part of their surplus to receiving the Sustain grant). They also had restricted donations of £239,000. During the current financial year they pushed £359,000 into commissions that left a net surplus for the theatre of £345,000.

Without Sustain the theatre would not have as much money for commissions, Mr Rhodes didn't say what the donations were restricted to, but they would not have been running a deficit.

Remember, ACE provided Sustain funding for Sadler's Wells to "... maintain its artistic programme and to support it against a box office shortfall." Except their box office shortfall never happened and ACE did not seem to think it prudent to ask the Sadler's Wells management why it could not operate its theatre and commissions using the more than £2.3Million annual grant it had already received for the year.

Sadler's Wells basically got caught with its pants down. Their over reliance on their contingency being unused year on year forced them to go running, hat in hand, to ACE for more funding. There was no evidence that the theatre was hurting from the global financial crisis or the recession before or after the first part of the Sustain grant was handed over.

Their grant from ACE for 2010/2011 is £2,468,189.

Cutting Cuts

Two weeks ago ACE announced that all regularly funded organisations would receive a cut of 6.9% to their budget for the year 2011/2012. ACE explained that the 6.9% across the board figure was derived for no other reason than expediency, it was not derived from detailed financial analysis.

Sadler's Wells will lose £169,454 leaving them with just £2,286,395. However, on March 31st they will also receive the second part of their Sustain grant of £360,000 according to information supplied to us by the theatre.

£360,000 is more than most professional dance companies receive in a single year, in fact there are only three contemporary companies that receive more than that amount on an annual basis. Sadler's Wells Sustain funding would completely wipeout the cuts being made to more than a dozen dance companies for the coming financial year, although not for the longer term.

ACE explained to Article19 that they encourage all "organisations [we fund] to exercise prudent financial management and we encourage surpluses where possible." Here in TheLab™ we imagine that it is much easier to generate a surplus when ACE themselves are providing the funding that specifically creates that surplus. That is exactly what they have done with Sadler's Wells.

Yes, the theatre does spend money on commissions, they told us that this year they will spend £185,000 on commissions from UK based dance makers including Wayne McGregor, Akram Khan, the Balletboyz and Hofesh Shechter. But, Sadler's Wells is not a funding body.

Unlike ACE you cannot apply for a commission, you have to be chosen by the theatre's inner circle to become beneficiaries of their largesse. For example, Russell Maliphant Company received £237,814 from the theatre for 2009/2010 according to accounts published by The Sadler's Wells Trust.

Many company AD's will not have their worries about funding cuts soothed knowing that all they have to do is play ball with Sadler's Wells and all will be well. This is especially true for companies that are not based in London.

In a written response to our enquires ACE told us;

"Without Sustain, Sadler's Wells might not have been able to maintain its artistic output, leading to dwindling audiences that would have lead to a precarious financial situation which would have been bad for the company and the broader sector. We believe this was a timely investment."

During a follow up phone call an ACE spokesperson could not provide any explanation as to how Sadler's Wells benefits the "broader sector" unless a professional dancer or professional company is directly involved with the theatre.

As demonstrated above, the theatre was never placed in a "precarious financial position" even without the Sustain funding. As for "timely investment", ACE didn't make the first portion of the funding available until five months after the application was successful. The second part will come seventeen months after the Sustain grant was made public. We should all wish to have the amazing prescience of ACE, or perhaps not, if the facts of this situation are anything to go by.

Small Subsidy

A statement made in the annual report by Sadler's Wells AD Alistair Spalding says this;

"It is a difficult time for all businesses; impending cuts to the arts are going to force all venues to rethink how they operate and where their priorities should lie. Sadlers Wells has worked hard to ensure we are able to thrive despite a low government subsidy..."

Yes, you read that correctly. Mr Spalding considers £2.4Million to be "small". Over the last four years the London theatre has received more than £10Million in operational subsidy from ACE. In 1998 ACE (via the National Lottery) paid some £42Million towards the cost of completely revamping the building itself, inside and out. All arts organisations can only wish for such "small" investment.

Sadly, all of Mr Spalding's hard work, and that of his team, didn't appear to furnish them with the operational savvy to make up their commissioning shortfall from, for example, the £4.2Million wages and salaries bill for 09/10 as stated in their annual accounts filed with Companies House.

The theatre also managed to tap £2.3Million from private donors and sponsors over the previous financial year. It's not beyond the realms of possibility that they could secure additional commissioning funds from those sources. Smaller companies don't have those kind of options.

Sadler's Wells told Article19 that Mr Spalding currently earns an annual salary of £128,000. The theatre declined to give us details for his expenses expenditure for the year. When studying the accounts for 2009/2010 it emerged that one member of staff earned over £140,000. After further enquiries Sadler's Wells then provided additional information that Mr Spalding received a £15,000 "performance related" bonus for that year.

At publication time Arts Council England had not provided their thoughts on Mr Spalding being payed a "performance" bonus for a year in which his theatre claimed they needed an additional £720,000 in funding.

Mr Spalding has also received the same £15,000 bonus for this year.

Three other people at the theatre earn more than £70,000. According to ACE's own Dance Mapping Study, on average, a professional dancer earns in the region of £5,000 to £6,000 per year.

If this particular Sustain grant is typical of the decisions made by ACE for this programme then it shows an organisation that is either unwilling or incapable of distributing money based on up-to date information. Decisions are made then excuses to justify them appear to be dreamt up after the fact.

The coming changes to ACE's funding system would appear to place even more importance on funding and maintaining large scale organisations like Sadler's Wells to the detriment of the small to mid-scale. ACE is envisioning a sort of trickle down funding and support system whereby these huge organisations can provide a source of "excellence and leadership".

The type of excellence and leadership that Sadler's Wells demonstrates is simple. You should make bets with your funding and if they don't pan out go crawling back to ACE, they will give you more money because you have literally become too big to fail.

Does that remind you of anything?

  • hairy white man

    In most media when someone presents an argument they back it up with evidence. Please give me an example of better value for money of theatre operation/work being made and performed.

    Theatre de la Ville has a €10m subsidy, so Sadler's Wells with about third of that is doing all right.

    Yes for quite a while I have found Sadler's Wells painfully conservative and main stream but they are doing an excellent job of gradually bringing in more work of artistic risk and value. Their largely mainstream audience offers a great opportunity to entice numbers towards more interesting work.

    ACE has their hands tide with politics, the idea of an ACE mono culture horrifies me. The wider diversity of people making decisions about commissioning the richer our art form.

  • (scrolls back to the top of the piece to check title) ..... nope, it says 'The Surplus', not 'The Value For Money Gambit'. The piece highlights the misuse, by ACE and Sadler's Wells, of a particular strand of funding. Sadler's Wells main budget is shown to illustrate the extent of their funding. ACE is politically insulated, allegedly, so they should have the bottle to act that way.

  • Kema

    HWM: Still haven't got the bottle to use your own name?

    How does Sadler's Well getting extra cash benefit me in any way? I would have liked to have seen William Forsythe, Russell Maliphant et al but I live in Manchester.
    I would have preferred that money to go toward the Touring Budget so I can see more dance without having to travel 200miles.

    People who go to the theatre and watch contemporary dance, opera, drama are not a mainstream audience!!

    ACE don't have their hands tied with politics, they should just have the balls to say, "No, you are doing quite well with that cash you have already, use that fallback cash you've been saving!!"

    cheers

    Kema, Manchester

  • hairy white man

    Sadler's Wells does operate on a small subsidy, and has done a lot of good to the profile of contemporary dance in the UK.

    I don't care if their subsidy seems big, it's not for what they squeeze out of it. Good on them for fighting their corner.

    The problem is not with Sadler's Wells or ACE, the problem is the attitude to the arts generally in this country. The tory cuts are a clear symptom of the ignorance of the value of the arts.

    Community projects and attempts at positive discrimination should be funded by a separate body. I totally embrace the underlying philosophy of positive discrimination but it has little to do with making great art.

    No one talks about the lack of black dancers in the royal ballet, well, no one talks about the lack of black politicians much either. This is a country of horrifying class division, black people being under represented in the RB or ENB is a tiny indicator of the deprivation that many suffer.

  • Kema

    Hairy White Man why don't you use your own name? are you a London based someone who doesn't want to lose funding ? :)

    Sadlers Wells has done nothing to the profile of Contemporary Dance in Manchester, London is not the UK!!

    Mate, I talk about the lack of Black BRITISH Dancers in the Royal Ballet!! It has nothing to do under-representation or deprivation.
    There are black british dancers in the Royal Ballet School but they are stepped over for dark skinned but "exotic" foreign dancers.
    Go to this website and count the English names.
    http://www.ballet.org.uk/ab...
    What this says to me is that our English Ballet Schools aren't training people well enough to employ here.

    cheers

    Kema, Manchester

  • By no definition is £2.4Million "small". We would also argue that many dance companies, with far less money, do more for the "profile of contemporary dance" than Sadler's Wells. Most of their ticket sales and box office revenue are derived from middle of the road "populist" work like AMP's 'Swan Lake'.

    The problem, as illustrated, is very much with ACE and large scale organisations. The theatre did not need the additional money but ACE gave it to them anyway. The idea of trickle down advocacy, support or expertise is a myth.

  • Kema

    That's because most dance people haven't got the balls to speak/write/email what they really think when it's about something that really matters.

    They are all afraid just in case someone at ACE sees it and they'll lose any chance of getting funding again.

    No one will talk about the lack of British Dancers in English National Ballet.
    The lack of Black British Dancers in the Royal Ballet.
    How you won't get rregualr funding if one company someone matches your company in terms of ethnicity,disability etc. These companies then tick boxes for ACE which tick boxes for DCMS which ticks boxes for the Government. i.e. 1 disabled/contemporary company, 1 black led contemporary/streetdance company, 1 contemporary/indian company, 1 touring/education company etc etc etc. If you get the Arts Council Funding data and spend an hour you will notice how the funding pattern works.
    If you are disabled/black/asian/old/work in a deprived area/work with prisoners/pensioners you will tick a box for some part of the Government so they can say they are contributing to all parts of society.

    But what is really happening is these cuts are affecting community level arts activity.
    In Manchester both my kids dance classes are being affected, what people don't realise is a lot of arts activity for young people in inner cities is part funded by the Youth Service, this may be a simple subsidy on your space, you get kids off the street and raise their heart rates you get a free dance space hire. So I need to fundraise because my kids danceteachers have been told they are going to have to pay for their spaces, this ranges from £20 - £40 an hour which realistically can't be passed on to the parents!!

    Come on Dance Artists speak up, this will affect you!!

    cheers

    Kema

  • Will

    I don't get it, these guys write a piece about disabled dancers in regular companies and the hate mail spews forth. They write a piece about what amounts to legalised corruption and outlandish pay for some bloke in a suit and............ crickets!!

  • Juan

    Good article.

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