Thursday 20 May 2021 6:00 am ICAS Talk

Culture shock

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Christian Koch is a journalist and editor who writes about business, culture and societal trends for magazines and newspapers such as the Evening Standard, the Sunday Times and the Independent.

Covid-19 has left the UK’s world-leading arts sector fighting for survival. As museums and theatres prepare to reopen, four expert CAs tell us how their work has been upended and what their recovery roadmaps look like.

This article first appeared in ICAS’ CA magazine.

All dramatists know the importance of a happy ending; the gratifying denouement that neatly wraps up the plot’s twists and turns, leaving the viewer breezing out of the cinema or theatre with a smile on their face. The 363,000 people working in Britain’s arts and culture ecosystem, who have been living out their own cruel drama in the past year, are hoping that cheerful coda will arrive on Monday 17 May. On that day, the nation’s theatres, galleries and museums are set to reopen along with restaurants, bars, hotels, cinemas and gyms.

It will hopefully mark the end of a cataclysmic 14 months for the sector, which has arguably suffered more than any part of the British economy, hospitality and aviation aside. With doors shuttered for much of the pandemic, many of our arts and culture venues have struggled to stay afloat, with an estimated 55,000 jobs lost as of December 2020. Prior to the pandemic, the sector contributed £10.8bn a year to the British economy.

Of course, the £1.57bn Culture Recovery Fund (topped up by an extra £400m in March) offers a vital lifeline. There’s a tough road ahead though: at the time of writing, only £495m of the fund had been paid out, and with venues operating at reduced capacity to ensure social distancing, it could be years before they see a profit.

We catch up with four leading CAs in the sector to hear how they’ve weathered the cultural catastrophe and their hopes for that happy-ever-after ending.

The theatre

Tim Maycock CA is Director of Finance at Birmingham Hippodrome, which hosts West End shows and is home of the Birmingham Royal Ballet. It is one of the busiest theatres in the UK, attracting 500,000 people a year before the pandemic.

Life under lockdown: “Covid-19 felt as if somebody had put a bomb underneath us. We’d gone from 2019 being our most successful year ever to having all our income – apart from fundraising – disappear overnight. Out of 129 staff, we sadly lost 56 of them. We lost our restaurant too. When we shut down in March 2020, I modelled a worst-case scenario of reopening six months later.”

The support: “Thanks to the Culture Recovery Fund and furloughing, we’ve kept our heads above water; it’s given us a real fighting chance. However, a lot of the DCMS money has been spent on the theatre’s operational costs. Also, because of Covid-19, many theatre producers can no longer get commercial insurance. I’m part of a UK theatre ‘Pandemic Re’ group asking government to underwrite cancellation insurance claims.”

The pivot: “When restrictions lifted last year, we couldn’t hold stage shows, so we transformed the theatre into a multi-sensory Van Gogh Alive exhibition. It attracted 28,000 people, but was only open for a month before the second national lockdown hit. Our socially distanced Robin Hood panto was also scrapped. We staged digitally streamed performances, including The Color Purple. The hybrid live/digital model isn’t lucrative but it allows us to access a much wider audience.”

The future: “We did have The Lion King booked this summer, but sadly the tour dates had to be moved. But we’ll be reopening Van Gogh Alive on 25 May and expect to be running socially distanced shows until autumn. I’m feeling optimistic – the 2022 Birmingham Commonwealth Games may see a boost to domestic tourism – but the real crunch is if social distancing is still in place for our panto and annual Nutcracker ballet. If ticket prices and volume return to normal, then we should as well by 2022/23. I hope customer confidence returns quickly; everybody I know is champing at the bits for tickets.”

How CAs can help: “In a crisis, such as when your entire income stream has been depleted, the ability to forecast the future with a robust set of numbers is the only thing that matters. The wide base of knowledge gained through CA qualifications allows you to do that.”

The ballet

Jim Pettigrew CA is Chairman of Scottish Ballet, the forward-thinking national dance company based in Glasgow. He was also 2015-16 ICAS President.

Life under lockdown: “For ballet dancers, not performing for over a year can take a huge chunk out of your life. Like sportspeople, they need to be in peak physical condition and with Covid-19 restrictions making rehearsing impossible, it’s been difficult for them. Some of them have been busy delivering virtual classes, or in our community initiatives, such as Health at Hand, where we’ve held dance/movement sessions for NHS and health workers. We’ve also staged dance classes for people living with neurological conditions, such as Parkinson’s, multiple sclerosis and dementia.”

The support: “The Scottish government has provided funding, while we also furloughed dancers and staff. At Christmas, we made a feature film, The Secret Theatre, broadcast for free on our website. It was watched by 55,000 people everywhere from Alaska to the Pacific Islands; we received over £150,000 in donations. We’ve also had supporters donating barres [the horizontal exercise bars] and equipment to dancers so they could practise at home.”

The pivot: “Our virtual offerings have forced us to change our strategic thinking. While we obviously want Scottish Ballet back on stage, the success of our virtual classes and The Secret Theatre means we also want to continue with digital, expanding the connections we have with supporters across the world.”

The future: “Unfortunately, reopening ballet isn’t a matter of flicking a switch. We need to get dancers back to peak fitness, so reopening in May might not be possible. When we do return, it might be at reduced capacity [due to distancing] or even outdoor performances, which will depend on the good old Scottish weather. The arts can play a vital role helping people recover from the mental stresses of the pandemic. Whether it’s watching Scottish Ballet or staring at a gallery painting thinking about nothing, art creates joy and enhances wellbeing.”

How CAs can help: “By bringing their financial skills to culture companies, CAs can play a critical role in their recovery. Not only is it a brilliant way to develop your career – you learn the most in tough situations – but working in the arts is a wonderful job too.”

The art gallery

Innes Chalmers CA is Finance Director of Edinburgh’s Scottish Gallery, the country’s oldest commercial gallery, which has been in operation since 1842.

Life under lockdown: “The Scottish Gallery’s revenue comes primarily from selling artworks, rather than footfall (our admission is free). Our overall sales dropped by 50% while we were shut. As for my work, I’ve found myself playing the role of confidant and friend, providing reassurance and emotional support while running through cashflow projections.”

The support: “We took a bounce-back loan to give ourselves some additional cashflow, and received grants and a business rates exemption from Edinburgh council. We only furloughed two or three of our 12 staff members at any one time. The support has been reassuring; it was important that our experienced, long-serving staff kept on working.”

The pivot: “Before the pandemic, we had already slowly tilted our business model towards selling paintings via the website. Covid-19 has absolutely turbo-charged that, making it essential. While the pandemic has been awful for the finances of many people, those with money have been looking around their house, spotting bare walls and thinking, ‘Let’s put something up there’.”

The future: “When we reopen on 17 May, we won’t be flinging the doors open: I suspect visits will be by appointment-only. We also need to be aware that the economic fall-out from Covid-19 could result in wealth taxes or rises in income tax, which could impact our ability to sell artworks. Engaging with younger customers is something that we need to think about too – do millennials and gen Z have the appetite to own a beautiful painting by James Morrison or Denis Peploe?”

How CAs can help: “When the seas get rough, FDs can give businesses a clear view of the shore. The CA’s ability to put that into a cashflow forecast that says ‘we probably won’t fail’ is a huge reassurance that helps business leaders sleep soundly at night.”

The museum

Clara Lopez Prunonosa CA is Management Accountant at the British Museum. The UK’s most popular museum (around six million people pass through its doors every year) has been closed for much of the past year, its longest peacetime shutdown since its opening in 1759.

Life under lockdown: “The decrease in footfall at the British Museum has meant a general decrease in hospitality, gift shop income and donations. It’s also been a busy year for management accountants. Our workload has increased, whether it’s creating and coordinating new budgets for Covid-related expenditure, such as hand gel stations and masks, or reforecasting exhibition income based on new socially distanced capacity figures. To manage this, we’ve had to learn to communicate effectively while we’re working remotely.”

The support: “At the start of the pandemic, many colleagues were on furlough, and the Job Retention Scheme provided funding when revenue streams such as venue hire came to a halt. Other government funds have supported our conservation and museum maintenance. Our longer-term research programmes have been extended too, thanks to support from likes of the Arts and Humanities Research Council and the European Commission. It’s meant we’ve continued researching and caring for our collection while the world has been on standstill.”

The pivot: “We created digital tours of exhibitions Arctic and Tantra, and an Objects of Crisis YouTube series in which experts reflected on objects linked to historical crises. This digital content has increased engagement with audiences outside of London, reaching out to people who have never been to the British Museum before, including schools and international audiences.”

The future: “It’s been great bringing our collections to people’s homes, but there’s something wonderfully experiential about art. I believe – and hope – once this is over, visitors will come back to experience our objects face to face.”

How CAs can help: “This crisis has shown that CAs are flexible and resilient. During the first lockdown, our finance function had to adapt to complete all processes digitally and remotely, practically overnight – made more challenging by coinciding with our financial year-end. CAs can think outside the box and are problem-solvers – both extremely important skills at a time of so many unknowns.”