The Department of Finance has published the National Recovery plan. Mary Hanafin’s statement can be seen here. The salient facts as they relate to the arts sector, as far as we know, are as follows:

• The artists tax exemption has been retained but with an annual cap of €40,000. According to the Department, this will cover more than 80% of artists who avail of the scheme currently . (10 other tax reliefs have been completely abolished).
• Cuts of the budget of the Department of Tourism, Culture and Sports
• Savings of €76 million need to be made by 2014.

These are being frontloaded in 2011 with a cut of €26 million. Final figures will be announced on Budget Day.€50 million will be saved over the remaining 3 years. Only €5 million of this €26 million will come from a reduction in allocations to cultural institutions and cultural projects. See below:

• Reduced allocations to cultural institutions and cultural projects €5 million
• Reduced funding for sporting bodies and agencies including Irish Sports Council and National Sports Campus €3 million
• Reduction in tourism expenditure through operational efficiencies, prioritisation of activities and more focused tourism marketing investment €5 million 

We checked with the Department today and we understand that the €5 million cut to culture covers Budget Lines D1-D10 in the annual  budget . In other words €5 million has to be saved from across the following budget lines. How much eachwill be reduced by will be announced on Budget Day on Dec 7^th.

• D1&2 National  Archives
• D3 IMMA, the Chester Beatty Library, National Concert Hall and the Crawford Gallery
• D4 Cultural projects
• D5 Cultural Infrastructure
• D6 Culture Ireland
• D7 The Arts Council
• D8 National Museum
• D9 National Library
• D10 The Irish Film Board (However, the bulk of the Film Board’s money comes from the capital budget. The Minister re-stated her support for the Film Boardin her statement today

The capital budget for the Department announced today remains healthy: €96 million in 2011 and €100 million in 2012. While this is spread between Tourism, Culture and Sport, the belief is, there is adequate funding for the Film Board in the capital budget. Sport appears to have been cut less than the Culture and Tourism budgets. Given that we were expecting worse, a €5 million cut is not as bad as expected. However it is worth noting that an additional €50 million in cuts, across the whole Department, over the following 3 years is needed. Worryingly, the Arts Council is specifically mentioned in terms of a reduction in allocation.

The cumulative impact of these cuts over 4 years is of course unknown.

Below is a transcript of a press release from the Department of Tourism, Culture & Sport

Tourism, Culture and Sport can contribute to national economic recovery - Hanafin

Over €360 million will be spent on capital projects across the Tourism, Culture and Sport sectors over the next four years said Minister Mary Hanafin T.D., today (24th November 2010) following the publication of details of the Governments National Recovery Plan. “This funding will enable us to complete the upgrading of tourist attractions, support continued investment in the film and audio-visual production sector and meet the commitments of the Department’s capital programmes in relation to the grants approved under the Sports Capital Programme, the Local Authority Swimming Pools Programme and the arts and culture infrastructure programmes. All Government Departments are making their contribution towards the economic recovery and the Government has made some very difficult choices. The adjustments in allocations for the three sectors, while not easy, are proportionate and measured.The savings in current spending for 2011 total €17million, of which €4million will be in administrative non-pay overheads. Total current spending across the three sectors will be in the order of €296million in 2011. Over the lifetime of the plan the Tourism, Culture and Sport areas will contribute savings of €76million in current expenditure.” 

Minister Hanafin welcomed the clear recognition of the tourism industry in the National Recovery Plan as a labour-intensive sector that will provide job opportunities and foreign revenue earnings as the economy recovers. “Our priority now is to continue to invest, upgrade and promote the tourism product in order to take advantage of the recovery. In the coming years we will be focussing on upgrading major tourist attractions, developing a number of key iconic attractions, improving infrastructure in key growth areas such as walking, water-based activities, cycling and heritage. Investment will also continue to enhance and promote cultural tourism, eco tourism and conference business across the country. Investment in ICT to achieve these objectives will also be prioritised.” 

Minister Hanafin said another key aspect of the plan is the steps which will be taken to liberalise visa restrictions for visitors from long haul markets. “All of the research points to a growth in tourism numbers from new markets, in particular India, China and the Gulf States.” 

In relation to the hotel sector, there is a commitment to pursue legislation to overhaul and streamline the property revaluation process, as revaluation to date has resulted in significant reductions in commercial rates for hotel premises. The undertakings to maintain the lower VAT rate on labour intensive services and to introduce a new Business Investment Targeted Employment Scheme to replace BES are also very positive developments for this sector. For many enterprises in the tourism and hospitality area currently facing cost and pricing pressures, the proposed measures in the National Recovery Plan designed to increase labour flexibility, through modification of the National Minimum Wage and a speedy review of the Joint Labour Committee Framework, will be welcomed.

“We are looking to increase visitor numbers to 8 million by 2015, which will have the potential to deliver up to 15,000 extra jobs directly in the sector.”

Minister Hanafin said investment in arts, culture and the film sectors in the 2005 to 2010 period is over €1.1bn. “In that time, there has been an unprecedented investment in national and regional arts and culture infrastructure, performance venues and film and TV production capacities. Visitor numbers to the National Culture Institutions have grown by over 75% and participation rates in the culture and arts activities have increased. In the context of the four year plan, we will continue to prioritise capital investment in the film and audiovisual content production sector and maintain the exhibitions programmes at the National Cultural Institutions. We will complete the refurbishment of the Historic Wings of the National Gallery, the upgrade of the Irish Museum of Modern Art, and the upgrade of the National Museum on Kildare St. The digitisation programmes of key historic papers and collections will continue and, regionally, we will continue to invest to support the cultural tourism product, especially in the use and deployment of smart technologies.”

Day to day expenditure will be concentrated on national and regional venues, building excellent programming and leveraging the regional festivals programme. Through Culture Ireland, building on our arts and culture reputation abroad to grow further business and economic links and developing the cultural tourism product market for the home and international markets. The funding being allocated to the sport sector over the lifetime of the plan will assist the Irish Sports Council in their support for a range of existing programmes. Minister Hanafin said “sport is an integral part of Irish life and culture, and participation in all sports has a positive effect of individuals’ health and wellbeing. The fact that a local town, club or county is competing in sports is also a matter of immense pride and the positive impact of this cannot be lost sight of in the current national climate. Support for our elite athletes is also funded through the Irish Sports Council and in the past week I received the submission on behalf of the Governing bodies for Sport in Ireland which highlighted how sport matters to our health, economy, tourism and our communities.”

ENDS

Note for Editors Capital Expenditure D/Tourism Culture and Sport The Plan includes the following new capital envelopes for the D/TCS Vote Group for 2011 to 2014. Breakdown of the detail in the Tourism, Culture and Sport subheads will be outlined in the Budget on 7 December. Current Expenditure – D/Tourism, Culture and Sport As outlined in the Plan, the Department is to contribute current expenditure savings of €76m by 2014. Programme savings of €17m will be achieved in 2011. Of this, €13m will be achieved through reduction in allocations across the Tourism, Culture and Sport headings. The required level of reductions are €5m, €5m and €3m respectively. In addition administrative savings of €4m will be achieved in 2011. A detailed distribution of these savings will be outlined in the Budget on 7 December. The full year impact of the current expenditure savings being made in 2011 will be €26m by 2014. Between 2012 and 2014, further current expenditure adjustments of €50m will be required.