The Southbank Centre has announced it is at risk of closure until at least April 2021, as a result of the economic impact of COVID-19, disclosing details of crippling financial pressure as its reserves run dry.
The charity states that it is forecasting a best case scenario of a £5m loss at the end of 2020/21 financial year. However, in arriving at this position, the organisation will have used up all its reserves and be in deficit, will have needed £4m support from the Government furlough scheme and will have used the remainder of its annual grant from Arts Council England to effectively mothball the buildings. There will be a need to make some staff redundant and the organisation will cease to be a going concern before the end of the year if further urgent support is not secured.
Despite being the UK’s largest arts and cultural organisation, the Southbank Centre confirms that there will be hardly any artistic activity throughout 2020/21 as to present anything like a normal range of events would have seen the losses rise to around £11m (after furlough support and ACE grant), given the restrictions that social distancing impose on the ability to realise workable ticket revenue.
The announcement comes as the Southbank Centre releases the initial findings of a new report by Hatch Regeneris, a leading, independent economics consultancy which illustrates the cultural and economic value of the Southbank Centre to the cultural sector.
The Southbank Centre presents over 3,500 events a year – of which over 40% are free – and welcomes enough visitors to fill Wembley Stadium 50 times over. At its heart is the Royal Festival Hall – the iconic and only remaining building from the 1951 Festival of Britain, a Festival designed to be “a tonic for the nation” following the country’s endurance of the second world war.
As a key arts hub, the Centre works with international artists, gives a home to eight orchestras and supports grassroots cultural activity. An extensive creative learning programme reaches young people and families, the socially isolated, and those affected by homelessness, dementia and addiction. All of this work is now under significant threat.
The Southbank Centre’s annual Arts Council England grant represents just 37% of its income. While the arts charity has been extremely successful at replacing its declining public funding with earned income from ticket sales, bars, restaurants and other commercial activity that takes place across its site, this success now makes the Southbank Centre highly vulnerable. The mandatory closure of the venues, bars and restaurants has led to the immediate and catastrophic loss of 60% of its income.
With the likelihood of social-distancing measures remaining in place for many months to come, the venues are unlikely to be able to re-open until April 2021, as to do so on restricted capacities (30%) means the organisation would lose more money by opening than it would generate.
The Southbank Centre now calls on the Government to:
Extend the furlough scheme beyond October for the cultural sector;
Develop a large scale intervention to support the arts sector as it navigates this crisis and which helps it survive and plan for the future;
Support those self-employed artists and musicians who do not qualify under the current financial support schemes.
Alongside supporting over 7,000 FTE jobs in London’s cultural visitor economy, the Southbank Centre is an important cultural tourism asset. Around 1 in 10 of all London’s international visitors went to the Southbank Centre, along with 1 in 3 cultural tourists. The report notes that four out of five tourists to London cite “culture” as the major reason for their visit, and these visits support 80,000 jobs and £3.2 billion in Gross Value Added in the capital. This is supported by the Association of Leading Visitor Attractions (ALVA) who note that the Centre is the UK’s fifth most visited attraction.
In addition, there is a growing body of evidence on wellbeing effects from engaging with the arts: the report estimates that given its local reach, the Southbank Centre supports in excess of £150 million in wellbeing value per annum for the UK.
Today’s announcement comes as the Southbank Centre makes preparations to cancel events from September – November 2020. The organisation is also considering the option of broadcasting concerts from behind closed-doors through Autumn 2020 and Spring 2021.
Elaine Bedell, Chief Executive, Southbank Centre, says:
“It is with an incredibly heavy heart that we today share further details about the future of the Southbank Centre. We know we are not alone in this and stand with our friends, partners, and colleagues – both here in the UK and abroad – during this time of unprecedented challenge. With eight orchestras, the National Poetry Library, and Arts Council Collection all calling us home, and playing host to over 4.45 million visitors each year, we’re doing all we can to safeguard the Southbank Centre we currently know and love for the years ahead. However, this crisis has hit hard, and we join a number of other organisations and venues in sounding the alarm about the long-term health of UK arts and culture. The Southbank Centre’s own history is traced directly to the 1951 Festival of Britain. Here, the post-war government recognised how vital arts and culture were to the health and well-being of a traumatised nation. Just as the South Bank was a focal point of social and economic recovery then, we hope that we’ll emerge from this crisis to an even brighter future, throwing our doors wide open once more.”