For What its Worth: Measuring Value & Impact in the Arts Patrick Neeson Department of Culture, Arts and Leisure.

For What it’s Worth: Measuring Value & Impact in the Arts

Patrick NeesonDepartment of Culture, Arts and

Leisure

1. My contribution to the debate2. What is DCAL doing?3. Some initial results

1. My contribution to the debate

“What do you get if you multiply six by nine?”

“Six by nine. Forty two.”

“That's it. That's all there is.”

So, what are the values?

• Economic

• Social

• Individual

What types of economic value / impact might there be?

Economic?

1. Spend by organisations

Deliveries/distribution

Publishing/PR

Repairs & construction

Catering/dining

Cleaning

Need to be careful here

- is the spending carried out within the jurisdiction or outside?

-the distinction is an important one

- I’ll come back to this in a minute

1. Spend by organisations

2. Spend by audience /

participants

Tickets

Travel/parking

Meals and drinks

Equipment

Training/Participation

Accommodation

2. Spend by audience /

participantsNeed to be careful here too

- is it spend by tourists from outside the jurisdiction or spend by locals?

-the distinction is an important one

- I’ll come back to this also

Economic Impact Study - Example

Impact calculations

Part 1. Spend by Audience

- 10,000 visitors to the show

- Everyone spends £100 on tickets, meals, travel, etc, etc

Impact calculations

Part 1. Spend by Audience

10,000 x £100 = £1m

Impact calculations

2. Spend by Cast/Crew

- 100 cast and crew

- Average spend on hotels, meals, shopping, etc per person is £5000

Impact calculations

Part 2. Spend by Cast/Crew

100 x £5000 = £500,000

Impact calculations

So, total spend =

£1m + £500,000 = £1.5m

Spend by visitors

Spend by cast/crew

Impact calculations

Part 3. Spend by Host

- Set design

- Production cost

- Make up

- Lighting

- Etc, etc

Impact calculations

Part 3. Spend by Host

- Let’s assume this totals £1m

PLUS – ‘Multiplier effect’ of spend rippling its way through the economy

= £1m x 1.3 = £1.3m

Impact calculations

Overall Total =

£1.5m + £1.3m = £2.8m

Spend by visitors + cast/crew

Spend by host

But…

Part 1. Spend by Audience

- 10,000 visitors to the show

- Let’s assume 90% of these visitors were ‘local’ (i.e. within NI)

- Then only 10% of these visitors are additional

But…

Part 1. Spend by Audience

- Therefore, only spend by 1,000 visitors is additional

- In other words, the benefit of spend by visitors =

1000 x £100 = £100,000 (Not £1m)

But…

Part 2. Spend by Cast/Crew

- 100 cast and crew

- Average spend on hotels, meals, shopping, etc per person is £5000

- Let’s assume that most are from outside of NI so most is additional

However…

Part 2. Spend by Cast/Crew

- What was this money spent on?

- Where were the goods and service bought sourced from?

Champagne, Kebabs and Bespoke Pillows - Belfast Prepares For The MTV Awards

“A-list celebrities and some of the top media executives in the US will be here, so just how prepared is Belfast?”...

“MTV said that Belfast's hotels played a large part in their decision to bring the awards here and at one of the city's plushest, they're ready. They've painted the railings, polished the door knobs, ordered in 500 extra bottles of bubbly and fresh Italian truffles. “… “Adrian McLaughlin, the manager of the Merchant Hotel, said they've had some strange demands in the past: “Everything from a specific type of drink, maybe some off-the-wall products that we have to get in from America.

“Some of them like the air conditioning to be at a certain temperature on arrival, others like the humidity to be regulated, so we've had to bring in dehumidifiers and things like that for bedrooms, but as we say in the hotel, we can do anything for anyone so long as its legal."

Part 2. Spend by Cast/Crew

- We only count the ‘Gross Value Added’ of any money spent

- Typically, this is around 40% of gross spend

Impact calculations

Part 2. Actual Additional Spend by Cast/Crew

100 x £5000 = £500,000 x 40%

= £200,000

Impact calculations

So, actual total spend by visitors =

£1m + £500,000 = £1.5m

£100,000 + £200,000 = £300,000

Additional spend by visitors

Gross value added of spend by cast/crew

What about..?

Part 3. Spend by Host

- We have to look at where this money was spent and what it was spent on

- If spend leaks outside the local economy, then this is a loss

Also – the Multiplier

Having a multiplier is fine but..

1. There is no straightforward read-across from one place to another

2. Don’t assume its effect happens instantaneously

3. In small economies, it is smaller

How does this affect our estimation of the value of spend by the event’s hosts?

Remember,

We had estimated this was worth £1.3m (£1m x 1.3 multiplier)

But, we now need to make the adjustments that I mentioned

Impact calculations

Part 3. Spend by Host- Original estimate = £1m x 1.3 = £1.3m

ADJUSTMENT 1: some of the spent will be on goods and services that is outside NI

Let’s assume 30% leaks outside

So, only 70% of the £1m happens in NI = £700,000

Impact calculations

Part 3. Spend by Host

ADJUSTMENT 2: we only count the GVA of the spend

Again, assume 40% is GVA

Only 40% of the £700k spent locally is GVA = £280k

Impact calculations

Part 3. Spend by Host- Totals £1m

Let’s assume 30% leaks outside +Only 40% of that spent locally is GVA +Multiplier actually = 1.2= £1m x 1.3 = £1.3m= £280,000 x 1.2 = £336,000

Impact calculations

Actual Overall Total =

£1.5m + £1.3m = £2.8m

£300,000 + £336,000 = £636,000

i.e. only around 22% of the original estimate

3. Other spend by tourists

Because Belfast has a better cultural offering, it will prove more attractive to tourists

– they may not necessarily ‘do’ culture

4. Inward Investment?

Because Belfast has a better cultural offering, it might encourage more inward investment

– executives in these companies want a place to live in and bring up their families

4. Inward Investment?

Cultural investment as a tool for regeneration

What types of social value / impact might there be?

Social?

Social?

• Could culture have an impact on society? Educational

Educational

Do we mean here that culture will improve cognitive skills – make children smarter in other words?

Educational

Are there other types of learning outcome?

Educational

Social?

• Could culture have an impact on society? Educational Health

Health

Does culture make us healthier?

Social?

• Could culture have an impact on society? Educational Health Others

Civic prideImage

Reduction in crime

Community cohesion

Anti-deprivation

Reduce racism/sectarianism

Improve well-being

“Social Clauses”

• DCAL aim is to maximise the social benefit from investment

• Clauses included in procurement contracts

• Also maximise the social returns during operation

What types of value / impact might culture have on individuals

Individual?

Individual

• We know that it exists but..

• Difficult for the individual to identify what the impact is

• Difficult to measure this in any meaningful way

• Might vary over time, even for the same individual

Cultural good

Other good “Indifference Curve”

10

5

3 6

10 other goods + 3 cultural goods = 5 other goods + 6 cultural goods

Initial conclusions

1. There is value associated with culture

2. We shouldn’t assume that there is one single answer in attempting to measure this value

3. There are different types of value or impact

4. We also shouldn’t assume that each activity/good has the same impact

2. What is DCAL doing?

Department of Culture, Arts and LeisureSocial and Economic Research and Survey Programme 2012 – 2016

Aims

• To strengthen the link between research, policy development and service delivery within DCAL.

• To enhance the evidence base for the impact DCAL has on the economy, health, education, social inclusion and the environment.

• To provide improved co-ordination between the Department’s and the Arms Length Bodies research teams.

• To enhance interest within the research community in the areas of research relevant to DCAL.

Research Programme - principles

• Recognises that there are different approaches that can be used to attempt to measure the ‘value’ in what DCAL does

• Building up the evidence base

What are the factors that affect whether someone participates in a cultural activity?

Does household income have an affect on participation?

Can we measure the ‘willingness to pay’ for cultural goods?

What are the impacts of DCAL learning programmes?

Is the creative industries a fast growing sector of the economy?

Does participation in culture impact on individual well-being?

What are the impacts of DCAL health programmes?

Can we develop a ‘cultural tourism’ index?

Can we develop a ‘cultural deprivation’ index?

DCAL RESEARCH QUESTIONS

What current evidence is available around impact?

3. Some initial results

What are the factors that affect whether someone participates in a cultural activity?

Does household income have an affect on participation?

LESS LIKELY TO ATTEND A LESS LIKELY TO ATTEND A LIBRARYLIBRARY

MORE LIKELY TO ATTENDMORE LIKELY TO ATTEND

Older peopleOlder people

Females Females

Those with childrenThose with children

Those in employmentThose in employment

Income on its own does not predict the likelihood of attendingIncome on its own does not predict the likelihood of attending

In receipt of benefitsIn receipt of benefits

Own a carOwn a car

The higher the educational attainmentThe higher the educational attainment

Those in urban areasThose in urban areas

Those who participate in other cultural Those who participate in other cultural activitiesactivities

What are the impacts of DCAL learning programmes?

•There were an estimated 1.2 million There were an estimated 1.2 million participants in culture, arts and leisure participants in culture, arts and leisure learning programmes in the time learning programmes in the time periodperiod

•Over half of all programmes (52%) Over half of all programmes (52%) were related to the curriculum with were related to the curriculum with 10% accredited10% accredited

•Over half of programmes contributed Over half of programmes contributed to STEM (57%)to STEM (57%)

•Three-quarters of programmes are Three-quarters of programmes are available throughout all of Northern available throughout all of Northern IrelandIreland

OUTCOMESOUTCOMES•Improved employabilityImproved employability•Acquisition of new learningAcquisition of new learning•Volunteer developmentVolunteer development•Achievement of accreditation Achievement of accreditation •Increased confidenceIncreased confidence•Offered opportunity to share skills and Offered opportunity to share skills and experiencesexperiences•Increase in interestIncrease in interest•Curriculum connections and Curriculum connections and integration into classroom practice integration into classroom practice achievedachieved•Encouraged creativityEncouraged creativity

What current evidence is available around impact?

Evidence that arts programmes impact on social inclusion

SOCIAL IMPACT OF

ARTS PROGRAMMES

No evidence that arts changed attitudes of marginalised students towards school;Evidence that participation in arts could contributetowards re-engaging marginalised students back into education by changing attitudes towards learning

Some evidence that arts learningprogrammes impact on behaviourof marginalised students.

Inconclusive evidencethat arts programmeswould increase attendance orparticipation in the arts.

Can we measure the ‘willingness to pay’ for cultural goods?

Users Non-users

£2.50 per month

£2.50 per month

Translates to a total annual value of £42m

“What is the average willingness to pay for library provision in NI?”

Can we develop a ‘cultural deprivation’ index?

Conclusions

• Continue to develop the evidence base

• Recognise that there are different ways of measuring different types of value

• BUT make sure it is carried out correctly – for example, too many economic impact studies done wrongly which overstate the true economic benefit