WMCA – Making the Case for Culture

Published 29 June 2023
Updated 29 June 2023

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Making the Case for Culture - Business Case Evidence

1. Introduction

Arup was commissioned by West Midlands Combined Authority (WMCA) in November 2022 to develop a business case paper that would provide evidence on the case for investment in culture from the perspective of developers/investors and local authorities. This paper therefore presents the arguments for the inclusion of culture in property developments that local authorities, developers and investors lead on or are involved in.

For the purposes of this project, culture is defined as:

Activities by organisations whose Standard Industry Classification (SIC) code is listed as cultural or creative by the Department for Media, Culture and Sport (DCMS)1 and
Activities undertaken by organisations that create, transmit and protect collective values, beliefs and ways of life of a society or cohorts within it.234 A SIC code + approach will be used when defining culture. A full definition review paper and explanation of why this definition was selected is provided in Appendix A.2.

A planning paper was also commissioned by WMCA and sits alongside this business case evidencing paper (288875-ARUP-RP-T-000001). The planning paper presents research findings on how town planning can play a role in directing investment in culture. K

1.1 Scope

This business case evidencing paper seeks to provide robust evidence to outline the benefits of including culture in a variety of different types of developments and therein to support decision making to unlock investment opportunities for the culture sector and wider social and economic benefits.

Key elements and tasks for this work include:

A literature review on relevant frameworks, tools, and models from the UK and elsewhere that demonstrate the economic (and other) benefits of culture. The review would examine why investing in culture through specific developments, projects, and planning makes sense across different development types.
Engagement with a minimum of four developers and/or investors who have invested/included culture in their developments in the West Midlands or elsewhere in the UK to develop reference case studies. The case studies, where possible, include at least one example from a town centre and one example linked to repurposing. The four relevant case studies would include data and analysis of different types of benefits, returns, barriers, and enablers for integrating culture into development projects. Considerations for impacts beyond purely economic metrics are included, where possible, together with impacts and roles of different stakeholders within the process.
Completion of an evidencing paper.

2. Executive Summary

2.1 Introduction

This section provides an overview of the key findings from the research project. Two executive summaries are presented below which are tailored to two different audiences: Private sector developers and local authorities and other public sector developers. Developers and developments for this research will focus on spatial development projects, such as cultural workspaces and services. These can either be a standalone cultural project or projects that form part of a wider physical capital development. The private developer focussed executive summary focuses on the financial and commercial benefits of including culture in developments such as a residential scheme. The local authority executive summary focuses on the reasoning for public sector intervention by identifying market failure and outlines the social and economic benefits of including culture in developments, such as high street regeneration. Both executive summaries are underpinned by an extensive literature, case study interviews with four (public, private and charity developers) developers who included culture as part of their wider development.

2.2 Private sector developers

A literature review and case study interviews revealed benefits for developers and their reasoning for including culture in development.

Culture helps to address the needs of developers, for example:

the need to offer something different and establish a competitive advantage.
improving their reputation amongst communities and local authorities.
meeting the objectives and the requirements of an area’s local plan and development strategies.

In summary, the benefits to private sector developers are derived from creating unique places that make attractive planning proposals. Similarly, all developments have areas that are not suitable nor likely to generate high residential or commercial yields such as; ground floor/basement spaces. Culture can reactive vacant or underutilised spaces in a development which offer a sense of place, community and destination. These drive footfall and dwell time, increase the attractiveness of the development to future occupiers, and increase the longevity of the development. If more people are visiting a location and there is demand from current and future occupiers for the development, then commercial benefits would include increased rental and sale values, decrease vacancy rates, and reduced tenant turnover, all leading to improved or maintained long-term financial performance and return on investment. Using culture to create attractive and in-demand residential and commercial developments, ultimately increases the land value of the development and uplifts the value of the surrounding area.

Increasing community buy-in for a development by including culture should support the project’s planning approval process and reduce the developer’s project risk. This can deliver longer-term reputational benefits for the developer which can be used to increase the likelihood of future success in new markets and developments.

Simply including culture as a tick-box exercise will not guarantee that a development is successful or that the potential benefits will be realised. For culture to play a financially beneficial in any development, the case studies indicated many key success factors, challenges and learnings. At the heart of this is a collaborative, trusting partnership between developers and cultural organisations and the community with a shared vision. Other things also play a role such as timing, early engagement, design, complimentary uses and commercial and financial feasibility.

Arup’s key recommendations for potential next steps to help developers improve the case for culture in their projects include:

Increase knowledge sharing amongst developers and culture sector organisations on how to work together, sharing best practices, and sharing evidence of benefits.
Enhanced engagement and co-design with communities and consideration of clustering effects with other uses.
Evaluate and monitor case studies for their long-term benefits, including commercial benefits and vacancy rates.

Arup’s key recommendations for how private sector developers can include culture in their developments:

Engage with internal stakeholders and establish the case for including culture – acknowledging that benefits may not be tangible nor easy to quantify.
Identify under-utilised or low-yield spaces in developments as well as spaces that will maximise the impact on the development as a whole.
Explore, in partnership with cultural organisations, the suitability and viability of utilising these spaces for cultural purposes.
Track and monitor benefits and potential disbenefits of any investment made.

2.3 Local authorities and public sector developers

Our literature review and case study interviews revealed significant benefits for society from the inclusion of culture in development. Despite these benefits, the culture sector suffers from multiple market failures, as described in section 6.2.1. These market failures undermine the culture sector’s ability to fully capture the value it creates and limits their ability to supply the amount of culture society needs for wider economic growth and wellbeing.

Culture helps to address many of the current most pressing issues and needs for the public sector, such as:

regenerate declining high streets and urban centres.
boost local economies and economic opportunities for local people.
reduce local and regional economic inequalities i.e. ‘level up’ the economy.
the need to provide statutory services, library services, amidst rising costs.
The benefits identified span across three main categories: economic benefits, culture sector benefits and

social benefits (including health and wellbeing).

The economic benefits

These stem from culture’s ability to make unique and attractive spaces, diversifying the uses of local places and spaces, such as, High Streets, and offer a reason for people to visit. By attracting people and businesses to a place, culture increases footfall, dwell time and activity and increases confidence for businesses looking for space. This raises land and rental values in a development and in the surrounding areas. This reduces vacancy rates and turnover and has a positive effect on jobs and businesses. Ultimately this can support wider economic growth, regeneration, housing and office provision and create a success story that leads to future funding successes. The significant economic benefits that culture generates can mean that culture is a victim of its own success, with rising rents and land values making spaces unaffordable for culture in the long-term.

The benefits to the culture sector itself

The sector has a lot to gain from being involved in a variety of capital developments, such as high street regeneration or residential schemes. Our case studies reveal that in addition to having access to affordable, secure and appropriate space, cultural organisations benefit from clustering with other businesses, and see their own skills and networks increase from working with and learning from developers and other organisations. It also offers them routes to increase people’s engagement with culture, through relationships with developers’ clients, to sitting alongside other uses which attract different audiences, such as retail or leisure. This all has the effect of making culture sector organisations more resilient through increased capital investment (from secure tenures), increased income and financial security, new enterprise opportunities, and supporting culture sector jobs.

The social and community benefits

Socially, culture enables a development to become a place for people to go and interact with each other, gives a sense of uniqueness, place, and community. Cultural development increases access to culture and educational opportunities for young people and people of disadvantaged backgrounds. Culture is also an effective tool for communicating complex ideas with the wider public. The literature review and case studies show that culture can positively impact on reducing social isolation, increasing life satisfaction, improving educational attainment, and reducing crime. Therefore, it can be a tool for increasing health and wellbeing of communities and can benefit public sector services for health, education, social care and justice, at a time when many are facing significant demand and budgetary pressures.

Our case studies indicate many key success factors, challenges and learnings. Funding, financial security, long-term investment and tenure, and access to space are some of the better-known issues for the sector, but relationships, collaboration, leadership and championing by local authorities, engagement, a common understanding in partnerships, and an understanding that people and communities are what makes culture - are all also extremely important for the sector. Evidencing benefits is also crucial for buy-in with decision makers and investors.

The literature and case studies aimed to build an evidence base, but there are still large gaps. Cultural services often cannot easily quantify or monetise their wider social value, leading to an inability to access funding, investment and other opportunities to grow. First, we need to build evidence for commercial developers for the inclusion of culture in developments. Second, we need to make the case for culture to be included in development.

Key recommendations for how the public sector can undertake research to build the evidence base for the inclusion of culture in developments include:

Research and pilot approaches that enable the culture sector to monetise and benefit from more of the value it creates.
Evaluate and monitor cultural investment projects for their long-term tangible benefits, including commercial benefits and vacancy rates.
Support additional research into the relationship between culture and property value uplift, especially housing. The Creative Land Trust Value Added Metric research methodology could be replicated in the West Midlands to evidence cultural cluster impact on property values.
Additional research into the social benefits of culture, in particular, health and wellbeing, pride in place, community cohesion, and impacts on public sector services and how to quantify or value these in a way which is accessible to culture organisations.

Key recommendations for how the public sector can develop a robust business case for the inclusion of culture in development:

Develop a robust evidence base – understand the size, need and contribution of the culture sector in the local area.
Ascertain community and senior leadership buy-in early – through evidencing the value of the sector.
Encourage cross-departmental working by communicating the case to all stakeholders (i.e regeneration, town planning, events).
Using the evidence base, develop a cultural strategic action plan and align this to the area’s local plan and strategic priorities.
Develop a flexible, proactive approach to supporting the sector based on its needs, through enhanced early engagement with local cultural services and communities.
Long term support should be prioritised over short-term meanwhile interventions, particularly around cultural workspaces.
Monitor and evaluate real-life interventions to document tangible and direct benefits of culture. This will strengthen the case for investment and improve access to future funding.

2.4 Report Structure

The research underpinning the executive summaries is provided below. The rest of the report has the following structure:

Details on the research methodology for this project.
An outline of the current size and contribution of the culture sector to the National and West Midlands

economy.
An outline of the private sector focussed benefits of the culture sector, case study findings and useful resources on how to make the case for culture as a private sector developer.
Justifying support for the culture sector by outlining market failures that exist in the culture sector.
An outline of the public sector focussed benefits of the culture sector, case study findings and useful

resources on how to make the case for culture as a public sector developer.

3. Research Approach

In undertaking this research for WMCA, Arup’s research approach has comprised four main components:

Reviewing existing culture definitions and agreeing a research definition and area of focus.
An extensive literature review of more than 70 policies, pieces of research and other best practice publications relating to the benefits and disbenefits of including culture within developments and the wider cultural sector.
Four case studies, including four interviews with developers with whom there has been a successful inclusion of culture in a development. A further two conversations were completed which have been included in the findings and conclusions of this report but were not developed into full case studies.
Attendance of a one-day Culture in Planning Symposium in Gravesend, Kent. The findings are referenced in Appendix A.2.

3.1 Literature review

An extensive literature review was undertaken analysing more than 70 research, policy and other publications. The aim of the literature review was to identify evidence of the benefit of culture inclusion in developments, the enablers/barriers to benefit realisation, and the current context of the culture sector.

The sources were systematically reviewed by a number of key themes, which were:

Sectoral context
Type of benefit
Type of supporting data
Beneficiaries

3.2 Case studies

• Type of return on investment • Benefit enablers
• Barriers to benefit realisation • Disbenefits

Case studies were identified through desktop research and then assessed for their relevance and focus to the research. The aim was to ascertain a breadth of different types of developments whilst acknowledging the niche nature of this research may limit available case studies and potential evidence available. Key criteria questions are listed below:

Local to the WMCA area (within a constituent member boundary)?
Within a town, city or rural context?
Stage of development? (pre, planned, current,

delivered)
Is there a repurposing element to the development?
Is there a housing element to the development?

• If delivered, is there good data or evidence to substantiate benefits of the inclusion of culture?

• Does the planned or current offer of the development match DCMS sic codes?

• Does the planned or current offer of the development match the definition of culture with Arup’s ‘SIC code +’ approach?

Twenty-three potential case studies were reviewed, and eight case studies were shortlisted and contacted for involvement. Four public, charity sector and private sector developers agreed to take part in a one-hour interview. These were:

Upper Trinity Street, Cole Waterhouse and Jez Collins in Birmingham, West Midlands
Cornwall Buildings and Grand Union Gallery in Birmingham, West Midlands

The Glass Works, Barnsley Metropolitan Borough Council (MBC) in Barnsley, South Yorkshire
Former Marks and Spencer’s (M&S) building Sparks Bristol with Artspace Lifespace in Bristol, South-

West.
Two additional case study examples were interviewed to supplement the wider research. These were:

• •

3.3

Coventry City Culture programme, Coventry, West Midlands. Martineau Gallery development, Birmingham, West Midlands.

Limitations

The findings of the research are limited due to the availability of data. It was noted in some case studies that not all enabling factors or barriers were included due to commercial and political sensitivities. This research should not be viewed as an exhaustive or comprehensive guide to making the case for culture nor a list of the full benefits for making the case for culture.

4. The Culture Sector

4.1 Defining the sector

4.1.1 Culture definition review

In collaboration with WMCA, Arup’s research definition of culture will focus on intentional cultural activities as presented in the green shared circle in Figure 5. Intentional cultural activities for this research are defined as purposeful actions to create, protect, and transmit collective norms and values of a society or cohorts within, as highlighted in Figure 6. Arup’s review of the definitions for culture, as set out in Appendix A.2, highlights the difficulty in finding a clear definition of culture or cultural activity amongst key cultural organisations within the UK.

Figure 5 above is an indicative matrix display of the definition of culture by cultural organisations. It aims to showcase spatially the enormous breadth of what culture is and can be and where this research will ultimately focus. The x axis places organisations based on whether their primary activities is intentionally or unintentional cultural. For example, is their primary activity for the purpose of creating, transmitting or protecting collective values and beliefs of a society. The y-axis places organisations based on whether their primary activity is a live, creation of culture (production) or retention and archive of previously created culture (preservation). This research will aim to focus i.e intentional cultural activities as there is a gap in business case guidance and the scope of the project means there is a need to narrow the focus of the research. A full explanation of this diagram and the rationale for de-prioritising unintentional cultural activity is provided in Appendix A.2.

The definition review found that a definition of culture varies widely and can encompass most organisations. Therefore, for this research to have utility a clear definition has been developed. This two-stage approach to the definition of culture will use DCMS’ sic codes for cultural organisations omitting organisations whose primary activities are not intentional cultural activities. Secondly, we will test these omitted organisations to see if their main organisational activities include intentional cultural activities. This is to capture the breadth of cultural activities, minimising the limitations of the DCMS sic codes.

Arup’s indicative definition of culture as presented in Figure 6 is an example of how intentional cultural activities can be identified. It is subjective and should not be viewed as definitive. For a full report of the culture definition review, please refer to Appendix A.2.

4.2 The Culture sector in context

4.2.1 National

Figure 76 highlights the key benefits that the creative and cultural sectors7 have on the UK economy. The arts and culture sector is a large direct employer but also supports employment indirectly through supporting demand for other sectors in the economy, such as tourism, hospitality and retail.

Cebr’s Contribution of Arts and Culture report8 on the economy research paper notes:

The arts and culture industry directly generated £28.3bn in turnover, £13.5bn in GVA, 190,000 FTE jobs and £7.3bn in employee compensation (total remuneration in cash or in kind) (2018).
For every £1 of turnover directly generated by the arts and culture industry, an additional £1.23 worth of turnover is supported in the wider economy through indirect and induced effects (2018).
The sector contributed £3.4 billion a year to the Treasury via taxation and received £440 million (2018).
The arts and culture industry are a highly productive sector. On average between 2015 and 2018, it

produced an annual GVA per FTE worker of £69,000, compared to UK national average £57,000 (2018).

4.2.2 West Midlands

The culture is an important sector for the regional economy. A West Midland Cultural Sector Analysis report produced in 2021 highlights the impact of the sector, as presented in Figure 89.

The reports key findings are listed below:

24,480 people are estimated to be employed in the cultural sector in the West Midlands.
There are 16,320 people are formally employed in the cultural sector across the WMCA region and estimates suggest that the cultural sector could have up to an additional 50% headcount once freelancers are included.
The sector accounts for approximately 0.9% of the total employment across the area, although supports a much wider number of jobs, as this underestimates the size of the freelancer economy and wider spill over effects. This includes a range of occupations (e.g. cultural organisations employ accountants and retail professionals as well as core cultural professionals).
The WMCA area has one of the largest cultural sectors when compared to other combined authority areas across the country, and the sector’s employment share is roughly equal to that of the Liverpool City Region and West Yorkshire Combined Authority areas.
A large proportion of the area’s cultural employment is based in Birmingham, with other hotspots of activity in Stratford-on-Avon, Warwick, and Coventry

The cultural sector has been rapidly growing over the last five years (+20%) exceeding the national growth rate (+12%) and the wider economy growth rate for the WMCA area (+5%)
COVID-19 had a significant impact on the cultural sector, with around a third of employees taking up the Coronavirus Job Retention Scheme (CJRS) and the number of job postings down by 29% since 2019 at the time of publication.
The cultural sector workforce has a much higher proportion of part-time workers relative to other sectors of the economy (with noticeable exceptions in Stratford-on-Avon and Lichfield).
There is a relative lack of diversity amongst the cultural sector workforce, with underrepresentation from ethnic minority groups and lower socio-economic backgrounds.
In summary, the cultural sector in the UK and within the West Midlands’ economy plays an important role in supporting employment, productivity and economic output. The sector is highly interdependent with other economic sectors such as hospitality and tourism. As the sectors value is often intangible and difficult to capture it is does not bear direct revenue from the wider economic and social value. It will need further support to materialise the economic and social benefits of investing in and including culture in developments.

4.3 WMCA’

The WMCA has a clear organisational priority to support the development of the cultural sector in the West Midlands10. This research projects aligns with their strategic objectives for culture, most specifically in relation to objectives 1, 2 and 3 below.

Strategic Objective 1: Business Development – Support the cultural sector to grow and recover after Covid-19, strengthening regional networks and building resilience
Strategic Objective 2: Participation – Making sure that all our communities realise the benefits of culture (wellbeing, quality of life, cohesion)
Strategic Objective 3: Placemaking – arness culture’s potential to transform our cities, towns and local centres through unique experiences, a thriving night-time economy and defining the identity of a place
Strategic Objective 4: Promotion – Use our major cultural events and diverse cultural institutions to position the West Midlands as the best place to work, live, visit, and invest.

5. Making the case for developers and investors

5.1 Purpose

This chapter outlines the economic evidence for the inclusion of culture, focussing on the benefits to the private sector and future private sector developers. The chapter summarises the findings from the literature review, case study interviews and symposium to provide a theory of change logic model as well as the key thematic benefits (and disbenefits) for the inclusion of culture in developments.

5.2 Benefits evidence

5.2.1 Summary

The literature review and case study interviews found there was a significant gap in the evidence base of the benefits of including culture in private sector developments. There has been little research in this field to date. While wider social and non-quantifiable benefits of the sector were extensively found in the literature review, there is a large research gap around property and land value uplift that should be explored further. Early indicative evidence highlights there are strong benefits, but they have not been measured consistently or robustly to date. Key benefits found are listed below:

Increase property values

There is some initial research which identifies clear quantifiable benefits of including culture and how it improved the value of developments. Table 211 summarises key analysis undertaken to highlight

outperformance of residential values in the presence of cultural clusters compared to the area average. Key findings the report include:

Taking out performance over and above the area benchmark as an indication of value created by the presence of creative workspace. In London, this value-add metric is 4.4% per annum (measured over 10 years) and in the Thames Estuary, it is 3.3% per annum (as a more emergent market, this was measured over 5 years). There was an association with the presence of creative workspace and outperformance (in residential price terms).
The research also looked at Margate residential values, comparing values in 2010 and 2017 shows a growing incidence of higher residential values alongside creative space.
While this source is useful it is unclear how other exogenous (unrelated) variables have been controlled in the analysis. Further research and exploration of the results is needed.

Reduce risk and high churn rate

• The Creative Land Trust research paper found that the creative sector can be a more secure letting than alternatives, such as hospitality. The paper highlights that there is a premium on having a sector that can reliably occupy business space in a way that supports, rather than interferes with, the attractiveness of a mixed-use scheme. A ground floor creative workspace use in a residential development does not introduce any additional risk and can increase investment value because there is a good covenant and secure long-term income (or a long leasehold sale).12

Increases footfall and dwell time

• Case study evidence from The Glass Works in Barnsley highlights between 20-50% increase in town centre footfall during cultural and arts events programmes, as presented in Section 6.6.1.

Public perceptions

Case study evidence from The Glass Works highlights that after town centre arts and culture events such as (Bright Lights festival and Dancing Town) attendees viewed the town centre and the council more positively, as presented in Section 6.6.1.
Middleport Pottery redevelopment in 2016 surveyed local communities and found 83% of the local community said the project made the area a better place to live and work or visit, 80% of community felt an increase in pride in the local area.13

Supports planning permission

• Creative Land Trust research report highlights that creative workspace satisfies town planning policy obligations to protect employment space.14

• Bruntwood and Cole Waterhouse developers in the Grand Union and Upper Trinity Street case studies interviews highlighted that cultural and community cohesion and complementation is a priority for town planning teams in the West Midlands and elsewhere in the UK. Having strong community engagement and a development that complements and amplifies the existing culture and community can make a planning application be viewed increasingly positive, as presented in Section 5.3.1 and 5.3.2.

5.3 Case studies

5.3.1 Grand Union Gallery, Birmingham

What is the cultural offer and how was it delivered?

Grand Union is a gallery and artist workspaces charity in Digbeth, Birmingham. They operate creative workspaces in Minerva Works, a gallery space with free exhibition and events programme, and also artist-in-residence free studio space within Bruntwood’s Cornwall Buildings, a Birmingham office development. Bruntwood commission these artists to produce a work of art for the building and also pay artists to run a programme of activities for Bruntwood’s clients. rand Union acts as a connector and mediator between Bruntwood and artists. rand Union’s rowing

roject is now one of Bruntwood’ charity partners.

Grand Union is acting as the primary developer for the £3.5 million redevelopment of the Grade II listed workspace, Junction Works in Digbeth, Birmingham. It will include a mix of affordable and commercial workspaces for visual arts and other creative businesses. The plan is to include a gallery, a café and events space to diversify the offer and provide space for regular arts and event programmes.

Who was involved?

The relationship between Grand Union and Bruntwood started when Bruntwood approached Grand Union to introduce some artwork to the Cornwall Buildings and grew from there; because of their shared understanding of the value of promoting a local arts organisation and artists. ob alentine, Bruntwood’s Director of Birmingham also became a Grand Union board member and the challenge of affordable spaces became apparent.

In relation to the Junction Works, Grand Union worked closely with Bruntwood who provided advice and legal support on the leasing of the building. Grand Union was able to access £500,000 of funding from the Greater Birmingham and Solihull Local Enterprise artnership’s ( BSL ) Local rowth fund1. rand Union also received commercial sponsorship and donations from local developers and trustees and Homes England provided a flexible lease on the property.

Rationale for inclusion of culture - How did you make the case?

Bruntwood is purpose led and seeks to invest into cities and places. They believe that culture is one of the components needed to create successful cities. Poor quality development has created problems and costs in

cities historically, and better placemaking is needed. To Bruntwood, inclusion of culture in their buildings makes good business sense as it makes the for a more interesting place to invest, live, work and helps drive the economy. They also see it as a way to entice people back into offices and city centres, by creating individual spaces which are less corporate. The art commissions have made the building feel like an art gallery and have become an extensive collection.

Many buildings have some underutilised, redundant, or low value space. Bruntwood saw an opportunity to use the basement spaces of the Cornwall Buildings as studio spaces, once upgrades such as lighting and water access were made. Grand Union were approached by Bruntwood and worked closely with the developer to create an offer that would benefit the Cornwall Buildings. rand Union listened to Bruntwood’s corporate aims for the Cornwall Building and collaborated to align the residency programme to the building and complement their office offer.

Bruntwood are now rolling out this model to other areas of their business and transforming it into a more commercial model where space which cannot be let as offices is converted to artist studios or cultural spaces to create vibrancy and generate rents which would not have been achieved otherwise. They would like to explore how other types of redundant spaces, such as car parks could be used for culture in the future. To make the case internally, they bring a set budget, outcomes, and financial appraisal to the company board. The financial appraisal aims to understand what rent the space would have gotten and create an affordable offer for artists.

In relation to the redevelopment of Junction Works, Grand Union noted any development needs to move beyond the historic retail model and provide spaces for people to enjoy and live. In the long term, the financial benefits of having strong footfall and desirable places to live and work will encourage commercial developers because of the likely increase in residential and commercial property values. Junction Works also has a strong social value offer, supporting local charities and providing spaces for business support workshops and networking.

Actual or Anticipated benefits

Creating vibrancy through a unique offer to developments – attractive to future tenants and existing clients.
Expected increase in footfall and dwell time, leading to increased property values.
Create sense of place and civic pride.
Provision of affordable workspaces and revenue streams for culture and artists.
Work opportunities between creative businesses and artists (clustering effect).
Benefits for artist residents such as additional commissions, employment opportunities through workshops, interaction with different businesses, becoming more commercial and business support.
Artists bringing a different perspective and ways of thinking.
Access to new skills and networks.
Utilisation of difficult to let, low value space, and generating rent.

Challenges

Resource needed to manage relationship with artists and the spaces.
Insecure tenancies and unfavourable lease agreements leading to lack of capital investment and

funding.
Lack of affordable cultural spaces and rising rents.
Developers using culture and arts solely for a service or for décor.
More suited for multi-occupier, mixed-used buildings than new buildings with a single occupier.

Future learnings - key success factors

Flexible, secure, and longer-term leases.
Shared vision and understanding of value between culture organisations and developers.
Strong buy-in and championing by commercial developers.
Demonstrating the commercial viability of spaces for culture.
Local partnerships and networking between cultural organisations and developers.
Funding and support from local and regional bodies i.e. GBSLEP.
Local authorities being more selective of who they work with

We would like to thank Grand Union and Bruntwood for offering their time to the research and for providing supporting data and evidence. For further information, please contact Cheryl Jones, Director, Grand Union Email: cheryl@grand-union.org.uk

5.3.2 Upper Trinity Street, Birmingham

What is the cultural offer?

Upper Trinity Street is a 5.1 acre, £260 million mixed-used development scheme in Digbeth, Birmingham developed by Cole Waterhouse. Cole Waterhouse plan to regenerate the existing brownfield industrial environment into a new cultural, commercial and residential neighbourhood built around a new public park and network of accessible yards and squares. The development will include affordable workspaces, secured through the s106 Agreement for cultural organisations and community sporting uses with the spaces provided at a discount to market rent. The proposed occupiers of these spaces are the Museum of Youth Culture & Birmingham Music Museum and the Pat Benson Community Sports Foundation.

Who was involved?

Cole Waterhouse reached out to a range of public and private sector cultural and community organisations across Birmingham as part of a comprehensive programme of stakeholder engagement which included face to face meetings, focus groups, online engagement and a stakeholder consultation day. As newcomers to Birmingham Cole Waterhouse were able to leverage the existing network of their locally based Cultural Consultant who played a pivotal role in facilitating the engagement.

Rationale for inclusion of culture - How did they make the case?

Cole Waterhouse were aware of the cultural and creative significance of Digbeth to Birmingham and wanted to reflect this by taking a meaningful approach to their cultural and creative placemaking. As a developer they wanted to reflect and respond to the existing local communities and they spaces they occupy as they understand placemaking is being afforded more weight in the planning decision making process.

A fundamental ethos that Cole Waterhouse take for all their development work is a long-term view to placemaking. They aspire to create places and buildings that are as good in 100 years’ time as they are today. Embedding schemes and engaging with the local community is a key contributor to this aim.

A fundamental requirement of any commercial development is the need to maximise Return on Investment (ROI) for investors. This can often be perceived as being at odds with the provision of cultural uses over what is often considered as higher yielding residential and commercial uses. In order to bring culture into developments it is therefore critical to demonstrate the social, cultural, and often most importantly, economic benefits for investors. The disparity between these aims is often initially misunderstood and so evidencing the 'win-win’ scenario of including cultural offers and embedding placemaking within developments is key.

Creative and cultural spaces not only make developments more desirable places to live in and for people to visit, this naturally drives increased footfall and in turn property values for both commercial and residential uses. Similarly, cultural and community spaces facilitate the creation of a strong community offer which in turn helps to secure longer term tenancies, reducing churn and vacancy rates, a factor particularly important in the BtR (Build to Rent) sector. It is clear people want to live in neighbourhoods that have cultural and creative spaces and places embedded in their community and by doing this it contributes to creating developments where people want to live and stay for longer and will, in the right circumstances, pay a premium to be there.

Anticipated benefits

Increase in commercial and residential property values.
Create a competitive advantage amongst other developments through providing a unique offer.
Provides a more attractive planning proposal to local councils and planning officials and demonstrates commitment to community and delivering good places.
Creating a community which reduces churn and vacancy rates.

Challenges and potential disbenefits

• Attracts young and professional demographics.

• Increased community engagement and buy-in for planned development reducing risks.

• Supports the visitor economy and footfall. • More stable commercial and residential

tenancies.

• Supports brand perception of developers.

• Customised space for culture organisations.

Community apprehensive of developers and future developments. It takes time to build relationships and trust with communities.
Institutional investors and developers can perceive culture as an altruistic endeavour. There is a need to change perspectives and evidence the social and economic benefits and track what works.
Lack of regulatory or requirements for culture can make the argument harder for developers internally more difficult.

Future learnings - Key success factors

Rigorous, early and meaningful approach to community engagement (acknowledging it takes time) to build trust).
Developer championing cultural benefits, open and willing to learn.
Networks and relationships between developer and community organisations.

• Shared vision, commitment and right timescales between parties.

• Design flexibly and not being too prescriptive. Thinking about the ground floor early on.

• Understand people make culture and the culture of a place will change. Have a broad view of what culture is.

We would like to thank Cole Waterhouse and Jez Collins for their contribution to the case study and for providing supporting data and information. For more information on this case study, please contact info@colewaterhouse.co.uk

5.4 Theory of Change and Conclusion

The M overnment Magenta Book for evaluation best practice states that “ ood policy-making necessitates a thorough understanding of the intervention and how it is expected to achieve the expected outcomes.” A Theory of Change is a tool to map this. While commonly used in the public sector, it can be used by the private sector to map how an investment, intervention, or business change will achieve outcomes.

Theories of Change set out the rationale for change (why change is needed), the interventions (or outputs) and the inputs required to deliver them, and then logically shows that change that occurs to lead to the ultimate impacts.

Figure 9 illustrates the high-level Theory of Change for the inclusion of culture in development, from the perspective of developers and investors. This has been informed by the case studies and literature review. It summarises the findings of the research and demonstrates the logic chain, rationale and many benefits to developers of including of culture in development. It shows that including culture can be beneficial commercially to investors and developers as the footfall and points of interest it creates increases the demand for and value of the development.

5.5 How to make the case as a private developer

Below are some resources which may help developers make the case and quantify benefits internally for culture’s inclusion in development.

Towns Fund - Measuring Land Value Uplift Impacts15
WMCA Cultural infrastructure map - Identifying cultural clusters for investment16

6. Making the Case for the public sector (Local authorities and Combined Authorities)

6.1 Purpose

This chapter outlines the economic evidence for the inclusion of culture in developments (such as high street regeneration), focussing on the benefits to the public sector and future public sector developers and funders of a wide variety of projects. The chapter also summarises the findings from the literature review, case study interviews, and symposium to provide a theory of change logic model as well as the key thematic benefits (and disbenefits) for the inclusion of culture in developments.

6.2 The Case for Change for the Public Sector

6.2.1 Justifying Public Sector intervention in culture: identifying the market failure

In order to justify public sector intervention in a market, it is important to identify whether there is a market failure, where the market does not work efficiently to provide in supply or demand of a certain good or service. A market failure is defined below, alongside its causes, which can be used to identify whether there is likely to be a market failure.

Definitions

A market failure exists if there is a shortfall in market welfare optimisation (not providing the optimised amount of public or social welfare values which economic markets are unable to fully capture or register at all).17 A market failure can be caused when:

xternalities exist “when an activity imposes costs or produces benefits for economic agents not directly involved in the deal.”18
A public good, is a product or service that is “unavoidably available to all”.
Imperfect information: when there is an imbalance of information, it confers an unfair advantage to the

side (supply or demand) that has better information
Market power can also cause a market failure when there is not enough competition in the market, either from buyers or sellers having an unfair advantage, such as when there is a monopoly, collusion, or a monopsony (a single dominant buyer), or barriers to entering the market.

Examples of Market Failure in the culture sector

The culture sector exhibits characteristics of market failure, and many of these were evidenced in the literature and case studies.

i) Public goods

In the cultural sector, this can refer to arts, cultural and heritage where it is difficult to impossible to exclude individuals and community from accessing it. In the example of a public art display does not exclude those who do not pay for it and is generally not depleted by others using it. This creates an issue such that the private market has no incentive to provide the cultural goods, as they cannot reap any benefit from them.

ii) Imperfect information

It is difficult to value culture and set efficient prices, because they cannot easily take into account the wider benefits and value to society. It can be very difficult to put a value or price on culture creation as some have non-market values (i.e. what is produced is not bought or sold on a market or market prices do not include the full value to society – as with many health, social and environmental benefits). There are market prices for culture, such as ticket prices, hourly rates and the sale prices of art, however cultural goods and services vary significantly and are not always comparable with that of other producers. It may be difficult for culture producers to know what people would be willing to pay. Therefore, the buyer of culture is at an advantage as they know their own willingness to pay.

iii) Market power

There are barriers to entry for culture, particularly around developing spaces. Evidence from case studies and literature review suggests that there is a high degree of competition for cultural workspaces be due to funding and financial barriers. A lack of knowledge and networks prevent culture organisations from becoming owners of their own spaces. They are often reliant on short term leases and rarely own their own workspace due to affordability issues that exist. This creates a high degree of power with suppliers of cultural workspaces such as; developers and landlords.

iv) Positive externalities – social benefits of culture

Positive externalities in the cultural sector encompass a variety of different aspects at the individual and community level. Individuals can benefit from improvements in their well-being from local art and culture to more investment in the areas they live and work in. Similarly, house prices may go up as cultural activities and businesses can improve people’s perception of an area, which in turn will increase the wealth of local people. Local businesses can benefit from increased visitors coming to see cultural events or exhibitions who spend locally and see their income and profit increase. All these induced benefits are not always captured by or shared with the cultural or creative businesses.

v) Negative externalities

Negative externalities also exist in the cultural and creative sector. This refers to when there are disbenefits to those who do not consume directly consume the good or service and as a result are negatively impacted. For example, cultural events create traffic disruption and noise for everyone in a community, even those not attending the event.

6.2.2 Evidence of the consequences of market failure and barriers to growth

The literature confirmed that cultural, creative and heritage sectors do not always receive a payment or commission from the economic actors who directly and indirectly benefit from their goods and/or services.

Negative externalities exist, which means certain groups could be less willing to engage with cultural sector developments, i.e., local residents in fear of traffic or councils who are concerned with experience a net direct cost.19 The absence of an adequate pricing mechanism can be said to lead to lower wages and investment in the cultural sector:

Table below summarises the key barriers/issues the culture sector face, as identified in the literature review. Four key barriers arise from the desktop research which have been summarised in the table below. A cross cutting theme is low wages.

Consequence: Low wages

Lack of local political buy-in – strategies, commitments

Existing employment data under-reporting creative industry

•

The market wage rate can undervalue the total benefits of cultural goods and services. “Arts, ntertainment and ecreation” has the second lowest median annual gross wage of any industry in the

UK at less than £20k per annum (compared to a UK Median wage of £26k),20 ahead of only “Accommodation and Food Services activities.” This is despite relatively high qualifications of those employed in culture.21 The public good nature of culture means it is difficult to make those who benefit pay. For example, a community may appreciate and value that they live somewhere where there are museums and music events, but they might not actually patronage (and pay for) those events themselves. This results in a reduction in income available to cultural businesses and freelancers. This can mean that low wage sector such as cultural services do not have sufficient income to pay a higher wage to their staff. This is because additional social value of their work is not captured or monetised and returned to them; the cultural producer. A summary of key evidence from the literature relating to low wage sector can be found below:

Affordability is a particularly acute issue for some parts of the cultural sector, as artists are among the lowest earners in creative industries, they rely on there being a supply of low-cost workspace in which to conduct their creative practice.22

Research shows that there are real barriers to accessing cultural products and services, such as disposable income of residents and barriers to labour participation in the cultural sector, availability of affordable child-care (residents and workers).23

Cultural workforces do not always reflect their population, lacking ethnicity and socio-economic diversity. Deprioritising of creative subjects in schools pose a risk to the talent pipeline by limiting accessibility of cultural careers to disadvantaged cohorts.24
Culture plays a key role in inspiring people to consider creative training pathways.25
Figure 10 illustrates how low wages or wages that do not capture the social value the sector inhibits the

sector’s development, and in turn the wider social benefit realisation.

Consequence: Competition for workspace

• The literature review, case studies and planning symposium all highlight that access to workspaces is a significant issue for the culture sector. As businesses and workers are not receiving a higher wage they are struggling to compete for workspaces with other sectors. Similarly, the lower yield on creative workspaces in the context of high residential property prices deters investment in and the creation of cultural and creative workspaces. This leads to a scarcity of supply and exacerbation of unaffordable workspaces for the sector. What is affordable is often unsuitable or provided on a temporary or ad-hoc basis. This will likely inhibit the quality or volume of cultural goods or services the sector can produce. A summary of key findings relating to workspaces is below:

• The overwhelming obstacle for developers considering other uses of ground floor space is the difference in value between residential and other commercial uses. Residential has a much higher value.26

Creative workspaces in Digbeth are coming under significant pressure through increasing rents and increasing a conflict of uses with the incorporation of new residential developments into the area.27
Affordability also matters because artists are among the lowest earners in the creative industries. Artists rely on there being a supply of low-cost workspace in which to conduct their creative practice. A report commissioned by the Mayor of London (2018) estimates that 13,780 artists are on waiting lists and studio occupancy rates are at 95 per cent, suggesting demand is high and sustained.28
Even when cultural and creative organisations themselves are viable and sustainable ― their survival can be precarious in the face of increased property and land values.29
It is rare for cultural and creative organisations to own their own premises. For example, research shows that only 13 per cent of artist workspace operators own their freeholds. While land values are rising, most cultural occupiers will not see a similar rise in income.30
Many artists spoke of the financial insecurity and precarity they faced, with the studio providing a crucial source of psychological stability.31
Permitted development rights have allowed a greater range of uses to be converted without the need for permission. This has had a clear negative impact (on London), placing increased pressure on uses, such as pubs and creative workspace, in many instances contributing directly to their loss. The decline of industrial land has also had an impact, leading to a reduction of over 500 hectares of industrial land between 2010 and 2015. This is often where the city’s creative production happens so the impact has been particularly felt in the creative industries.32

Consequence: Lower investment in cultural organisations

Cultural services including museums, theatres and galleries, create social and economic benefits which are difficult to value and can create positive externalities, such as benefits to local homeowners’ house prices as the areas becomes more desirable to those who value living near cultural services. Therefore, cultural services bear the full cost, but do not always receive a share of the value produced. This reduces their financial performance and their ability to attract investment to put on more shows, expand etc. which inhibits the supply of these services and/or goods. Similarly, the sector struggles to access investment, from both private and public sources, because they cannot demonstrate their full value easily because their value is not fully monetised nor received in the form of monetary income. A summary of evidence is listed below:

Smaller organisations found it harder to catalyse private investment.33

Access to finance still remains a major barrier for creative and social enterprise.34
UK invests less on culture than EU counterparts, spending around 0.3% of GDP, under half of the equivalent in France or Denmark (0.8% and 0.7%) and lower than the EU average of 0.5%.UK public investment in culture has fallen by over £0.5bn over the past four years, from £4.4bn in 2012/13 to £3.9bn in 2016/17, a reduction of 11%. the contribution of the arts and culture industry to the Exchequer was over £2.6bn in 2015.35
Culture in planning symposium discussions noted live performance venues like theatres often do not have adequate reserves to undertake their own investment and struggle to attract private sector investment, as presented in Appendix A.2.

6.3

Summary

The research findings demonstrate the case for culture’s role in the local economy is strong, The report section below will focus on seven thematic benefits identified in literature review and case studies. These are:

Benefits evidence: Local economy

Diversifying and supporting high streets
Encouraging Footfall
Tourism – increasing visitors and spend
Reducing vacancy rates in retail centres

• Safeguarding and supporting jobs in the economy

• Increasing Gross Value Added (GVA) of the local and regional economy

• Commercial and residential value increases

Culture supports local high streets and economic centres by creating diversity of usage, an increased visitor offer and ground floor activation. This leads to increased footfall, tourism, perceptions of place and safety, increased evening economic activity and increased confidence for businesses to invest (for example, taking on leases). This in turn drives local spending and job creation, increases land and rental values for the development and the surrounding area, and reduces vacancy rates and turnover.

Figure 11 describes an indicative process of benefit realisation arising from the culture sector.

Culture as an economic sector also experiences direct benefits as a result of inclusion in development. The evidence for this was strong in case studies, where culture organisations cited increased skills and networks as a big benefit from working with developers, the public sector and other partners. In one case, a culture organisation was able to leverage the skills and networks to become a developer themselves. Security of tenure for affordable space allowed them to apply for grants for long-term capital investment or operations which then allowed them to improve their facilities, expand their activities, generate more income, and engagement with local communities.

A potential disbenefit that was flagged in multiple case studies was that increasing rents and land values could make spaces unaffordable for the culture sector and push them out, potentially taking some of the place differentiation that culture creates with it. Therefore, it is important that there is a strategy to provide long-term affordable spaces and housing to combat gentrification and protect the culture sector in areas where it has helped to generate economic success. A similar concern around meanwhile use was also raised, because due to the temporary nature, it meant that cultural organisations didn’t have long-term security and found it difficult to raise funds for meanwhile activities.

In case studies, public sector inclusion of and investment in culture in development was largely seen as a catalyst for further investment and funding for the area, as it demonstrated the local authority’s commitment to culture, placemaking and ability to deliver. This resulted in increased funding success for both culture organisations and the public sector and generated further transformation.

The literature review and case studies provide strong evidence that the inclusion of culture can support high street regeneration by driving footfall, spend and diversifying the usage away from retail-led uses. Culture can transform the perceptions of a town centre and be a vehicle for change. Key thoughts from the literature review relating to the benefit of culture to high streets and town centres is listed below:

Picture 2 Twisted Festival of Natural Art event, Barnsley town centre 2021

In Chatham-Intra High street, culture is used not only as a lever for regeneration but it is also seen as a way to commercially support diversification of the high street at a more viable level.36

Community surveys relating to the Middleport Pottery development in Burslem (2016) found 83% of the local community said the project made the area a better place to live and work or visit and 80% of community felt an increase in pride in the local area.37

Creative and sensitive place-making can help to improve a place from both resident and visitor perspectives, especially when it is part of a wider culture-led regeneration and urban design scheme such as Birmingham’s Centenary Square.38

A strong arts and cultural offer can support efforts to maintain or enhance the attractiveness of retail centres as places to live, work and visit by offering unique experiences for visitors and/or shoppers through the animation of public spaces including art works, live performances and opportunities for local cultural identity to be explored and celebrated.39

In the UK, councils have increasingly relied on cultural events (and enhanced services) to attract new or repeat footfall into their facilities. Locations such as Westfield (East and West London), Meadowhall, Bluewater, Trinity Leeds, have all proactively promoted a diverse range of events, activities and

participatory opportunities to more directly engage with shoppers and to provide them with experiences and a reason to revisit physical stores which otherwise would seem increasingly irrelevant in the face of home delivery and free returns.40

Engaging in local arts and cultural activities is valuable in fostering a sense of collective identity, space for interaction and shared experience and thus contributes towards people having a stronger attachment to place.41
Barnsley MBC state in The Glass Works case study interview, as presented in Section 6.6.1, culture has driven transformational change in the town centre, and the regular arts and events schedule has ensured the large capital investment in a new shopping centre, library and public realm is successful in the long run. Town centre footfall is up 30% from 2019 (2022). Three cultural meanwhile spaces in formerly- vacant units had 33,000 visits in the first 12 months of operation.

High street footfall

Cultural offer in high street setting can encourage increased demand for a town centre by local people, driving an increase in the number of visitors to the area. A cultural offer on the high street, whether temporary like an event, or more regular like cultural cluster of shops and entertainment spaces, acts as a supplier or facilitator of culture, attracting consumers to the area where the cultural is offered. Culture can support the changing of perceptions of a place and in turn encourage more local people to use town centres for their basic or social needs. Below is a list of key evidence on how culture drives increase footfall:

• • • • •

40 41

Coventry city centre saw improvements in public perceptions from the UK City of Culture 2021 programme - 57% of survey respondents their perception of Coventry had improved through attending.42

Vauxhall One16 created Summer Screen, a programme of free open-air screenings in an underused open space, which attracted over 7,000 visitors in its first year – a sharp increase in footfall.43

See No Evil, a street art project in Bristol, turned a derelict thoroughfare into a tourist attraction, with footfall increased by 75%.44

32% of the footfall to Derby city centre is to visit a cultural institution, such as Derby QUAD, or to attend a cultural event.45

In Stoke-on-Trent, the annual high street art festival the annual “Big Feast” attracted 15,495 participants and increased footfall to anley’s high street (in Stoke-on-Trent) by 20% above the typical weekend average.46

• In relation to The Glass Works case study interview, see Section 6.6.1, town centre footfall is up 30% from 2019 (2022) following the redevelopment. Town centre arts and events programme has increased town centre footfall by 20%-50% during the event (when compared to 2019). Former vacant units that were redeveloped as meanwhile cultural units had 33,000 visits in the first 12 months of operation.

Tourism – visitor numbers and spending

Cultural developments and the culture sector is a key driver for tourism. In the WMCA area, 1 in 5 visitors are coming for a cultural reason. Culture attracts people from outside the area who would not usually visit which increases the supply of revenue to the local economy through spending on local events, hospitality, and accommodation. This generates multiplier effects across the economy. A summary of key evidence is listed below:

Based on average spend by each visitor to WMCA, it implies that a total of £2.3 billion of visitor expenditure is attributable to cultural tourism in the region.47

Culture was the primary purpose of visits for over one in five visitors to the WMCA area (21%), with visitors coming for other reasons also undertaking cultural activities when they visit. It is estimated that around 28 million visits to the WMCA area in 2019 were attributable to culture.48

Four out of five visitors say 'culture' or 'heritage' is their main reason for coming to London.49

In 2013, a third of the overall contribution of the tourism sector in London came from cultural tourism.50

London welcomed 31.9 million visitors in 2017. Top visitor attractions included heritage buildings, theatres, museums, galleries and music. Cultural tourists spending over £7bn a year and supporting 80,000 jobs. A survey of international visitors to London showed 54 per cent visited a pub during their stay here, underlining their cultural importance.51

In Titanic Belfast Museum’s first 3 years of operation (2012-15), it has generated almost £105 million in additional tourism spend for Northern Ireland’s economy and sustaining 893 jobs each year. 2.5 million visitors have attended which has increased positive perceptions of the place from residents and visitors.52.

The city of Belfast has benefited by approximately £14 million from visitors from the rest of NI coming to Titanic Belfast. Visitor data shows approximately one in thirty people visiting the island of Ireland visited Titanic Belfast Museum.

92% of visitors to Lincoln’s reat Magna Carta weekend say that the festival inspired them to return to the city, with 18% of visitors to the festival spending over £100 on retail and hospitality in the city.54

Vacancy rates

Cultural inclusion in developments, high streets and wider placemaking can drive increased footfall and subsequently increased spend in a place. This can encourage the uptake of vacant units through evidencing demand and attracting footfall dependent businesses (such as retail, hospitality, leisure).

See No Evil, a street art project in Bristol, turned a derelict thoroughfare into a tourist attraction which increased enquires about vacant premises by 70%.55
In The Glass Works case study, see Section 6.6.1, the shopping centre is operating at 88% capacity, compared to 81% national average. The 3 vacant units occupied by the council and turned into meanwhile cultural units offer arts, digital and community offers, were all occupied after a 12-month residency.

Safeguard and create jobs

Including culture in developments and supporting cultural events on high streets and in town centres can attract increased number of visitors and local spend. This can increase the number of direct jobs and in the longer term, sustained increased in visitors and residents can increase the money in the local economy which in turn increases the income of local businesses and demand for new businesses.

In declining high streets and town centres, cultural events and services can provide much needed support to local businesses by encouraging visitors who might not necessarily attend. Current employment measures often under-report the number of jobs in the creative and cultural sector due to the freelance nature of sector, hence their sectoral size and multiplier effects are likely to be larger than is currently reported. A summary of key evidence relating to safeguarding and creating jobs is referenced below:

Every direct job in the WMCA cultural sector supports a further 0.78 of a job in the wider economy. This is a higher multiplier than sectors such as retail, law and accounting.56

According to Metro Dynamics, arts and culture has an estimated employment multiplier of 2.77; for every job supported by the sector, an additional 1.77 jobs are supported in the wider economy through indirect and induced multiplier impacts.57

London’s creative economy is a significant employer, accounting for 1 in 6 jobs in London. Between 2011 and 2017 employment in London’s creative industries increased by almost a third (31.8 per cent) compared to 20.8 per cent growth for the economy as a whole. For every full time equivalent (FTE)58 job

In the creative industries, a further 0.75 FT jobs is created within the supporting supply chain. London’s cultural infrastructure supports a total of 203,250 jobs along the various supply chains.59

Each creative job generates at least 1.9 non-tradable jobs between 1998 and 2018.60
Artists source some of their supplies from local shops.61
A problem across the sector, and not specific to the WMCA area is the difficulty in capturing the number and value of freelance activity in the sector.62 BRES is well-known for vastly underestimating freelance, self-employed and/or atypical workers who make up a large proportion of the workforce in many creative and cultural subsectors (and as high as 70% in live and performing arts).63

GVA and wider economic development

•

The culture sector has multiplier effects and its high interdependence with other sectors in the economy means there are significant wider impacts on the local economy when the cultural sector is supported. This interdependence does also come with disbenefits, and some cohorts or economic actors can be disproportionately negatively impacted i.e. local councils from crime or local residents living near a festival event. However, the literature body of evidence supports the notion that there are large net positive impacts on the economy by the supporting of the cultural sector. Key evidence from the literature review is listed below:

The role culture plays in local places should be thought of as an ‘ecosystem’, where cultural investment is likely to have an impact on local areas through clustering effects offering benefits of shared infrastructure, knowledge spill-overs and innovation, driving a cycle of more jobs and further enterprise.64

Arts and culture events can leverage additional funding and investment. £172.6 million investment was been secured through Coventry being awarded UK City of Culture.65

• The eart of the Southwest Local nterprise artnership views the arts and culture sector’s multiplier effect as increasingly measurable: according to their report, for every £1 of salary paid in the sector, an additional £2.01 is generated in the wider economy. The same report finds the sector’s A multiplier to be 2.43, for every £1 of arts and culture spending, £1.43 is produced through indirect and induced impacts.66

In London, cultural tourists spend £7.3 billion a year, generating £3.2 billion for our economy and supporting 80,000 jobs in the capital. Four out of five visitors say 'culture' or 'heritage' is their main reason for coming to London.67
International house in Lambeth, London, a five year ‘meantime’ use scheme focused on providing affordable space for creative and cultural workers, contributes around £16 million GVA to the local economy and generates more than £2.7 million in social value outputs each year, including £800,000 in rent forgone to civil society.68
It has been estimated that the sector generates £3 of income (including earned income, income from investments, grants from charities and foundations, and donations, etc) for each £1 of public sector grant.69
Based on average spend by each visitor to WMCA area, it implies that a total of £2.3 billion of visitor expenditure is attributable to cultural tourism in the region.70
Ortus Economics undertook a cost benefit analysis of the night-time economy in Hackney, London in 2015 and found showed that for every £1 of cost born by the public purse it receives £3.97 in revenues. Thus, the Evening and Night time economy (ENTE) generated a return of four times the costs incurred. Total revenues for Hackney are estimated at £93m and the costs £24m for 2015.71

Residential and commercial development value increases

The local economy GVA benefits of growing the culture sector can lead to increased land and rental values for a development and the surrounding area. Similarly, growing the cultural sector in a space and the culture offer more broadly can improve public perceptions of an area. This makes the area attractive for developers and may increase new housing provision in the area. Key evidence source in relation to this benefit is listed below:

•

Taking outperformance over and above the area benchmark as an indication of value created by the presence of creative workspace. In London, the value-add metric is 4.4% per annum (measured over 10 years) and in the Thames Estuary, it is 3.3% per annum (as a more emergent market, this was measured over 5 years). This outperformance is not smooth or consistent over time or place, and there are many factors at play, nevertheless, for these clusters, there was an association with the presence of creative workspace and outperformance (in residential price terms).72

In Margate comparing values in 2010 and 2017 shows a growing incidence of higher residential values alongside creative space.73
Middleport Pottery, Burslem 2016 survey found 83% of the local community said the project made the area a better place to live and work or visit, 80% of community felt an increase in pride in the local area.74
Creative and sensitive place-making can help to improve a place from both resident and visitor perspectives, especially when it is part of a wider culture-led regeneration and urban design scheme such as Birmingham’s Centenary Square.75
A strong arts and cultural offer can support efforts to maintain or enhance the attractiveness of retail centres as places to live, work and visit by offering unique experiences for visitors and/or shoppers through the animation of public spaces including art works, live performances and opportunities for local cultural identity to be explored and celebrated.76

6.4 Benefits evidence: Cultural sector development

•

• •

77 78

The cultural sector can be viewed as highly interdependent with other sectors but also has tendencies to cluster and network. Increasing the inclusion of cultural organisations and services in developments can support the sector to develop and grow organically, generating multiplier effects and clustering which can catalyse sectoral innovation, growth and productivity. Key evidence in relation to this benefit is listed below:

The GVA multiplier for the West Midlands is 1.94 and aggregate employment multiplier 2.13. Arts and culture organisations benefit significantly from creative clusters and partnerships. 28% of organisations are in partnership with another create business and 23% are part of a creative cluster. Average labour productivity per FTE worker stands at £69,000 for the arts and culture industry as a whole, but large variations within exist.77

In Thanet (Margate), 2008-2013, a 32 per cent growth in the number of businesses working in arts, culture, and the creative industries and a 71 per cent increase in the number of artists’ studios.78

Being in close proximity to fellow artists has social value and can be a source of inspiration and artistic drive for the artists’ own practice.79

• Please refer to the case studies for Upper Trinity Street (Section 5.3.2) and Grand Union (Section 5.3.1) which provides anticipated cultural sector development benefits such as clustering.

6.5 Benefits evidence: Wellbeing and social benefits

Culture generates a number of wellbeing and social benefits which may not always be tangible or have a market value (see 6.2.1). Culture provides hubs for people to go to, interact with each other and cultural ideas, access educational opportunities and learn about important topics. Many of these spaces and participatory programming are open to all and can enable people who would otherwise be excluded to enter into the life of the community.80 It increases the sense of place, community and civic pride. These in turn lead to reduced social isolation and loneliness and increased life satisfaction which contribute to overall wellbeing and benefits for public services such health, education, social care and justice. Arts and culture sector can provide health services with additional treatment opportunities through social prescribing.

vidence of culture’s wellbeing and social benefits are outlined below:

Public health improvements

Data from the UK’s largest longitudinal household survey, Understanding Society, suggests that increased engagement in arts events, historical sites, and museums is associated with higher life satisfaction.81
Accounting for a range of factors that influence life satisfaction, people attending a wider range of arts and cultural events are more satisfied with their lives than people who don’t.82
The “arts-on-prescription” project has shown a 37% decrease in consultation rates and a 27% reduction in hospital admissions. This represents an NHS saving of £216 per patient.83
Having a studio space supports artists’ well-being. The studio provides an intimate space for artists to process events in their lives and to (re)discover themselves. Many artists spoke of the financial insecurity and precarity they faced, with the studio providing a crucial source of psychological stability.84

Education – improves educational attainment and offer of children and deprived groups

• •

83 84

85 86

Participation in structured arts activities can increase cognitive abilities by 17%. Learning through arts and culture can improve attainment in Maths & English. Learning through arts and culture develops skills and behaviour that lead children to do better in school.85

Students from low-income families who take part in arts activities at school are three times more likely to get a degree.86

Culture plays a key role in inspiring people to consider creative training pathways.87
In Oxford, Arts at the Old Fire Station’ provides professional development of local artists through advice, subsidy, networks and promotion. Within the same venue, homeless people can take part in work experience and training and receive free tickets to performances.88

Incidence of crime and youth offending – increased community interactions, opportunities to support rehabilitation process

•

6.6

Arts programmes can support ‘dynamic security’ in prison contexts, fostering positive relationships between prison staff and prisoners, helping to support ‘generative’ rather than ‘adversarial’ interactions between the two. Creative interventions can help to facilitate relationship building between staff and young people, breaking down barriers and developing trust between participants. Art initiatives can have better success than more traditional methods at enabling those in prison-offenders and staff to share their thoughts and experiences, thus offering both sides the opportunity to build greater understanding of the other’s perspectives and personal challenges.89

Young offenders who take part in arts activities are 18% less likely to re-offend.90

Case studies

6.6.1 The Glass Works, Barnsley,

What is the cultural offer and how was it delivered?

The Glass Works is a £220 million two phase town centre regeneration scheme led by, Barnsley Metropolitan Borough Council (MBC). The scheme included a new library in Phase 1 (2019) and a redeveloped shopping centre, public realm and public arts and events programmes in Phase 2 (2021). Barnsley MBC also dedicated 3 vacant shops in the shopping centre as a showcase for the Borough’s cultural

offer – a museum, gallery and digital space. The council has invested heavily in an extensive arts and culture events programme to complement the regeneration scheme as a key way to attract new audiences alongside the wider retail, leisure and food & beverage offer.

Who was involved?

The council acted as the primary developer for The Glass Works, after several private sector bids were unsuccessful due to austerity. The arts and culture team worked closely with local community groups including local councillors in the creation of the new cultural spaces. They worked closely with interdisciplinary teams in the council such as, economic regeneration, library services, planning, , and finance, to support the business case development for the town centre redevelopment, ensuring a strong cultural offer was at the heart of the plans. Barnsley MBC is part of the South Yorkshire Mayoral Combined Authority and has worked closely with them to access additional funding. For example, Barnsley received £1.7 million from SYMCA Getting Building Fund to deliver public realm improvements. The council also worked closely with Arts Council England and Historic England and has accessed national government funding. For example, £10 million of Levelling Up Funding and UK Shared Prosperity Funding for arts and cultural events programmes, and investment for Eldon Street in the town centre as a Heritage Action Zone. Barnsley is a Priority Place for Arts Council England, and a Levelling Up for Culture Place.

Rationale for inclusion of culture - How did you make the case?

Over 10-15 years, Barnsley's culture and arts team have evidenced the impact of arts and culture investment on the local economy. The previous library was closed in 2014 and the site was developed as a new Sixth Form College. The library went into temporary facilities, on the edge of the town centre. The council supported the view that a new library in the heart of the town centre would be a more accessible and economically beneficial home.

The library, culture and economics team used strong robust evidence of previous cultural projects which supported the business case that the library would drive footfall and spend into the declining town centre and support the early evening economy. Its wider economic value would only be materialised if it was placed in the heart of the town centre and near transport links.

The library offer was designed from the start to be more than simply a traditional library, it was developed to be a central driver of town centre regeneration. For example, the library was designed without a café or restaurant but rather supported private sector businesses to thrive, with a restaurant next door. It would host events in the evening to support the early evening economy. Similarly, the library would support cultural activities and events in the town centre, including a monthly events and arts events schedule, all to drive footfall and local spend in the town centre. The team successfully argued that inclusion of culture complemented Barnsley MBC’s corporate plan and SYMCA’s Strategic economic plan objectives to regenerate and repurpose the town centre for the 21st century. The Council’s approach reinforced the importance of the role of culture in the regeneration of town centres, and the changing expectations of the public who are seeking an experience that is broader than simply retail when visiting them.

Actual or Anticipated benefits

Barnsley town centre footfall at the end of 2022 was up 30% from 2019.
The Glass Works shopping centre in 2022 was operating at 88% capacity (UK average 81%1).
20-50% increase in visits to town centre events programmes. For example, 1.7 million visits to Dancing Town in August 2021, up from 930,000 in 2019.

• 33,000 visits to cultural vacant units in 12 months, all 3 cultural vacant units have now been let.

• More young people and families accessing and using the town centre.

• Improved public perceptions of the town centre and the council.

Best Council Events Team at the National Outdoor Events Association awards 2022.
Land value uplift around library, shopping centre and the town centre area.
•
Increased local spend in retail and hospitality units near the library.
Success of the events and cultural programmes has allowed Barnsley MBC to apply for national portfolio funding

Challenges

from Arts Council England. This will enable regular funding for the library and arts and events programmes.

• Made the case for the redevelopment of branch libraries in other local centres in Barnsley MBC area.

• Arts and culture service is perceived to be more resilient against future service cuts due to demonstrating wider value.

The council found it initially challenging to get public confidence that the redevelopment of the library would take place.
The arts and culture team worked hard to ascertain corporate buy-in which required frequent evidencing value and strategic alignment.
Lack of private sector involvement and appetite to engage with the town centre development.
Meanwhile cultural units were very successful, creating significant retail and public sector interest in units but strong public partner opinion that at least one should have remained on permanent basis

Future learnings - Key success factors

Having an elevator pitch ready
Robust evidence on the value and impact

of previous arts and culture.
Regular events programmes (one off large capital investment is not enough).
Alignment to local and regional strategic priorities i.e. town centre regeneration.

• Local council access to large funding options and reserves – including revenue funding.

• Community and local councillors’ engagement and championing investment.

We would like to thank Barnsley MBC for offering their time to the research and for providing supporting data and evidence. For further information, please contact Lynn Dunnings at LynnDunning@barnsley.gov.uk

6.6.2 Former M&S Building, Bristol Sparks, Bristol

What is the cultural offer?

The former Marks and Spencer’s (M&S) building closed its door in January 2022, after 72 years in operation in the heart of Bristol City Centre. It was agreed a new meanwhile arts and sustainability hub will open in the store mid-2023, led by educational charity Global Goals Centre (GGC) and creative space property developer and charity, Artspace Lifespace.

Local artists are helping with the redesign to create an arts and sustainability ‘shopping centre’. The team are using the department store’s traditional sectioned layout to present different cultural, environmental and communities offers such as; zero-waste area, local community group meeting spaces, sustainable retail units, affordable artist studios and rehearsal zones. The third floor will be a private studio space for Invisible Circus. The aim is to create a meanwhile cultural and community hub to test out the commercial viability of different cultural and community uses. Once viable, they can relocate to a permanent unit within the city centre.

Who was involved?

The Global Goals Centre (GGC), a socio-environmental educational charity was looking for a new home and had been approaching different agents and properties in Bristol. They had struggled to find a suitable premise due to their size and short-term income sources. The GGC worked closely with Bristol City Council (BCC), the local mayor, Invisible Circus and Artspace Lifespace to present the offer to the owner of the building. Artspace Lifespace, a charitable sector developer who specialise in taking over under-utilised and difficult to let commercial premises, led on the commercial and legal side of the lease and played a key role in securing the tenancy. GGC and Artspace Lifespace will develop the building, with non-financial support from BCC. The project is also working University West England (UWE) and Futureground on evaluation and rolling out the model widely. The site space will be used by a number of different culture organisations.

Rationale for inclusion of culture - How did they make the case?

All parties including, the council, the building owner and the developers, were keen to repurpose the building and not have it remain vacant for a long time. There was concern amongst stakeholders, the large department store would remain vacant for a long period of time due to its size. The local significance of the store, which had been occupied for the last 72 years by M&S, encouraged local councillors, community groups and BCC to be more proactive in its repurposing.

It is suggested there is also a shortage of affordable workspaces in Bristol for charity, community, and arts sector. Often, they cannot secure a permanent home due to their irregular income streams. The GCC and Artspace Lifespace made the case the building would support the local community and the economy by providing much needed affordable spaces, as well as drive footfall into the town centre, promoting regeneration and offer a large vacant unit in a priority regeneration area. It is hoped that this provides a blueprint for rolling out culture in any new development. There are also likely to be strong networking benefits from many cultural organisations working together in the same space.

Culture will also be used to promote the UN Sustainability Goals. Sustainability and complex environmental issues have traditionally been difficult to communicate. Artists have a talent for communication, and it is hoped that brining multiple organisations into space and presenting the information in a creative, new way will help communicate to the general public.

Anticipated benefits

Act as a tool for town centre regeneration and reduce vacancy rates in the city centre
Encourage demand for local units and increase residual high street stock value
Support networking and clustering of cultural and creative businesses in Bristol
Incubate and road test potential cultural, creative and community uses before going to market (increase survival rates)

Challenges and potential disbenefits

• Support environmental education and communication to local people

• Increase dwell time and movement in the local area

• Promote safety and civic pride through occupy vacant units in the city centre

Challenges and potential disbenefits

• Support environmental education and communication to local people

• Increase dwell time and movement in the local area

• Promote safety and civic pride through occupy vacant units in the city centre

Temporary nature of funding and support v.s. desire of the sector for permanent use
Many different organisations crowd funding and involved but lease risk sits with one

organisation
Limited resource and knowledge on how occupiers can quantify their economic and social value
Meanwhile or temporary nature of lease provides issue around accessing future funding and

grants
Community can become reliant on a temporary offer and this could impact long term benefits and decrease public satisfaction

6.8 Theory of change and Conclusion

The M overnment Magenta Book for evaluation best practice states that “ ood policy-making necessitates a thorough understanding of the intervention and how it is expected to achieve the expected outcomes.” A Theory of Change is a tool to map this. Theories of Change set out the rationale for change (why change is needed), the interventions (or outputs) and the inputs required to deliver them, and then logically shows that change that occurs to lead to the ultimate impacts.

The Theory of Change summarises the findings of the research and demonstrates the logic chain, rationale and many benefits to the public sector of including of culture in development.

Figure 12 illustrates the high-level Theory of Change for the inclusion of culture in development, from the perspective of the public sector. This has been informed by the case studies and literature review.

The Theory of Change summarises the findings of the research and demonstrates the logic chain, rationale and many benefits to the public sector of including of culture in development.

6.9 How to make the case

6.9.1 Key sources

The following section provides a list of resources which may help the public sector make the case for culture’s inclusion in development and quantify its’ benefits to society. The Strategic Case and conomic Case are two of the five cases in a typical public sector business case. The other cases are the Commercial Case, Financial Case and Management Case which put forward the commercial deal, the affordability and funding proposition, and ensure that the project is deliverable. We have focussed on guidance for the Strategic Case and Economic Case because this is where the main arguments in favour of the intervention are put forward. It is important to develop a robust strategic and economic case to ensure any application to funding is sound. When applying to UK Govt funding, such as, Levelling Up Fund, a HMT Green book compliant business case is required.

6.9.2 Making the Strategic Case:

The Strategic Case sets out the context, policy and strategy landscape, and case for change for an intervention or project. It includes the following:

Demonstrate alignment to policy and strategy
Identify and engage key stakeholders
Gather evidence of and present a Case for Change (Issues, opportunities, strategic objectives)
Develop strategic objectives and project scope
Develop options
Identify benefits
Develop a Theory of Change (https://townsfund.org.uk/resources- collection/gtd46ghwmv37mdjvr421iyyzqor7uz)
Identify Risks, Issues, Constraints and Dependencies
See Guide to developing the Project Business Case (publishing.service.gov.uk) and

https://townsfund.org.uk/resources-collection/strategic-case-good-practice for further guidance.

6.9.3 Making the Economic Case:

The Economic Case determines the Value for Money of an intervention or project, comparing the total costs and benefits to UK society (including non-financial costs and benefits), as well as factoring in how costs and benefits are distributed in society and non-quantified benefits and dis-benefits. Public sector business cases should use HMT Green Book guidance and supplementary guidance to value costs and benefits to society for an Economic Case. However, other methods of quantifying benefits and impact can be employed where useful, for instance when communicating with the public or key stakeholders, or for monitoring and managing benefits realisation and conducting evaluation. Therefore, links to both HMT Green Book compliant guidance and other guidance have been provided below.

Guidance on quantifying benefits (Non-HMT Green Book):

Table provides a summary list of guidance on quantifying benefits of culture sector that are not HMT Green book compliant. These are useful for articulating more granular benefits to key stakeholders, for managing the delivery of benefits on projects, and for monitoring and evaluation.