_Peter _Gill, playwright and theatre director
Consultation document
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Dear Colleague

1. For the past year we have been conducting a review of the Department's activities as part of the Government's Comprehensive Spending Review(CSR). The results of the CSR across Whitehall have been announced in the Treasury's White Paper Cmnd 4011. That document concentrated on bottom line figures for public expenditure over the next three years. It did not look in detail at individual departments' contributions to the CSR, although our own press notice issued at the same time identified our headline changes and reforms.

2. We undertook the CSR last year to inform public expenditure decisions for this Parliament and beyond and to look from first principles at everything we do. This coincided with the fifth anniversary of the founding of the Department, a good moment for reflection and to set a new course. This letter considers my general conclusions from the review. There are many specific proposals for change on which we are seeking views and which are the subject of the separate sections attached below. All papers are also available on the Department's web site http://www.culture.gov.uk/

3. Our principal conclusion has been that all the areas for which DCMS is responsible are important and that continuing public subsidy for sport, tourism and the cultural sectors is justified by the impact which they have on the lives of individuals and the well-being of the nation. Of course there are areas in which money could be spent more efficiently or effectively, targeting the available support more directly on achieving our objectives without adding to the administrative costs. Means of tackling these issues are addressed in the sectoral papers.

4. The Department is responsible for a broad range of bodies and the historic relationships with them originated in a number of Government departments. It is an inherited "landscape of quangos" which has grown up over the years in sometimes haphazard fashion and which does not necessarily deliver the best impact on the ground. Each of these bodies represents a specific constituency and is largely self-contained. Inevitably, perhaps, there has been no real consistency in the way we relate to them. For some the relationship has been a steady extension of the "arm's length principle"; for others — in particular tourism — it has been one of industry sponsorship. But, consistently, expenditure and expenditure decisions are largely in the hands of bodies outside the Department. In many areas, this has resulted in little strategic direction from the centre and only limited knowledge of how public money has delivered Government objectives. This limits the flexibility with which money can be spent and leaves us with only a partial view of the sectors for which we are responsible.

5. We are convinced that the arm's length principle remains valid but the arm has different lengths, and is sometimes too long. It has become a substitute for the strategic leadership which only a Department of State can provide. That role means we must develop a wider understanding of how the sectors work — to become an informed customer. It also means being able to take forward Government objectives for and with those sectors, and, when necessary, taking action ourselves. We need to be clear that public money is being spent to deliver public objectives and within a strategic framework in which our bodies can operate and continue properly to be responsible for detailed spending decisions.

6. Our review went beyond the direct activities of the Department and our sponsored bodies. There is a complex system of funding and support across many of our sectors, in particular through local authorities. Our proposals for taking a broader view, and in particular for increased delegation to the regions, are intended to improve the way central and local government work together, and to ensure that local needs are met.

7. We also believe that there is a role for the Department looking beyond subsidy, in encouraging links between publicly supported and privately financed initiatives, and in promoting the wider sectors. We have started over the past year to take this broader view: working with developed industries in the case of film and tourism; and, in the arts, encouraging the break down of barriers between subsidised, commercial and voluntary activity.

8. Our starting point for the review was to establish new objectives, linking the Department to the Government's overall policy agenda. A copy of the full list is attached, but at its simplest, the future direction of the Department lies in four central themes:

* the promotion of access for the many not just the few

* the pursuit of excellence and innovation

* the nurturing of educational opportunity; and

* the fostering of the creative industries.

9. These objectives are relevant to all our areas of responsibility and recognise the strong links between them. For example there is a vital relationship between tourism, the arts and built heritage; there are close links between broadcasting, sport and the arts; and between the National Lottery and everything we do. All these links reinforce the importance of DCMS as a single unit looking after the interests of what may at first appear a fragmented group of industries and activities.

10.All the areas for which we are responsible have a role in delivering the Government's wider social, educational and economic objectives. Much good work has been and continues to be done, particularly in education. But we have found no unifying strategy behind that work, and large areas of DCMS sectors where there was little recognition of that wider agenda. The Department must take action to redress this.

11. Having set the objectives, we therefore intend to:

* develop new policies and spending programmes to deliver those objectives which focus on real outputs and benefits to the consumer;

* work with all our sectoral bodies to develop tangible indicators of performance linked to our key policy aims;

* streamline the way we deliver our policies and programmes to ensure value for money whilst maintaining proper accountability;

* raise standards of efficiency and financial management in all our bodies; and

* reform what will remain a small department to enable it to do its job efficiently and effectively.

12. That is what we mean by strategic leadership. We will expect the bodies we support to give similar leadership within their sectors.

13. In order to deliver this strategic leadership, we are proposing some major structural changes. These are fundamental to the success of my proposals, but they are not an end in themselves. They will provide for streamlined, efficient delivery mechanisms, which are properly accountable and which can ensure that public money is spent appropriately in pursuit of key public policy objectives and in line with the Government's wish to see modernisation and investment for the reform. They will devolve decision making processes as close to the final user as possible, and they will speed the process of looking at all forms of support in the round.

14. We are therefore proposing an increased emphasis on regional bodies. The existing regional forums have been very successful. We are now seeking views on the benefits of, additionally, creating more formal groupings in each region. Greater devolution would give these bodies considerably more resources to distribute, both grant-in-aid and National Lottery. This is the subject of a separate paper.

15. If the Department and its sponsored bodies are to take a greater interest right across our sectors then the use of public money needs to be looked at in the context of a much broader cultural economy. The changes introduced this year through the National Lottery Act require distributors to produce strategies for Lottery expenditure. We would expect grant-in-aid distribution to be subject to similar disciplines, with strategies for Lottery and grant-in-aid within and between sectors, taking account of each other so as to make the best use of public money.

16. The growing importance of local authority cultural strategies will play an important part here. There has always been a significant relationship between central and local government funding. Our policy of encouraging lottery support for people and activities as well as buildings makes close co-operation and sharing of information vital for the effective development of cultural activities, the creative industries, sport and the connections and exploitation of all these things with and through tourism.

17. We are clear as a result of the review that the department currently funds too many bodies, some of them with similar roles and responsibility This leads to confusion and the risk — if not the fact — of duplication. We are therefore proposing new streamlined structures in the arts, in film and, recognising how much more could be achieved if these sectors worked more closely together, in museums and libraries. Each of these bodies will have a broad funding and advisory role and will be capable of understanding and commanding the respect of the whole of the relevant field. We are also proposing to streamline the public body structure in the built heritage, tourism and sport. Each of these areas is the subject of a separate paper describing the changes we propose and seeking views in each case.

18. One area in which we are not proposing change is broadcasting. The review did, however, recognise the enormous importance of broadcast media for ensuring the widest possible access to the cultural sectors. Within the new structures we shall encourage the exploration of far more close and co-operative working with the broadcasters. Meanwhile the Government as a whole has just issued a Green Paper on the future regulation of the wider communications sector.

19. We are confident that these changes will help to ensure the most effective delivery of our policies on the ground with the minimum spent on administration. However, we also want to ensure proper accountability and value for money. We have therefore decided to establish a tough new watchdog to monitor and improve standards of efficiency and financial management and promote quality across all our areas of responsibility. The new arrangements will also help ensure that our objectives are being met and that Government investment is directed towards modernisation and reform. An early priority for the team will be to provide good practice guidance on commercial activity, to help sectors and institutions make more of the commercial possibilities of their collections and activities.

20. Although we propose to consult separately on the extent and nature of the watchdog's remit, our initial thinking is that it would have a role in relation to bodies in direct receipt of grant-in-aid, and second-tier funded bodies. It would review and report to us on performance in achieving standards set, meeting aims and objectives and efficiency targets. It would also be able to disseminate good practice and provide expertise to help maximise commercial opportunities. We hope that the new watchdog will be able to start its work from April 1999.

21. Alongside these developments we want to establish clearer lines of accountability between the Department and our sponsored bodies by improved planning arrangements, building on the new public expenditure structure announced by the Chancellor on 11 June. We shall introduce three year funding settlements for the majority of our sponsored bodies. Funding agreements will place a clear responsibility on bodies in return for our investment, to deliver improvements in efficiency, access and private sector sponsorship, through tangible output and outcome based targets.

22. These proposals will allow us to redirect the Department's own resources in order to put more effort into policy development and strategic leadership, while improving day to day management of NDPBs.

23. Alongside grant-in-aid funding, the Government intends to maintain after 2001 the percentage share of Lottery funding for arts, heritage, sport and charities at the 16% in the National Lottery Act 1998. This new certainty about Lottery income will provide a clear financial framework within which ACE, ESC, NHMF and NLCB can develop the new strategic plan for Lottery funding required by the 1998 Act, embodying a new clarity about the way Lottery money will work in parallel with grant-in-aid so as to make the best use of the total public resources available.

24. Our approach in future will be built upon:

* a more rational and streamlined approach to service delivery, with an appropriate level of devolution to regional and local level;

* strategic leadership based on a longer term view which will allow better prioritisation of resources and the ability to test performance against agreed outcomes;

* a more integrated approach bringing together the commercial, subsidised and voluntary sectors, and in which planning takes account of funding from all sources;

* a recognition that the cultural sectors have a fundamental importance for the quality of life but also a vital economic relevance;

* strengthened accountability through a new contractural relationship and the establishment of the new watchdog.

25. We would welcome views on all the proposals set out in these papers by Friday 2 October except for those on tourism for which responses should be received by Friday 18 September.

CHRIS SMITH

Comments should be sent to the Strategy Unit, DCMS 2-4 Cockspur Street,

London SW1P 5DH

Email address: csrconsult@culture.gov.uk

- To improve the quality of life for all through cultural and sporting activities, and to strengthen the creative industries.

The Department will: work to bring quality and excellence in the fields of culture, media and sport; make these available to the many, not just the few; raise standards of cultural education and training; and help to develop the jobs of the future in the creative industries.

The Department in partnership with others, works to:

- create an efficient and competitive market by removing obstacles to growth and unnecessary regulation so as to promote Britain's success in the fields of culture, media, sport and tourism at home and abroad;

- broaden access to a rich and varied cultural and sporting life;

- ensure that everyone has the opportunity to achieve excellence in the areas of culture, media and sport and to develop talent, innovation and good design;

- maintain public support for the National Lottery and ensure that the objective of the Lottery Fund supports DCMS' and other national priorities; and

- promote the role of the Department's sectors in urban and rural regeneration and in combatting social exclusion.

In carrying out these objectives the Department will:

- seek maximum value for money in using our human and financial resources, through applying the principles of efficiency among and effectiveness in its sectors and in encouraging partnership with others.

1. This looks at the current delivery of DCMS money and objectives in the English regions and, in the light of the overall conclusions of the DSR, consults on some ideas for change.

2. These will cut across a huge range of interests, reflecting the diversity of cultural and economic interests in the regional scene. We welcome views from all quarters.

3. At present the subsidised (or supported) areas of the Department's work are represented in the regions by a range of structures: Regional Arts Boards (RABs), Area Museums Councils (AMCs), Regional Tourist Boards (RTBs), and regional offices of English Heritage and the English Sports Council. There is a well organised but voluntary regional library structure.

4. There is also a Regional Cultural Forum in each region. This is an informal grouping of regional bodies. It is not itself an executive body, but a focus for discussion.

5. The Cultural Forums have encouraged regional bodies to exchange information and ideas, but there is no cohesive structure for planning or for delivering DCMS services at regional level. This largely reflects the situation at national level, although it is worth noting that the Regional Arts Boards act in each region not only for the Arts Council but for the Crafts Council and the BFI as well.

6. In contrast, local authorities, with whom these regional bodies all deal regularly, have moved towards more integrated structures for the delivery of cultural, leisure and tourism services. These authorities now have to deal with a number of regional bodies, and in many cases with national bodies as well.

7. The key objective is to provide a coherent and effective voice for theDepartment's cultural and economic sectors, including the unsubsidised, creative industries, which properly reflects the strength of regional identity and their role in reinforcing and focusing regional pride. In contrast, the importance of the regions under the Government's new constitutional agenda, and the recognition of the economic importance of DCMS sectors, highlight the fragmented nature of the administration of DCMS sectors in the regions, and the fact that many relatively minor decisions, affecting both Lottery and grant-in-aid are still taken at national level. The work of the cultural agencies in the regional context is overlapping and complementary. They already share the cultural objectives of promoting access, pursuing excellence and innovation, nurturing educational opportunity and fostering the creative industries. Increasingly they also share a desire to maximise the contribution of the sector to broader social objectives such as tackling social exclusion, cutting crime and improving health. Yet as small and fragmented bodies they are often constrained from turning these shared objectives into joint practical action. The ideas offered in this paper are intended to address both issues.

8. In line with the DSR's overall conclusion that DCMS sectors and their funding streams should not be looked at in isolation, we believe that it makes sense to bring their regional representatives together into more powerful "cultural" groupings in each region. The expectation is that these new bodies would in time exercise executive functions for grant-in-aid and lottery money and might be — for the cultural field — the equivalent of Regional Development Agencies, working alongside RDAs and Regional Chambers.

9. The DSR concluded that there should be greater delegation of decision making from national to regional bodies, to ensure that decisions were taken as close to those affected as possible. This will over time involve the distribution of a considerable proportion of grant-in-aid to regional bodies. Changes in Lottery legislation would make it possible for distributors to delegate decision-making — perhaps for grants up to a certain level — to regional bodies. The new one-stop small grants scheme being jointly developed by the Lottery distributors in England will operate on a regional basis.

10. Any new body might act as a strategic planning body for the interests it represented and maintain relationships with the regional funding partners. Such a new structure should enable close working with local authorities, and would mirror national bodies in having a wider role involving the commercial and voluntary players. It would produce a regional strategy and advise the Secretary of State on regional matters. Consistent with the DSR theme of good management and accountability, funding for such regional bodies might be channelled through the national funding bodies, with sufficient flexibility in place to allow the regions to make best use of links between different interests.

11. We have considered a range of models. We would welcome views on these, and ideas for expanding the list.

12. There are strong arguments for including all DCMS sectors in one body. However, we recognise that there are counter arguments, and there will be different views on the make up of a new body. Whatever the conclusion, we believe that it would be desirable to have similar models in each region, allowing for a consistent grouping of interests across the country.

13. Our starting point has been the existing Regional Cultural Forums. We should like to see these strengthened which would ensure continued co-operation and co-ordination. The Forum has the advantage of being able to bring in bodies not supported by DCMS (regional screen commissions, architecture centres, natural heritage bodies, etc.) as well as broadcasters and other Lottery distributors. But, if grant-in-aid and Lottery funding for the regions are to be directed through regional arrangements, then some executive underpinning will also be necessary.

14. We look forward to your views on the make-up of an executive body. It might have at its core the current functions of the Regional Arts Boards, the Area Museums Councils and a regional library function. This would provide coverage of visual and performing arts, crafts, film, museums and libraries. It would build on current relationships and reflect the closer working relationships proposed for the new national bodies.

15. English Heritage have already been moving to strengthen their regional presence. We welcome views on how the new English Heritage regional offices might be associated with any new executive body.

16. There is an issue about the place of sport and tourism alongside the other players in the new grouping. The Regional Tourist Boards represent the most important economic element of DCMS' portfolio and therefore of its regional presence. They will naturally have an important relationship with the RDAs. But we believe they should also maintain strong links with the "cultural" grouping, whether or not as part of an executive body.

17. Sport offers direct economic benefits. It contributes to the regeneration of towns and cities, improving health, productivity and quality of life. It contributes to savings in the cost of health care and leads to a reduction in crime and vandalism. It offers local environmental benefits that can change the image of a city or community and lead to increased inward investment. It therefore has a major role to play under new regional arrangements. The section on Sport seeks views on whether sport's role would best be recognised by including the functions of the English Sports Council's regional offices in any new executive body, or by retaining them outside this framework by strengthening their links with the existing regional sports forums.

18. Once decisions have been taken on a broad overall model, there will be a number of detailed issues to be resolved. We offer only preliminary views on these, at this stage. It would be useful if you could consider them in your response on the overall regional position.

19. Each of the existing regional bodies has a different structure and a number are independent. We believe the new body should be independent, and have its own board.

20. There will be a range of models for appointing a board. We could take the view that to ensure strong lines of accountability, the Secretary of State should have a role in the appointment of members. Alternatively, he could appoint a chairman, and the remainder of the board could be self-appointing. The body would advertise within the region for a broad base of skills and experience. A third way would be for the Secretary of State to specify a proportion of the board members to be nominated by particular interests (eg. local authorities). Under any option, the national bodies could have a role in appointments. For the London body, we believe that the new Mayor of London should appoint its Chairman.

21. As an interim measure, to get the new body started, a proportion of members of the new body might come from each existing body (although not all currently have a board).

22. The nature of the board would also depend on the legal structure of the body. The current DCMS bodies have been established in a number of forms. The new body could be a private company; it could be established by statute; it could be a charitable trust; or could, like the AMCs, be a membership organisation. There are arguments for each.

23. It is clear that any new executive body would need to have a close working relationship with the developing regional structures — local government, chambers and RDAs and with the existing Government Offices for the Regions. From next year, we are providing funds to ensure that DCMS is directly represented in each Government Office. But the detailed nature of the relationships is difficult to predict. The intention would be for the new body to provide a focus for cultural issues for regional partners, encouraging them to engage with the sector in the decision making process. Working with regional, sub-regional and local partners, it would ensure that cultural issues were properly recognised within the existing and emerging policies and strategies for the region. It could provide information on the sector as a whole, as well as advice on particular funding and investment programmes and on the cultural dimension within larger projects. It could also develop a joint approach, in partnership with local government, to the preparation of cultural strategies.

24. Existing bodies do not have congruent boundaries. There would therefore need to be rationalisation in some areas. It would make sense for the boundaries for the new bodies to be the same as for the RDAs.

25. Our ideas for change can only be achieved with co-operation from the bodies concerned and consultation will dictate how we proceed. In particular, we shall need to consider in the light of their views, whether legislation is needed or whether some changes at least can be made administratively.

26. We welcome comment on any aspect of these proposals but particularly on:

i. bringing regional representatives of DCMS sectors into a more powerful grouping and the extent of policy and funding devolution. (Paragraphs 8-10).

ii. The models which might be adopted for groupings. (Paragraphs 11-15).

iii. How to build relationships with bodies/sectors which might be outside the new grouping. (Paragraphs 16-17).

iv. Models for membership and management structure. (Paragraphs 19-23).

v. Relationships with other regional bodies including cultural forums. (Paragraph 23).

vi. Boundary issues. (Paragraph 24).

27. Comments on these proposals should be sent by Friday 2 October to Strategy Unit, DCMS, 204 Cockspur Street, London SW1P 5DH. Extra copies are available from the DCMS Public Enquiry Unit at the same address. Telephone 0171 211 6200. Fax 0171 211 6032

Email address: csrconsult@culture.gov.uk

1. There are over 2,000 museums and galleries in the UK. These include:

i. over 1,000 independent museums;

ii. some 800 local authority museums;

iii. around 300 university museums and collections;

iv. around 200 armed services museums; and

v. 21 national museums and 5 non-national museums directly funded by Government.

2. The Departmental Spending Review considered the role of the national museums and the Government's relationship with them, the adequacy of existing structures for support of the wider museum community, and whether any changes to the current structures are required for the effective delivery of policy objectives for the sector.

Setting new targets:

National museums to increase visitor numbers substantially as entry charges disappear.

3. Museums are about objects and for people. The UK's museums have some of the finest collections in the world. By preserving, exhibiting and interpreting these collections museums enrich the lives of today's visitors and ensure that future generations will also be able to enjoy and learn from them. Museums contribute to four main Government objectives. They:

(i) promote education, notably through support for the National Curriculum, through formal and informal education and by providing opportunities for lifelong learning;

(ii) provide physical and intellectual access to collections which illustrate and illuminate: history; the natural world; the great artistic and scientific achievements of humanity; and contemporary cultures;

(iii) help to tackle social exclusion by encouraging participation in museum activity and reaching across social and economic barriers;

(iv) support economic prosperity by helping to sustain and regenerate communities and by providing information and services for commercial and business users.

4. The Secretary of State's letter covering this paper sets out in general terms the difficulties with the current arrangements governing the relationship between the Department and its various NDPBs and sectors. These include a lack of consistency, a lack of strategic direction from the centre, and only limited knowledge of how public money has delivered Government objectives.

5. In the case of museums and galleries, Ministers recognise that the sector is disparate and fragmented and that a co-ordinated approach to current problems is difficult to achieve using existing structures. The Department's work is, to a very large extent, focused on the small number of national museums and galleries, rather than the wider sector, and its relationship with the national museums and galleries is overly preoccupied with the exercise of administrative and financial controls. The MGC's work, on the other hand, is for the most part focused on the wider sector and does not closely involve the national institutions. There is therefore at present no one body giving strong, strategic leadership for the sector as a whole. There is a lack of clarity about the purposes for which public money is being spent and a lack of information about the impact of spending decisions. Regional structures are not as effective as they might be. Finally, Ministers consider that there is a need for better co-ordination between the museums and other sectors, especially libraries.

6. Ministers wish to create conditions in which museums and galleries throughout the country can properly care for their collections and promote the widest possible access to them both now and in the future. In order to address the difficulties described above the Government invites views on the following proposals:

(i) to explore possible changes to the relationship between DCMS and the national museums and galleries, and other museums directly sponsored by DCMS, so as to improve the efficiency and effectiveness with which those bodies deliver agreed outcomes. One possible way to achieve better outcomes might be to allow greater financial and managerial freedom eg to borrow and to exploit commercial possibilities. The options include changing the legal status of the institutions, public/private partnerships, or a different approach to management within the public sector;

(ii) to reform the structures of support for the wider museum sector. Initially the strategic and advisory role of the Museums & Galleries Commission will be strengthened. In the longer term we wish to consider establishing a new body, incorporating both the MGC and the Library and Information Commission; views are invited on this possibility. Such a new body would be expected to: give a strong strategic lead to the museum and libraries sectors; provide links and co-ordination between national institutions and regional or local museums; provide advice to Government on policy matters; make certain funding decisions (though it would not be responsible for funding the national museums and galleries); and set standards;

(iii) to consider ensuring that the Heritage Lottery Fund has regard to views of any new museums and libraries body, in relation to the distribution of lottery funds to museums. A degree of responsibility for decisions on lottery applications by museums might be delegated to the new body;

(iv) to establish a challenge fund to raise standards at pre-eminent non-national museums;

(v) to establish a programme of research to monitor the effects of spending decisions in terms of broadening access and nurturing cultural education;

(vi) to develop a more effective regional structure for support of museums as part of the emerging regional cultural and economic forums.

7. Taking each of these proposals in turn:

8. In order to increase the efficiency and effectiveness of the national museums and galleries and the British Library, Ministers are considering ways in which these institutions might be given greater financial and managerial autonomy. There are various organisational models which might be investigated, including improved management in the public sector, public/private partnerships or a change of legal status (eg conversion to Royal Charter status or to charitable companies limited by guarantee). Views are invited on these and other possibilities. A change of status could allow for a more contractual relationship between Government and the national institutions, with less emphasis on administrative controls and more emphasis on what outcomes Ministers expect in return for grant-in-aid. The national institutions might then be left free to deliver agreed objectives in whatever way they saw fit and would be better placed to raise private sector funding. As a step towards this proposed new relationship, we shall look at ways of increasing the museums' independence and financial flexibility in the interim.

9. The Department also intends to encourage the national museums and galleries to play a more prominent role in providing support for the wider museum community and to seek ways of strengthening their operational effectiveness through pooling of resources. Over the next few months the Department will be carrying out, in consultation with the national institutions, a study of the efficiency of those bodies in order to identify best practice. The lessons from that exercise will be promulgated, firstly within the national institutions, and then more widely throughout the museums sector.

10. The Government believes that there is much common ground between museums, galleries and libraries: this includes their involvement with the general public and other users, their educational role, their relationship with local authorities and (in some cases) their collection bases. There is also a convergence in the type of issue facing each sector. Issues such as copyright, the development and use of information technology, and the development of digital resources, need to be addressed in an integrated way.

11. The Government therefore invites views on the case for establishing a new strategic body to replace the Museums and Galleries Commission and the Library and Information Commission, and to build on the excellent work which both bodies have done in recent years. The new body would combine advisory, executive and funding responsibilities, but would have the particular responsibility to give a clear strategic lead on broad policy issues, both within each sector and on issues running across both sectors.

12. Such changes would require primary legislation and could not happen overnight. Both Commissions are small bodies and their existing resources, including staffing, may need to be reinforced in order for them to take on a wider remit. Changes would be necessary before the new body could take on a full role in its sectors. However, there may be scope for bringing the MGC and LIC together physically in advance, with a sharing of common services before a merging of formal responsibilities in due course.

13. We propose that there should be an open public dialogue between DCMS and the new body over priorities for the museum sector. The MGC's existing policy and advisory role would need to be enhanced so that the new body could offer authoritative advice to Government and give a strong strategic lead for the sector as a whole. Also, it would be vital that the national museums and galleries should work closely with the new body, to ensure that the benefits of the nationals' unrivalled expertise was available to the sector as a whole.

14. A new museums and libraries body would also inherit responsibility for the MGC's Registration Scheme and other standards work, including the development of new standards for provision of museum education, and for funding the MGC's existing client bodies, including the Museums Training Institute and the Museums Documentation Association. Views are invited on what should be the relationship between any new museums and libraries body and any regional cultural development agencies and on whether the new museums and libraries body should have responsibility for the reviewing committee's work, and for acceptance in lieu advice.

15. Museums and galleries have benefited greatly from the National Lottery. However, the existing arrangements separate the distribution of lottery funds to museums from strategic planning for the sector. This complicates the development of a strategic framework for the investment of Lottery funds within the sector and hampers the effectiveness of the MGC. We envisage that, in order to give the new museums and libraries body greater influence over funding priorities for the sector, the Heritage Lottery Fund might be directed to have regard to the advice of the new body on the delivery of lottery funds to museums and galleries and that a substantial element of these might be delegated for decision by the new body and by the proposed regional cultural development structures. We shall be consulting the Heritage Lottery Fund on these proposals.

16. Under the existing funding arrangements the Department has limited scope for supporting the broader museum community (ie beyond the national museums and galleries) and for influencing the way in which it pursues the objectives which Ministers have set for the sector as a whole. In order to provide strong incentives for the delivery of these objectives throughout the sector Ministers propose to establish a new grant-in-aid funding stream in support of those non-national museums and galleries that have been designated as pre-eminent. The Government considers that the most effective means of distributing the additional support for the sector would be by means of challenge funding. Additional funds will be made available to encourage the designated museums to raise standards of collections care and public access, both within their own institutions and, through partnerships, more widely throughout the sector. The private sector and charitable foundations will be encouraged to provide partnership funding in support of this initiative.

17. In due course responsibility for the designated museums challenge fund could be given to a new museums and libraries body. In the meantime the Museums & Galleries Commission will be asked to administer the fund in consultation with DCMS. The Department will consider the possibility of establishing other challenge funds for the support of the museums sector, eg for Information Technology and museum education.

18. The Heritage Lottery Fund has recently established a Museums Access Fund worth ,7 million. We are pleased that earlier this week the guidelines for the Access Fund have been published and that applications are now being sought. We shall consider further, in the light of experience with the HLF Access Fund, how resources can best be used to support the objective of broadening access to museum collections.

19. We have reviewed the position of the four London-based non-national museums supported by DCMS in the light of the Government's plans for new administrative structures for London. We intend to transfer to the Greater London Authority the responsibility for making certain appointments to the Museum of London, the Geffrye Museum and the Horniman Museum. We also see advantages in a change to the funding arrangements for the Museum of London. There are a range of options on which comments are invited:

i. the status quo (funding responsibility shared between DCMS and the Corporation of London);

ii. transfer of DCMS's funding role to the Greater London Authority (ie the GLA to share the funding role with the Corporation of London); and

iii. full responsibility for funding the Museum of London given to the GLA.

20. We intend to reach a decision on this matter by the time the GLA Bill reaches Parliament in the Autumn. DCMS will retain the responsibility for funding the Horniman Museum and the Geffrye Museum for the time being, but with the possibility of a transfer at some stage in the future. The same principle will apply to the Bethnal Green Museum of Childhood and the Theatre Museum, both currently under the aegis of the V & A: they will remain so, but with the possibility of review in the future. Meanwhile, the Sir John Soane's Museum, with its national collection, will remain with the DCMS.

21. At present it is very difficult to assess the effectiveness of policy and spending decisions for the museum sector because of a lack of information about museum users and visitor services. This means that we are unable to measure progress in, for example: attracting people who are currently under-represented among museum users; numbers of return visits; user satisfaction; and satisfaction with educational visits. The Museums & Galleries Commission has begun to correct this with a survey of museum visitors and non-visitors. We propose that such research should be further developed, and repeated regularly, as a means of monitoring the impact of policies for the museum sector.

22. As part of the move towards a more strategic relationship between the DCMS and its sponsored bodies we will establish a tough new watchdog to monitor and improve standards of efficiency and financial management and promote quality throughout our sectors. Although we propose to consult separately on the extent and nature of the watchdog's remit, our initial thinking is that it would have a role in relation to bodies in direct receipt of grant-in-aid, and second-tier funded bodies. It would review and report to us on performance in achieving standards set, meeting aims and objectives and efficiency targets. It would also be able to disseminate good practice and provide expertise to help maximise commercial opportunities. We hope that the watchdog would be able to start its work from April 1999.

23. The Pender report found that the seven Area Museums Councils in England do much good work in support of museums in the regions. But Ministers believe it is essential to develop stronger regional structures in order to enhance their impact on the cultural life of each region. They envisage that the AMCs will be subsumed within the proposed regional cultural structures (see separate section on DCMS and the Regions) and that, in due course, they may be given a measure of responsibility for the distribution of a delegated lottery stream.

24. The funding responsibility for the Museum of Science & Industry in Manchester will be reviewed in due course in the light of the structural changes proposed above. The MGC's grant to the Tyne and Wear Museums Service will be maintained for the present subject to conditions that TWMS provides advice and assistance to other museums in the North of England. In due course the responsibility for financial support to TWMS will be transferred to the regional cultural agency for the North East.

25. We would welcome comments on any aspect of this paper but particularly on:

i. greater financial and managerial freedoms, possibly by means of a change of legal status (Paragraphs 8-9).

ii. new structures for support for the wider sector via a new museums and libraries body. (Paragraphs 10-14).

iii. greater influence from the new body over the direction of Lottery funds to museums. (Paragraph 15).

iv. a Challenge Fund for designated museums. (Paragraphs 16-18).

v. the value of research to monitor the impact on the museums sector. (Paragraph 21).

vi. the place of Area Museums Councils within the proposed new regional structure. (Paragraph 23).

26. Comments on these proposals should be sent by Friday 2 October to Strategy Unit, DCMS, 2-4 Cockspur Street, London SW1P 5DH.

Email address: csrconsult@culture.gov.uk

Extra copies of this paper may be obtained from the DCMS Public Enquiry Unit at the same address. Telephone 0171 211 6200. Fax 0171 211 6032

1. The sector is made up of a number of diverse elements, principally:

(i) Public libraries, with more than 3,600 access points in England;

(ii) DCMS funded bodies — the British Library, the Library and Information Commission, the Royal Commission on Historic Manuscripts, and the Public Lending Right;

(iii) around 700 academic libraries (publicly funded through education programmes); and

(iv) specialist libraries; commercial libraries; and private collections.

2. Together, these sectors account for approximately ,1.3 billion of public expenditure, of which around 60% is directed towards public libraries. DCMS's funding responsibility for its four libraries NDPBs, and for a number of small grant schemes and programmes, typically amounts to around ,89 million per annum - less than 7% of total sectoral expenditure. So far as Lottery funding is concerned, while libraries will benefit substantially from the ,70m from the New Opportunities Fund as part of its ICT training and content creation initiative, the opportunities for them to benefit from the Lottery more generally have been limited.

3. The review considered whether this structure provided the most effective means of delivering policy objectives in the libraries sector, and whether, in the light of the Government's developing policies for libraries, any changes ought to be made to the ways in which activities are undertaken and funded within the sector.

4. We have already set out in general terms the difficulties with the current arrangements governing the relationship between the Department and its NDPBs. These include a lack of consistency, a lack of strategic direction from the centre, and only limited knowledge of how public money has delivered Government objectives.

5. So far as the libraries sector is concerned, we recognise that the sector is fragmented and that a coordinated approach to current problems is sometimes difficult to achieve. The work of the British Library, Library and Information Commission — and indeed the sector as a whole — at present relates in a relatively unsystematic way to other cultural institutions and activities, particularly in the museums sector. Their respective roles need to be more clearly defined if the British Library is to focus on delivering essential core services and the LIC is to fulfil its leadership responsibilities across the sector as a whole. This means helping the LIC to develop a size and status commensurate with its leadership and advisory roles, and refocusing the British Library on those issues which more clearly reflect the Government's objectives for the sector.

6. The current structure of the libraries sector does not allow the British Library and other NDPBs the independence or financial flexibility from which they could benefit. There is a wide variation in the effectiveness of individual library authorities. Moreover, regional structures vary greatly in their effectiveness and their relationship with existing regional cultural bodies could be improved. Coordination with other sectors — particularly education - also needs to be improved if libraries are to fulfil their potential in underpinning lifelong learning and contribute to educational initiatives such as the National Grid for Learning, the University for Industry and the National Year of Reading.

7. We recognise that, apart from being valued and important institutions in their own right, libraries contribute to the Government's wider objectives as follows:

(i) they underpin educational achievement, in its broadest sense, encompassing both the formal curriculum and life-long learning;

(ii) they contribute to the access agenda, by providing gateways to the nation's storehouse of knowledge and information;

(iii) they contribute to social inclusion, being places where haves and have nots gain access to information on an equal footing;

(iv) they contribute to the modernisation of the delivery of central and local government services; and

(v) they provide information which underpins commercial and economic endeavour.

8. To help address the problems set out in paragraphs 4 to 6 above, we would like to see the Department better able to give a strategic lead to those sectors which it sponsors; and provide more clarity about the objectives on which public money is being spent. Within the libraries sector, the main issues we would like to tackle are:

(i) to improve funding for libraries;

(ii) to promote stronger leadership;

(iii) to improve the links between the libraries and education sectors;

(iv) to ensure the public library system operates more effectively at the regional level;

(v) to improve the co-ordination of activities between publicly funded library bodies;

(vi) to develop a new structure of relationships with library NDPBs in order to give them greater financial flexibility;

(vii) to improve coordination between the libraries and museums and galleries sector; and

(vii) to make the most of new technologies.

9. To help deliver these objectives we would welcome views on the following proposals for action:

(i) to explore whether Lottery funding for the purchase of books and materials and the development of information technology might be made available through the Heritage Lottery Fund and later through the New Opportunities Fund;

(ii) to take immediate steps to enhance the role of the Library and Information Commission by giving it responsibility for undertaking those functions relating to library research currently undertaken by the British Library;

(iii) subject to legislation, to incorporate the functions of the Advisory Council on Libraries within the LIC;

(iv) to consider the case for providing the LIC with the resources necessary for it to lead and coordinate the development of the public libraries IT network;

(v) in the medium term, to create a new body, merging the LIC with the Museums and Galleries Commission in order to create a single powerful Museums and Libraries Council, promoting greater co-ordination between national, regional and local institutions;

(vi) to consult on possible changes to the legal status of the British Library in order to give it greater financial freedom;

(vii) to develop a stronger regional library structure encouraging all libraries within a region to work together and which embeds public libraries within the emerging regional cultural and economic structures;

(viii) to develop better linkages between libraries and the world of education;

(ix) to encourage greater links between the Royal Commission on Historical Manuscripts (RCHM) and the LIC and to consider it as a candidate for direct funding from the Museums and Libraries Council in the longer term;

(x) to maintain the Wolfson Challenge Fund for IT in public libraries for 1998/9 and 1999/2000, and to seek views on the uses to which a similar challenge fund could be put beyond that date.

(xi) to focus resources by ceasing separately to fund two small grant schemes, and moving responsibility for another to the LIC.

10. We believe there are two key priorities for Lottery funding to benefit public libraries. The first, which would best be delivered by opening up a new stream under the Heritage Lottery Fund, would help libraries to renew their supply of books and materials as a one-off exercise following a substantial period of neglect. The second, which might be a candidate for a future NOF initiative, might allow institutions involved in the development of lifelong learning to invest in IT infrastructure. While some funding may be available without amending the HLF's statutory base, legislative change will be required to deliver this new stream in its fullest form. New NOF initiatives are, of course, decided by Parliament after a full statutory consultation.

11. As part of this proposal we intend to consult the Heritage Lottery Fund on our proposal to ensure that it has regard to the views of the new museums and libraries body, in relation to the distribution of lottery funds to museums and libraries.

12. The LIC was established in 1995 in order to provide a single source of advice to Government on cross-sectoral library and information issues. It has gone a long way towards meeting this objective. Its New Library Report and its 20/20 vision statement demonstrate the value of an influential and authoritative cross sectoral advisory body. The Commission has until now been limited in what it can do by its size and by the limited amount of funds at its disposal. We wish to change that in order to allow it to develop a critical mass which will allow it to meet all the objectives it has been set. One way of achieving this in the short-term is to transfer the British Library's research grants operation to the LIC. Apart from increasing the visibility and role of the LIC, dhis would also represent a more rational arrangement for the management of the nation's library research programme, which is currently worth around ,1.6m per annum. We intend that this change will take place from April 1999.

13. This decision also reflects the fact that there is no clear cut rationale for separating the responsibility for establishing a strategic research framework carried out by the LIC, from the funding function supported by the British Library. Integrating the two will therefore establish a single focal point covering both the strategic development and the implementation of libraries research. At the same time, it will allow the British Library to focus on those activities which are more central to its role as the national library.

14. We also intend to consider how the LIC can best be enabled to lead and coordinate the development of the public libraries IT network. A decision on this will be made in the light of the work currently being conducted by the LIC's public libraries network implementation committee, which is due to report to Government in August.

15 The Advisory Council for Libraries is charged, under the Public Libraries and Museums Act, with providing the Secretary of State with advice on public library matters in England in order to help him exercise his statutory duties under the Act. We believe it is sensible to legislate to combine the functions of the ACL with those of the Libraries and Information Commission and, subsequently, the new Museums and Libraries body. This would provide a single source of advice on libraries in England, and would increase opportunities for initiatives spanning the whole sector.

16. We believe there is much common ground between libraries and museums and galleries, including their educational role, their relationship with the local authorities and their collection bases. There is also a convergence in the type of issue facing each sector. Issues such as copyright, the development and use of Information Technology and the development of digital resources need to be addressed in an integrated way.

17. We therefore propose in the medium term to create a new body, bringing together the Library and Information Commission with the Museums and Galleries Commission (which funds the broader museums sector but not the national museums and galleries). There may be early scope for bringing the MGC and LIC together physically in advance, with a sharing of common services at the outset.

18. Library and information services have a substantial history of working together at both regional and national level. There are currently 10 regional library systems covering the United Kingdom, seven of which cover England. Their main function is to facilitate the inter-lending of books and other materials within all types of libraries although some have begun to take on an IT networking role and have moved into various forms of research and development.

19. We believe that strong regional library organisations should be major players in the regional cultural structure proposed in the separate paper on DCMS and the Regions.

20. A strong regional library system would provide:

(i) a regional focus of expertise and a single coherent and efficient source of advice to other regional and central bodies;

(ii) a mechanism for implementing a regional library and information strategy, involving cross-sectoral co-operation and co-ordination, marketing and the promotion of services, co-ordinated acquisition, IT development, and co-ordination of policies for preservation, conservation, dispersal and disposal; and

(iii) a focus for considering lottery applications with a library element.

21. In order to develop stronger regional structures for libraries, we would prefer to build upon the strengths of the existing regional library systems. However, we are aware that they are entirely voluntary groupings with a strong historical base, and that their boundaries are not always congruent with other regional bodies. We therefore seek views on how regional library systems might operate within the DCMS "cultural" groupings described in the paper on DCMS and the Regions. The current work taking place to establish a London Library Development Agency will provide useful background for this. We would welcome views on how to proceed.

22. Given the Government's emphasis on educational achievement, we wish to promote ways in which co-operation between libraries and the educational sector might be improved. We define educational libraries as including higher education institutions, primarily universities; further education colleges, including sixth form colleges; and schools.

23. As a first step, we propose to ask the Library and Information Commission to establish a cross-sectoral working group to examine in detail how such co-operation could be stimulated and improved, using, for example, regional library and information plans or local library agreements. The LIC will report both to the Secretary of State for Culture, Media and Sport and to the Secretary of State for Education. The results of this work will help inform the library regional bodies, which we envisage taking on responsibility for promoting library co-operation and co-ordination between the public and academic sectors.

24. As part of this work, the LIC will be asked to consider:

(i) the scope for good practice guidelines to encourage access arrangements;

(ii) identifying the most promising areas for collection co-ordination;

(iii) considering ways of promoting inter-lending arrangements and access to other libraries; and

(iv) assessing the development of integrated strategies at local level for delivery of library services to children and young people.

25. The terms of reference and membership of the group will be announced shortly.

26. The British Library is currently reviewing the priorities attached to all of its functions, in order for it to focus on those issues which will be central to the Library in the 21st century. To assist with this, Ministers are considering a change in the status of the Library, together with the national museums and galleries to take them out of the directly controlled government sector. This would allow them greater financial and managerial freedom, eg, to borrow and to exploit commercial possibilities more fully. As a step towards this we would together look for ways to increase the Library's independence and financial flexibility in the interim period. We also intend to move towards three year funding settlements with all our NDPBs, including the Library.

27. As part of the move towards a more strategic relationship between the DCMS and its sponsored bodies we will establish a tough new team to monitor and improve standards of efficiency and financial management and promote quality across all our areas of responsibility. Although we propose to consult separately on the extent and nature of the watchdog's remit, our initial thinking is that it would have a role in relation to bodies in direct receipt of grant-in-aid, and second-tier funded bodies. It would review and report to us on performance in achieving standards set, meeting aims and objectives and efficiency targets. It would also be able to disseminate good practice and provide expertise to help maximise commercial opportunities. We hope that the watchdog would be able to start its work from April 1999.

28. The RCHM was constituted by Royal Warrant in 1869 to investigate and advise on all matters concerning historical records throughout the United Kingdom, and to promote and assist their preservation and study. The Commission's remit is limited to privately owned records. Public records are the responsibility of the Public Records Office, the freestanding agency of the Lord Chancellor's Department. Both bodies already work closely together.

29. We believe that such co-operation should continue but that there would also be benefit in encouraging closer working relationships between the Commission and the LIC. This reflects the relationship between public libraries and the archive service, and the need to ensure that archive customers benefit from developments in IT networking. The Government is therefore considering, once the proposed Museums and Libraries Council is established, whether funding for the Commission might become its responsibility.

30. The Public Lending Right has a narrowly defined role and does not fit obviously with other organisations with broader remits in the library sector. We therefore propose to keep the PLR as a freestanding NDPB which will continue to receive funding from the Department.

31. We propose to cease making specific grants to the Royal Geographical Society and the National Manuscripts Conservation Trust. Both grants stem from historical arrangements which are no longer appropriate given the emergence of new funding streams, and the Government's new priorities for the libraries sector. At present, a grant is also paid to the Royal National Institute for the Blind to assist with the production of its embossed literature service. We believe it makes sense to reconsider the precise purpose for which these funds are used. We therefore intend to ringfence the sum of ,200K and to allocate it to the LIC to ensure that blind and visually impaired people benefit in a much wider way from access to library and reading services. The LIC will work in conjunction with the RNIB and others to take this forward.

32. The DCMS-Wolfson Challenge Fund, which is currently in the second year of a three-year programme, will be retained for 1999/2000. Its focus is likely to remain on developing IT infrastructure in public libraries. We will consider the scope for extending this, or a similar scheme, beyond this period. We invite views on the uses to which such a scheme might be put.

33. We would welcome comments on any part of this paper but particularly on the following issues:

i. Proposals to give British Library's research functions to the LIC and to legislate to combine the functions of the ACL with the LIC. (Paragraphs 12, 13, 15).

ii. Proposals for LIC taking on role as an IT Development Agency (Paragraph 14).

iii. Proposal to merge LIC and MGC into a new Council. (Paragraphs 16-17).

iv. Role of strengthened regional organisation in broader regional structure. (Paragraphs 18-21).

v. Proposals for improved co-operation between Libraries and the education sectors. (Paragraphs 22-24).

vi. A possible change of status for the British Library to provide it with greater financial and managerial freedoms (Paragraph 26).

vii. Clearer links between the RCHM and the LIC and, in due course, the new Council. (Paragraphs 28-29).

viii. Future uses for libraries sector challenge schemes (Paragraph 32).

33. Comments on these proposals should be sent by Friday 2 October to Strategy Unit DCMS, 2-4 Cockspur Street, London SW1P 5DH.

Email address: csrconsult@culture.gov.uk

Extra copies of this paper may be obtained from the DCMS Public Enquiry Unit at the same address. Telephone 0171 211 6200. Fax 0171 211 6032.

THE ARTS

1. Support for the arts in Britain rests on a complex structure of central and local government funding, box office receipts, business sponsorship, donations and voluntary effort.

2. The Arts Council has for some time been the recipient of the largest individual grant from DCMS, and has formed the main link between Government and the arts. Over many years it has developed important policies on quality, access and participation, and has built up an impressive infrastructure of arts facilities around the country.

3. At the same time, however, the Arts Council had become too bureaucratic and had failed to take the difficult decisions necessary for the health of the arts. It had lacked strategic direction and had failed to provide strong positive leadership for the arts, and a unifying voice for the sector as a whole. For too long it had viewed its relationship with Government as adversarial rather than seeking to form partnerships.

4. The Crafts Council, by contrast, has been successful in sponsoring the sector and in championing the cause of individual craftsmen and women. The division between the two Councils, has led to a structure which cannot easily respond to new and developing technologies and artforms and which is weakened because of the lack of a single strategic overview. This division has served to exaggerate the imbalance within the Arts Council between the performing and the visual and applied arts.

5. The institutional structure has also reflected and helped to perpetuate an unhelpful and increasingly unrealistic divide between the subsidised and commercial sectors; between professional and amateur; and between pure and applied artforms. In the past, funding has tended to distort the focus of policy, to the extent that policy came to be seen as exclusively concerned with the subsidised sector, and a question simply of how much money was needed. The ability of the Lottery to respond to applications from a range of bodies beyond the sector traditionally supported by the Arts Council has highlighted the narrowness of that sector.

6. At local and regional level, many Regional Arts Boards have successfully developed a role as a wider 'investment agency' for the arts — in liaison with other regional bodies — and in building local partnerships. But there has been an increasing tension — and arguably a dislocation — between that role and the agenda which the Arts Council has set from the centre, for the arts funding system.

7. We want to see the Department give a strategic lead to the sectors which it sponsors, and more clarity about the purposes for which public money is spent. In future, policy must determine the allocation of funds, rather than the reverse. Resources must follow policy priorities, rather than maintaining historic patterns of funding for their own sake. Policy-making must be driven by:

* the promotion of access: audiences — in the broadest sense — must be at the heart of policy-making;

* the pursuit of excellence and innovation;

* nurturing educational opportunity;

*the need to foster the arts as a key part of our creative industries.

8. The taxpayer needs to be able to understand more clearly what outputs are expected from the sums of money made available to the arts: whether directly or indirectly in the contribution of the arts to wider social and economic objectives, including urban and rural regeneration; education and training; and tackling social exclusion. Ministers want to ensure that decision making takes place as close as possible to the point of delivery, and that more money gets to artists and audiences, with less spent on administration.

9. We want a new cultural body which is capable of taking a lead across the broad range of all artistic activity; which will be both a source of policy advice to the Government and a national funding body for the arts and crafts. As a national funder, it must take a coherent view of the overall funds available to the arts and deliver better value for money through the strategic deployment of resources — through both grant-in-aid and Lottery money — over a longer planning cycle than has been possible to date.

10. We are wholly committed to plural funding for the arts, and in particular to the contract between public and private sector funding. A national funding body must also be able to take account of the ability to lever in, and work alongside money from other sources to enhance the overall level of funds available to the sector. We want to encourage cross-fertilisation between business and the arts, and to strengthen and deepen the relationship between the arts and private sector funding sources by building these priorities into the core thinking which underpins public funding.

11. We believe that the principle of arm's length funding should remain. The Government's role is to give a clear policy lead in the context of the Government's overall strategy, and to set concrete objectives for the sector, for example through funding agreements and through policy directions. We will not seek to intervene in individual spending decisions.

12. We will make substantial additional funds available to the arts over the next three years. That money will be targeted in line with the government's overall policy objectives and clearly linked to specific, measurable outputs so that the effectiveness of funding can be seen. A new relationship with the arts sector should mean that each side understands more clearly the basis of the relationship, and the expectations and responsibilities of public funding.

13. As part of the move towards a more strategic relationship between the DCMS and its sponsored bodies we will establish a tough new watchdog to monitor and improve standards of efficiency and financial management and promote quality across all our areas of responsibility. Although we propose to consult separately on the extent and nature of the watchdog's remit, our initial thinking is that it would have a role in relation to bodies in direct receipt of grant-in-aid, and second-tier funded bodies. It would review and report to us on performance in achieving standards set, meeting aims and objectives and efficiency targets. It would also be able to disseminate good practice and provide expertise to help maximise commercial opportunities. We hope that the watchdog would be able to start its work from April 1999.

14. While we very much welcome the steps the Arts Council has already taken to begin the process of reform, we believe that the current national structure, centred on the (separate) Arts and Crafts Councils, is not necessarily the best way to deliver the independent strategic overview of the sector which we believe should exist. The new compact with Government requires a body which is open and accountable, and which can command respect right across the arts. In particular it should be seen to embrace a wide spectrum of the arts and break down artificial barriers within art forms, for example between the contemporary visual arts, and the crafts and applied arts.

15. We therefore propose the creation of a new body, incorporating the present national responsibilities of the Arts Council of England and the Crafts Council. The new body would have a broad remit across the performing and visual and applied arts, and treat them evenhandedly. It would allocate both grant-in-aid and Lottery funding across the whole of the sector, in support of specific outputs and clearly defined objectives agreed with the Department.

16. We hope that the new body would be able to take an informed view across all areas of the arts, including those in which it was not a major funder. It will be important to ensure its ability to take appropriate account of, for example, amateur and voluntary activity, and of the scope for collaborative working between the commercial, subsidised and amateur sectors. In taking on a greater role in the visual and applied arts the new body would be expected to play a role in the encouragement of good design, although there is no proposal for it to take over the business oriented work for which the Design Council is responsible.

17. The separate paper on film describes the new structures we propose should deliver a new coherence in Government support for film, covering both the educational/cultural aspects and the industry development needs of the British film industry. In establishing this coherence it would not be appropriate to leave elsewhere responsibility for the largest available pot of public money for film. We therefore propose that responsibility for distributing the Lottery stream for film should go to the new film body.

18. We also intend to review the Arts Council's current and possible future role in relation to architecture. This is discussed in detail in the separate section on architecture.

19. We agree that the objectives of stimulating funding partnerships between central and local government and the private sector, and of deepening those relationships, should be part of the core thinking which underpins public funding. In this area, as others, the Government will provide the strategic overview, advised by expert bodies and in particular the Association for Business Sponsorship of the Arts (ABSA) with whom we intend to develop research and other mechanisms to enhance understanding of the issues and potential benefits both for business and the arts. The new funding body, as the public funding body for the arts, will be asked to consider how to integrate business support objectives more clearly into its core policies, working closely with the and other interested bodies. From 1999-2000 funding of the Pairing Scheme will be routed through the Arts Council working closely with ABSA and other interested bodies so that this process of integration can begin.

20. The separate section on the regions contains proposals for the development of new cultural bodies in the regions. Views are invited on the make up of such bodies which might have at their core the current functions of, amongst others, the Regional Arts Boards.

21. The new national body would be responsible for truly national functions and services — including the dissemination of good practice, but would devolve as many of its functions as possible, including in particular grant-making, to the regions. It would be responsible for giving a strategic lead to the arts in all forms, and would set a framework within which the regional bodies could operate, taking full account of their own local circumstances and priorities.

22. Working in partnership with the new body, strong regional cultural bodies could deliver regional policy-making and funding. There needs to be a clearer sense of what should be done at national level and what is best done locally or regionally. We want to build on Regional Arts Boards' strengths in liaison with other regional bodies and in building local partnerships, in particular with local government. Their activities must be more clearly tied in to a national over-arching strategy, and the lines of accountability must be clarified and strengthened.

23. Wherever possible, the national body would devolve to the regions funding and stewardship responsibility for regional clients; and could delegate responsibility for regional Lottery awards. In this way, the arts will benefit from the synergies between existing regional cultural bodies; from a more sensible division of labour between national and regional bodies; and from its own distinct voice alongside the economic and political regional forums which are emerging.

24. Alongside grant-in-aid funding, the Government intends to maintain after 2001 the percentage share of Lottery funding for arts at the 16b% in the National Lottery Act 1998. This new certainty about Lottery income will provide a clear financial framework within which ACE can develop the new strategic plan for Lottery funding required by the 1998 Act, embodying a new clarity about the way Lottery money will work in parallel with grant-in-aid so as to make the best use of the total public resources available.

25. Views are welcomed on all the issues raised in this paper but particularly on the proposal for the establishment of a new cultural body, and what its remit should be (paras 14-16).

26. Comments should be sent by Friday 2 October to Strategy Unit, DCMS, 2-4 Cockspur Street, London, SW1P 5DH.

Email address: csrconsult@culture.gov.uk

Extra copies of this paper may be obtained from the DCMS Public Enquiry Unit at this address. Telephone 0171 211 6200. Fax 0171 211 6032

1. Sport is an important part of the nation's shared experience and values - the nation's culture. It will continue to be central to the work of DCMS and links closely with other sectors for which the Department is responsible. Broadcast sport is one of the main ways in which many fans get access to sporting events whether through radio or television. The potential for tourism generated alongside major sporting competitions, or around sports and leisure facilities is obvious and is built into the work the Department has in hand to bring the World Cup to England in 2006.

2. Set alongside private sector activity and local government support for sport the involvement of Government has always been relatively modest. The review has confirmed that this is the right balance and that Government support for sport should be directed carefully to the areas where it is needed and that for the most part sport should be something which is run and enjoyed without close involvement from Government. The Department's own programme for sport is also relatively modest compared with the expenditure of other parts of Government such as the Department for Education and Employment in relation to school sport. The review has highlighted a need for close working relationships with other Government Departments to ensure their programmes contribute where possible to Government objectives for sport and that the many sources of private sector and voluntary effort are mobilised.

3. The Department's own programmes will be targeted very much towards the themes and priorities identified during the Comprehensive Spending Review. In particular Government funding will be directed towards:

i. promoting access through further development of the "Sport for All" policies and looking particularly at the opportunities to participate in sport which can be opened up to those who are excluded at present;

ii. supporting excellence through a strengthened UK Sports Council, the new Sports Cabinet and the development of the UK Sports Institute; and

iii. education and helping schools, with expertise and facilities to provide good quality physical education in schools and building links between schools and sporting organisations in the local community.

4. The Department's budget for excellence in British Sport has been channelled through the UK Sports Council. It is widely felt that the Council has not done as well as it could have done as a champion of British Sport. Following careful evaluation of the role and value of the Council's work, and full consultation with Ministers responsible for sport in other parts of the UK, we have decided to strengthen the Council, and make it a distributor of Lottery funding in its own right. This is a significant and positive change in the way sport will be supported in this country and has been widely welcomed as a significant step forward in the way sport is organised.

5. We have also reviewed the way that funds are deployed by the English Sports Council (ESC). The ESC has already adopted progressive policies which seek to engage the widest cross section of the community in sport and physical recreation and for the most part we are satisfied that their work is well directed and deserves continued support. We propose a number of small changes: notably increasing the membership of the Council to enable its Members to share better the burden of work in distributing Lottery funds; a further drive to reduce running costs by encouraging new ways of working; and further emphasis on activities which address in measurable ways inequities in the availability of sport and recreation and the take up by different groups in society. The Council is already contributing to the Government's plans for a more inclusive approach to public services, and they will be encouraged to do more in a new funding agreement.

6. We will be using the new flexibility the Government's new approach to public expenditure affords to strike three year funding agreements with both the English and the UK Sports Councils. As we start work on this it will be essential to hear from as wide a range of interested parties as possible what should be the specific priorities within the overall approach set out here.

7. Alongside grant-in-aid funding, the Government intends to maintain after 2001 the percentage share of Lottery funding for sport at the 16b% in the National Lottery Act 1998. This new certainty about Lottery income will provide a clear financial framework within which ESC can develop the new strategic plan for Lottery funding required by the 1998 Act, embodying a new clarity about the way Lottery money will work in parallel with grant-in-aid so as to make the best use of the total public resources available.

8. The separate paper on DCMS and the regions proposes that DCMS sectors should be brought together into more powerful cultural groupings in each region. We would welcome views on the place of sport in the new groupings.

9. The English Sports Council's work in the regions is delivered through its ten regional offices which are executive arms of the Council itself. The offices are responsible for implementing ESC policy and programmes and maintain good links with local authorities, schools, governing bodies of sport and other agencies to ensure initiatives like the National Junior Sport Programme are delivered in a way that takes account of regional differences and circumstances. The regional offices also maintain close contact with the regional sports forums established by local authorities and regional representatives of the governing bodies of sport.

10. In pursuit of the regional policy proposals set out in our paper on DCMS in the regions, we are now consulting on two options for the future. The regional offices of the ESC could be retained in similar form to now and the links between them and the regional forums strengthened. That option would allow some variation in the precise arrangements adopted in individual regions. Or the implications of transferring much of the work of the regional offices to new executive regional DCMS bodies could be explored further. Both of these options would require sports development policy and programmes to be more responsive and accountable to the needs of the individual regions. The Department is particularly keen to have views at this stage on the relative merits of combining sports development with other activity under a single regional body on the one hand or developing the regional arrangements for sport alongside, but administratively separate from, this initiative.

11. We have reviewed the role of the Football Licensing Authority (FLA). The FLA will have achieved much of its original objective in 2000 when Premier and Football League clubs will have converted their grounds to all seated accommodation, or upgraded any retained terracing to the highest safety standards.

12. The Government is determined that the safety improvements within football prompted by the Taylor Report will continue, but we recognise that the future level of regulation should reflect improvements to grounds and in safety management over recent years. We propose to continue to oversee the discharge by local authorities of their safety certification duties in relation to Premier and Football League clubs, but to abolish the system whereby football grounds need to be separately licensed to admit spectators.

13. The FLA has been very effective in driving up safety standards within football, and we have considered whether its powers should be extended to the other major spectator sports. We have been encouraged by general improvements in safety certificates and the initiatives taken by governing bodies to improve safety arrangements. We do not therefore propose to extend the FLA's powers, but we do want to make the valuable expertise built up by the FLA available to sports outside football and to local authorities. We will be looking at the extent to which it is reasonable to charge for such advice.

14. The Government will be consulting shortly with local authorities, sports and other interested parties on the proposition that the FLA be reconstituted as a Sports Ground Safety Authority — to support the Government across the whole range of its sports ground safety responsibilities, to provide a general source of expertise on sports ground safety and to ensure safety improvements in football are continued.

15. Sportsmatch is a successful scheme which brings in much needed business sponsorship to the previously neglected area of grass roots sport. The Government has made clear that it would like to see Lottery distributors coming forward with new ideas for opening up Lottery funds to smaller community sports initiatives and we believe there may be links here to be made with the Sportsmatch approach. We have considered the future of Sportsmatch in England in the light of this.

16. We are considering how the two funding sources could best work together in the light of these developments. Our starting assumption is that this will best be achieved by transferring in full responsibility and funding for the Sportsmatch scheme from the Department to the English Sports Council with effect from April 1999. The funds would be at least ring fenced for the first financial year while the Council reviews with the scheme's managers the options for the future. Longer term arrangements would be decided following discussion of the review between Ministers and the English Sports Council. The aim would be to ensure that grant-in-aid, lottery funding and Sportsmatch money, could be deployed in a synchronised way.

17. We will consider this proposal in detail over the next few months with the ESC, the Institute of Sports Sponsorship — who administer the scheme — and the Sportsmatch team. Comments from others who have an interest in, or experience of, the Sportsmatch scheme in England are also welcome.

18. As part of the move towards a more strategic relationship between the DCMS and its sponsored bodies we will establish a tough new watchdog to monitor and improve standards of efficiency and financial management and promote quality across all our areas of responsibility. Although we propose to consult separately on the extent and nature of the watchdog's remit, our initial thinking is that it would have a role in relation to bodies in direct receipt of grant-in-aid, and second-tier funded bodies. It would review and report to us on performance in achieving standards set, meeting aims and objectives and efficiency targets. It would also be able to disseminate good practice and provide expertise to help maximise commercial opportunities. We hope that the watchdog would be able to start its work from April 1999.

19. This is a summary of the main decisions taken as a result of our review of expenditure and the issues on which we are seeking further views through consultation. It is only a starting point. The Secretary of State is now moving on to a more detailed review of sports strategy. This work will ensure that our investment in Britain's sporting future addresses the problems associated with social exclusion, the need for many parts of government and the public sector to work together towards shared goals, and in particular the opportunities for sport and for play for young people.

20. The Department is actively seeking your views on all the ideas set out in this paper and particularly on the following issues:

i. specific priorities within the overall policy framework for the UKSC and ESC. (Paragraphs 4-6)

ii. the role of sport in the proposed new regional cultural structures. (Paragraphs 8-10)

iii. future support for sports ground safety. (Paragraph 11-14)

iv. future support for sports sponsorship. (Paragraphs 15-17)

21. Comments on these proposals should be sent by Friday 2 October to Strategy Unit, DCMS, 2-4 Cockspur Street, London, SW1P 5DH.

Email address: csrconsult@culture.gov.uk

Extra copies of this paper may be obtained from the DCMS Public Enquiry Unit at this address.

Telephone 0171 211 6200. Fax 0171 211 6032

1. This paper addresses the work of protecting and enhancing the historic built environment of England and of ensuring increased public appreciation and understanding of it.

2. At present central government's responsibilities for ensuring the recognition, recording and protection of the built heritage in England and of disseminating this information to those with an interest are supported or performed by two bodies, English Heritage (EH) (formally the Historic Buildings and Monuments Commission) and the Royal Commission on the Historical Monuments of England (RCHME). Inter alia, EH offers grant aid towards conservation and repairs to historic buildings and structures, it maintains and presents to the public a portfolio of historic properties which are in the care of the State, and it is the Government's statutory adviser on archaeology and building conservation. RCHME compiles, curates and provides public access to the National Monuments Record, an extensive archive which is continuously strengthened by new survey and recording work carried out by the Commission; and it coordinates the development of local heritage records through standard setting and grants. In addition, the National Heritage Memorial Fund stands as a separate body able to assist with particular occasional acquisitions of heritage importance. Part of our funding proposals for the next three years is for a gradual enhancement of the grant-in-aid made available to the NHMF.

3. The Department itself currently performs directly a number of functions in this area:

- it has responsibility for underwater archaeology and the protection of wreck sites around British coasts, and services the Advisory Committee on Historic Wreck Sites;

- it operates the Heritage Grant Fund (HGF) through which small-scale grants are made available to a range of projects and organisations which operate, largely through voluntary effort, across the built heritage sector. The HGF supports, inter alia, the work of the National Amenity Societies and the promotion of the annual Heritage Open Days;

- it determines the allocation of annual grant to the Architectural Heritage Fund (AHF), which is then paid as an earmarked allocation within the annual grant-in-aid to English Heritage;

- it directly maintains a number of historic properties in London: Trafalgar Square; Marble and Wellington Arches; the Royal Naval College, Greenwich (now via the recently-created charitable trust, the Greenwich Foundation for the Royal Naval College); Apsley House; and a group of statues and monuments;

- finally, the Department has direct responsibilities for the listing of historic buildings, for the scheduling of Ancient Monuments and for giving consents to developments affecting monuments on the schedule. In all these cases, it is advised by EH but ultimate decisions rest with the Secretary of State.

4. We want to ensure that this work is continued and further strengthened. However, the Department's objectives in this area are achieved through a large number of public bodies and a plethora of small schemes, including a certain amount of direct provision and maintenance of properties by the Department itself. These arrangements have developed over the years to meet particular needs, but without any coherent strategy. The Spending Review has provided an opportunity for a comprehensive re-examination of current arrangements.

5. The Review's conclusion is that it would be more efficient and less confusing for those concerned in this sector if a simpler structure could be introduced, focusing support through one lead public body and devolving to that body some of the functions which the Department itself currently performs.

6. As part of the move towards a more strategic relationship between the DCMS and its sponsored bodies we will establish a tough new watchdog to monitor and improve standards of efficiency and financial management and promote quality across all our areas of responsibility. Although we propose to consult separately on the extent and nature of the watchdog's remit, our initial thinking is that it would have a role in relation to bodies in direct receipt of grant-in-aid, and second-tier funded bodies. It would review and report to us on performance in achieving standards set, meeting aims and objectives and efficiency targets. It would also be able to disseminate good practice and provide expertise to help maximise commercial opportunities. We hope that the watchdog would be able to start its work from April 1999.

7. We see benefits in bringing together the functions of EH and RCHME, which are largely complementary, within one body which would retain the name and functions of EH in order to avoid the need for substantial legislative change. This amalgamation would provide a clearer national focus for delivering the Government's objectives for the preservation and presentation of the built heritage in England. At the same time, we will be looking to ensure that this body is able to offer its expertise abroad, which EH is currently constrained from doing. In addition, EH is currently moving towards the establishment of a new regional structure which will bring together, within each of the Government Office regions, EH's separate responsibilities for Conservation and for Historic Properties. The RCHME also has a regional structure, albeit a less extensive one. It would be consistent with our proposals for strengthened cultural arrangements in the regions for the functions of EH and RCHME to be brought together to deliver an even more effective service for the built heritage in each region. The relationship between heritage and executive regional DCMS bodies is discussed in the separate paper on DCMS and the Regions.

8. Over time, an amalgamation between the two bodies could result in some cost savings, especially in relation to administration. This would mean a higher proportion of the available funds could be directed specifically to the functions of recording and preservation. However, we recognise that, during the period needed to effect such a significant reorganisation (which would also require some amendments to legislation), some additional costs could be incurred. The question of future head office accommodation will be for the bodies' management to consider, but we envisage that the Swindon offices of the RCHME will continue to house the National Monuments Record and related functions.

9. Within the strategic framework proposed for the sector, many of the responsibilities currently undertaken directly by DCMS should become an integrated part of the work of the sectoral lead body. The proposal is that wherever possible these responsibilities should be transferred to EH. At present, the Department must, in many cases, call on advice from EH and RCHME. A transfer would allow more considered, expert judgements to be made than is possible within the Department itself.

10. Consideration will be given to earmarking funding in a number of instances — for example, in the case of the National Amenity Societies and Heritage Open Days. In the case of the Heritage Grant Fund, the intention would be to transfer responsibility to EH in time for the funding round beginning on 1 April 2000. Responsibility for determining the annual grant to the AHF would however pass to EH with effect from the financial year beginning 1 April 1999. In the case of underwater archaeology legislation would be required to effect a transfer of responsibility to the new lead body (and it is likely that some parallel arrangements would have to be set up in Scotland and Wales). The timing of a transfer would depend in part on when legislation could be brought forward.

11. On the Department's historic property responsibilities, we propose that EH should be asked to take direct responsibility for Marble Arch, Wellington Arch, the statues and monuments, if possible from 1 April 1999. We will be exploring alternative management arrangements for Apsley House and the Wellington Museum. We propose to transfer the management of Trafalgar Square, and Parliament Square which is currently maintained by the Royal Parks Agency (RPA), to the new Greater London Authority, which might wish to contract with EH for maintenance of the statues and monuments and with the RPA for the maintenance of Parliament Square itself.

12. We have examined the scope for devolving a greater measure of responsibility for listing and scheduling to EH. However, the shift of some decision-making powers , which would need primary legislation, would also require the introduction of a formal right of appeal for aggrieved owners. As this is likely to be less efficient and cost-effective than the present arrangements, we have concluded that the full responsibility for these functions should remain with the Department. Similarly, we do not propose to make any change to the arrangements whereby responsibility for deciding applications for scheduled monument consent rests with the Department. To transfer that responsibility to local authorities — the only appropriate alternative to the present arrangements — would be disproportionately more expensive than the existing procedures.

13. We believe that the objectives of stimulating funding partnerships between central and local government and the private sector, and of deepening those relationships, should be part of the core thinking that underpins public funding. We will be looking at ways in which the lessons learned from the pilot scheme run in the north of England by the Association for Business Sponsorship of the Arts to stimulate private and business sponsorship of the heritage can be developed on a national scale. In doing so, we will want to take account of the new arrangements which will be worked up for the arts sector, as indicated in the separate section on the arts.

14. Alongside grant-in-aid funding, the Government intends to maintain after 2001 the percentage share of Lottery funding for heritage at the 16b% in the National Lnttery Act 1998. This new certainty about Lottery income will provide a clear financial framework within which NHMF can develop the new strategic plan for Lottery funding required by the 1998 Act, embodying a new clarity about the way Lottery money will work in parallel with grant-in-aid so as to make the best use of the total public resources available.

15. The Heritage Lottery Fund (HLF) is currently charged with distributing lottery funds for the heritage throughout the UK. This responsibility covers funding for the built and natural heritage, as well as for museums and galleries, archives and historic library collections. We see considerable advantage in having a single body to assess the needs of all sectors of the heritage across the whole of the UK and we propose that the HLF should continue to fulfil this role. We intend, however, that the HLF's funding remit should in due course be extended to encompass the supply of books and materials for libraries on the lines described in the separate paper on libraries. We also propose that in the case of both libraries and museum projects the HLF should be encouraged to work closely with the proposed new Museums and Libraries Council described in the separate sections on museums and libraries. We further propose to encourage the HLF to enhance its regional presence and to delegate decision-making to regional bodies.

16. We are not proposing any alteration to the existing arrangements for funding of, or allocation of responsibilities to, the Historic Royal Palaces, Royal Parks Agency (other than in respect of Parliament Square), Royal Household (for property services at the occupied Royal Palaces in England), Churches Conservation Trust, Chatham Historic Dockyard Trust and the Foundation for the Royal Naval College, Greenwich. Proposals in respect of the encouragement of good new architecture are contained in a separate paper.

17. We would welcome comments on any aspect of this paper but particularly on:

i. the proposal for a single lead body for the heritage sector. (Paragraphs 7-8)

ii. the proposed transfer of functions currently carried out by the Department to the new lead body. (Paragraphs 9-11)

iii. how the heritage structure in the regions will relate to the proposal for strengthened regional cultural arrangements overall. (Paragraph 7 and the separate paper on DCMS and the Regions)

18. Comments on these proposals should be sent by Friday 2 October to Strategy Unit DCMS, 2-4 Cockspur Street, London, SW1P 5DH.

Email address:csrconsult@culture.gov.uk

Extra copies of this paper may be obtained from the DCMS Public Enquiry Unit at this address. Telephone 0171 211 6200. Fax 0171 211 6032

- Leadership

1. There are numerous organisations and individuals seeking to raise the quality of architecture, with a focus which ranges from value for money in crude cash terms to embellishment by public art, and from regulation of architects to awards for completed buildings. This variety is an advantage in providing a range of different approaches, but it results in a lack of coherence which suggests a need for a single body, designated as the focal point for the encouragement of good new architecture.

- Structures

2. Current structures have arisen mostly through local or narrowly-based initiatives. Various groupings have sought strength through drawing some of these strands together, but many have been shortlived and none has achieved secure national stature.

- Funding

3. Despite the huge sums spent on building work, particularly by Government and by the Lottery, the effort devoted to improving the quality of architecture remains small. There is a need to develop a structure which will provide sufficiently obvious benefits to attract secure funding from its beneficiaries. We would like to explore the potential for support from private and commercial enthusiasts for good architecture.

- Role of the Department

4. We would like to see the Department better able to give a strategic lead to each of the sectors which it sponsors, something which at present they lack. This should be accompanied by more clarity about the objectives on which public money is being spent.

5. Regulation of the architectural profession lies within the responsibilities of the Department of Environment, Transport and the Regions for sponsorship of the Construction Industry. DCMS has a parallel responsibility for encouraging quality of architecture, which can provide both economic benefits over the life of a building and value to the public realm in improving the quality of our built environment and the impact it has on our lives. Ministers see a need to develop this role, to create a Champion for Architecture.

- Objectives for Architecture

6. We want to encourage clients and architects to seek the highest quality of architecture; but we also want to see the general public acquire a greater interest in, and knowledge of, architecture so that they can play a powerful role in demanding improvements to our built environment. We are keenly aware that good architecture cannot be achieved by diktat, but will come only through education and encouragement of a climate in which our society expects the quality of its built environment to be improved. The Government, as a major client, should lead by example.

7. We believe that our objectives will best be achieved through a nationally recognised body or bodies which would continue the design review role of the Royal Fine Art Commission and provide modest financial support for a wide range of educational initiatives. It would be an advocate for high standards of architecture and act as a catalyst for the improvement of design criteria in public procurement. As it developed its role, it would provide a source of advice to Government, and encourage the pursuit of architectural quality among client bodies such as commercial developers, local authorities, housing associations and lottery projects. While such a body might, for practical operational reasons, be based in London, it would need a strong regional element either in itself or through associated bodies.

8. Since elements of this work are now done by the Royal Fine Art Commission, the Arts Council of England and the Department itself, there is a range of options for how they may best be taken forward in future. Each has its own advantages and disadvantages; each would allow the new capability to be developed from existing structures. We would welcome views on which should be adopted.

i. Retain existing bodies with improved liaison

This option would leave the RFAC responsible for design review, the Arts Council for promotion of education and public involvement, and the Department itself for strategic initiatives. Standing arrangements for liaison, which do not exist at present, could weld these three elements into a coherent force for the promotion of architecture.

There would, however, be inevitable inefficiencies in maintaining three organisations with closely related objectives, and the arrangement might be confusing to the outside observer. This could be particularly so at a regional level where a consistent and co-ordinated approach needs to be encouraged.

ii. An Advisory Council serviced by a Secretariat in the Department

The Advisory Council would be a high-profile body with a membership structure similar to that of the RFAC, carrying out the design review function and providing advice on other issues. The Secretariat would be a unit of the core Department, servicing the Council but also carrying out a range of other work to promote and support architecture including the grants now provided by the Arts Council. The Secretariat would need to develop relations with the Regional Architecture Centres and make arrangements for a regional element in the work of the Council.

There would be obvious strengths in having Ministerial influence standing directly behind this Council and Secretariat, and potential economies in combining the operational capability with advice to Ministers. However, great care would be needed to ensure that the review work of the Council was not only able to function independently of Government influence, but was also clearly seen to be independent.

iii. A closer relationship with the Arts Council of England

The Arts Council's Architecture Unit has tried to develop its profile on a limited budget, including organising the first Architecture Week in November 1997 and playing a part, through encouragement and some funding, in the establishment of Regional Architecture Centres. An advantage, not as yet fully deployed, is that it can work through the existing structure of Regional Arts Boards. Its Architecture Advisory Panel brings outside expertise to support the work of a small staff. This panel would need to be strengthened and probably renamed, perhaps as a 'Standing Committee on Architecture'; its Chairman would become the national champion for architectural quality.

There may be concerns as to whether there can be a strong independent voice within a much larger body whose main business is the distribution of grant-aid, with no regulatory functions. Some may feel that, while architecture is properly regarded as an art, it is different from other artistic disciplines in that the fundamental requirement is to deliver the practical needs of the client; thus architecture may always be seen as slightly peripheral to the core interests of the Arts Council and may risk being submerged beneath more traditional arts interests.

The process of reform already underway at the Arts Council means that in future a great deal more of the business and decision-making will be delegated from Council to executive units, advised by their Advisory panels. This should mean that a strong executive and Chairman will be able to maintain the independence which is essential to the design review function.

If this route were chosen, responsibility would shift in due course to the proposed new arts body, which will better balance visual and performing arts.

iv. A strengthened independent body

The Royal Fine Art Commission (RFAC) is, through its design review of major developments, a national arbiter of good architecture; and its seminars and studies help to provide guidance and encouragement on subjects of general design interest. It is sustained by the quality of the people who serve as Commissioners, among whom architects are the largest but not the dominant element.

In its present form, the RFAC has two weaknesses when viewed in this new light:

- It is primarily a London body. Though it reviews projects throughout England and Wales, it would need to develop a stronger regional dimension in order to become a truly national body. This might be done by close association with the Regional Architecture Centres, perhaps with the formation of Regional Committees in which Commissioners could be joined by representatives from the region concerned.

- It is primarily reactive. It would need to develop the proactive approach represented by its small programme of studies and seminars, taking on the grants now provided by the Arts Council, but still liaising with the Arts Council, the Design Council and other interested bodies to give a lead to the whole range of architectural interests.

If this option were adopted, we would wish to make some structural changes to the RFAC as it now exists, including probably a change of name to place the emphasis on 'Architecture' rather than on the rather misleading term 'Fine Art'. This option would not achieve a reduction in the number of quangos.

9. Whichever option is adopted, we believe that community involvement is an essential element in achieving sustained architectural quality. A start has been made in developing a network of Regional Architecture Centres, which provide a natural point for presentation of architectural issues to the general public. There is great potential here, but these centres are still isolated bodies with very limited funding, and the Network has no coherent strategy. We would like to see greater development of their potential as catalysts for good design in the regions.

10. We shall therefore want to see the Regional Architecture Centres playing a key role, participating in whatever regional cultural arrangements are put in place following our consultation on DCMS and the regions and working with the Regional Development Agencies to ensure that proposed developments are exposed to public comment and that they achieve high architectural standards.

11. Ministers believe that our built environment can be enriched by public art and by the creative thinking which artists can bring to building design. The new arrangements should therefore build on initiatives such as the Art for Architecture scheme, run by the Royal Society of Arts to encourage collaboration between artists and architects. It is likely that the core funding provided for this scheme will pass from DCMS itself to the new body.

12. We would welcome views on any of the issues raised in this paper but particularly on:

i. the designation of a nationally recognised body or bodies to promote high standards of architecture, incorporating the design review role of the RFAC. (Paragraph 7);

ii. the alternative options for carrying this forward. (Paragraph 8);

iii. the potential role of the Regional Architecture Centres (Paragraph 9-10); and

iv. the arrangements for taking forward initiatives such as the Art for Architecture Scheme. (Paragraph 11).

13. Comments on these proposals should be sent by Friday 2 October to Strategy Unit, DCMS, 2-4 Cockspur Street, London SW1P 5DH.

Email address: csrconsult@culture.gov.uk

Extra copies of this paper may be obtained from the DCMS Public Enquiry Unit at this address. Telephone 0171 211 6200. Fax 0171 211 6032

TOURISM

1. We estimate there are over 120,000 businesses in the tourism sector in the UK. These include hotels and other accommodation providers; restaurants, cafés, bars, pubs and clubs; a diverse range of tourist attractions, from theme parks to castles, from art galleries to zoos; tour operators, travel agents and transport providers. In 1997, total tourism spending in the UK was an estimated ,53 billion, comprising ,22 billion spent on domestic tourism day visits, ,15 billion spent on domestic holidays of one night or more, ,13 billion spent by overseas visitors whilst in the UK, and ,3 billion paid by overseas passengers to UK international carriers.

2. The DSR considered the role of the British Tourist Authority (BTA) and the English Tourist Board (ETB) and their relationships with Government, with Regional Tourist Boards (RTBs) and with businesses in the tourism industry; the adequacy of the existing structures for supporting the tourism industry, particularly in view of the establishment of Regional Development Agencies (RDAs), the Greater London Authority (GLA) and a Mayor for London, and the advent of devolution in Scotland and Wales; and whether any changes to the current structures could more effectively deliver policy objectives for tourism.

3. Since November, we have been working with the Tourism Forum and its working groups and with Departments across Whitehall to develop a new tourism strategy. The strategy, which will be published later this year, will set out in detail our plans for promoting quality tourism development which is economically, environmentally and socially sustainable, and which supports the Government's employment objectives and its wish to see a more inclusive society.

4. We have set out in general terms the current arrangements governing the relationship between the Department and its various NDPBs and sectors. To help address these issues in tourism, and ensure that public funds are used to best effect, we wish to

a. see the BTA develop further the effective promotion of Britain abroad, working in partnership with the private sector, with the national tourist boards of Scotland and Wales and, where appropriate, Northern Ireland, as well as with regional tourist boards in England. We support the efforts made by the BTA over recent years to develop more effective and consistent brands for Britain and its constituent parts; to harness images of a creative, forward-looking Britain to the traditional ones of heritage and pageantry; to respond to the advent of devolution by developing more effective, consultative arrangements for agreeing overseas marketing plans with the Scottish and Wales Tourist Boards; to support the development of regional overseas marketing consortia in England; and to target investment on those overseas markets that will produce the greatest return in terms of visitor spend in Britain. We intend therefore to provide BTA with some modest enhanced funding for the coming year, over and above inflation.

b. establish better structures for the support and coordination of tourism in the regions of England. We have welcomed the formulation by the ETB of clearer priorities for supporting English tourism and recognise that there is an essential national coordinating role to be carried out. We believe, however, that there are alternative structures, which could deliver a greater proportion of the available resources directly in support of tourism in the regions, whilst preserving the coordination of national programmes in support of the new tourism strategy; it is our intention that the funding for England tourism work should remain in place, whatever the outcome of the review of structures.

c. reduce the duplication of activities currently carried out at local, regional and national levels; and

d. establish effective means of coordinating and monitoring the implementation of the Government's forthcoming tourism strategy.

5. To deliver these objectives, we intend to look to the BTA further to improve its effectiveness and efficiency by

a. concentrating its active representation in key overseas markets, thereby increasing the resources it has available for proactive marketing, trade relations and visitor information in the most important overseas markets;

b. developing one-stop "Britain shops" overseas: where possible, co-locating BTA offices with the British Council or with our Embassies; and where there is no BTA presence, providing secondary Britain tourist information centres in British Council or similar premises (along the lines of a recent project in Prague);

c. bringing in private finance to boost IT investment in overseas markets;

d. restructuring its London-based marketing organisation so as to make it more responsive to market trends; and

e. restructuring the Board of the BTA so as to make it more responsive to the overseas marketing aspirations of England, Scotland, Wales and London.

6. We see the need to coordinate national programmes in support of the new tourism strategy. However, to ensure that funds are better deployed and the greatest possible level of resources is available for the regional support of tourism, we wish to consult on possible alternative structures for the delivery of English and regional tourism support. At present, the Department grants funds to the ETB, which in turn makes grants to RTBs. We believe that there are four possible options for replacing the ETB , and there may be others that arise from the consultation:

a. replacing the English Tourist Board with a new England-wide private company, limited by guarantee, which could contract with DCMS to carry out functions necessary for the consistent, coordinated implementation of the national strategy for tourism in England. It could also bid to contract out work to RTBs and other bodies. Separate funding would also be provided by DCMS for RDAs and the GLA to work with RTBs and other bodies to support tourism in the regions;

b. provide funding to a new consortium body of RTBs. This body could be a private company, limited by guarantee. Under this option, the consortium body would be responsible to DCMS for the delivery of programmes in support of the national tourism strategy and would provide funding to individual RTBs to work with RDAs and the GLA¹ to support tourism in the regions;

c. provide funding for the support of English domestic tourism directly to the RDAs and the GLA¹. Under this option, DCMS would set out broad objectives for the delivery of programmes in support of the national tourism strategy, and would lay down where consistency across the regions was required in the interests of a common national approach. It would then be for the RDAs to decide how best to use their resources, though we would expect them to contract much of the work to RTBs and other bodies; or

d. the Department itself, perhaps supported by a Committee drawn from the membership of the Tourism Forum, would be responsible for coordination of the delivery of programmes in support of the national tourism strategy and would provide funding directly to individual RTBs to work with RDAs and the GLA¹ to support tourism in the regions.

7. We take the view that there could be real value in the new lead body or bodies retaining the existing England marque, for use in marketing and quality assurance activities. We are also convinced that one of the key objectives for the new lead body or bodies should be to secure more effective cooperation between tourist boards and local authorities. Local authorities spend significant sums promoting tourism in their areas, and while some excel, there is evidence that others could be made more effective by pooling their resources into regional marketing partnerships and by more actively working in partnership with national and regional tourist boards.

 A new Watchdog

8. As part of the move towards a more strategic relationship between the DCMS and its sponsored bodies we will establish a tough new watchdog to monitor and improve standards of efficiency and financial management and promote quality across all our areas of responsibility. Although we propose to consult separately on the extent and nature of the watchdog's remit, our initial thinking is that it would have a role in relation to bodies in direct receipt of grant-in-aid, and second-tier funded bodies. It would review and report to us on performance in achieving standards set, meeting aims and objectives and efficiency targets. It would also be able to disseminate good practice and provide expertise to help maximise commercial opportunities. We hope that the watchdog would be able to start its work from April 1999.

9. Finally, we believe the Tourism Forum has been very successful in working in partnership with the Government to develop a new tourism strategy. We believe that the Tourism Forum could form the basis of the effective organisation which is now needed to work with and advise us on the coordination and implementation of the strategy.

10. The separate paper on DCMS and the regions notes that the Regional Tourist Boards represent the most important economic element of DCMS' portfolio and therefore of its regional presence. Decisions will be needed on their relationship with the proposed new cultural groupings.

11. We would welcome comments on any aspect of this paper but particularly on:

a. the proposals for increased effectiveness and efficiency on the part of the BTA (Paragraph 5);

b. the options for an alternative structure to the existing ETB (Paragraph 6);

c. whether the existing England marque should be retained (Paragraph 7);

d. how any new lead body might secure a more effective co-operation between tourist boards and local authorities (Paragraph 7);

e. whether the Tourism Forum can provide the basis for the organisation to work with and advise Ministers on the coordination and implementation of the strategy and, if so, what form that organisation should take (Paragraph 9); and

f. how the Regional Tourist Boards might relate to the proposed new regional cultural grouping (paragraph 10).

12. Comments should be sent by Friday 18 September to Strategy Unit, DCMS, 2-4 Cockspur Street, London SW1P 5DH. Email address: csrconsult@culture.gov.uk

13. We would be grateful if Regional Tourist Boards and trade associations were able to collect the views of their members and provide us with a single, representative response.

Extra copies of this paper may be obtained from the DCMS Public Enquiry Unit at this address.

Telephone 0171 211 6200. Fax 0171 211 6032

1. The present machinery for delivering film policy involves 3 Non-Departmental Public Bodies (the British Film Institute, the Arts Council of England, the National Film and Television School); three private companies to whom we provide financial support (British Screen Finance and the European Co-production Fund, the British Film Commission) and looser relationships with a number of other Government Departments, public and private bodies.

2. This complex map has arisen incrementally over time, and we have concluded that it is not ideal. There are two major issues. First, as highlighted by the recent Film Policy Review, the conclusions of which are set out in 'A Bigger Picture', while the BFI has a strategy for the promotion of film culture, there is no coherent programme for the development of the British film industry. And secondly, support in this area is currently provided through an ad hoc mixture of Lottery funding and grant in aid, by a number of bodies with separate strategies, with the result that there are overlaps and gaps in provision.

3. This area is a prime candidate for rationalisation, in order to

i. provide a focus for strategic leadership for the development of the film industry, and to eliminate gaps and overlaps

ii. allow greater flexibility in the allocation of resources so that it reflects priorities, and so that Lottery and direct funding are used in the most effective way

iii. streamline current structures in the interests of greater effectiveness and efficiency.

4. We have two interlocking objectives for film, broadly:

i. to help develop film culture by improving access to and education about the moving image;

ii. to help develop a sustainable domestic film industry.

5. We believe that these would best be delivered by creating a new body responsible for both, bringing together existing Government bodies and with a clear relationship with the relevant public and private organisations, both at national and regional level. In order to meet the film review's concern about plurality in the decision-making procedures, the body might need to delegate certain funding decisions to independent committees. For the purposes of this consultation paper we will call the proposed new body the "Film Council", but that would not necessarily be its eventual title.

6. The cultural objective is currently the province of BFI. BFI are conducting a fundamental review of their activities in order to focus their strategy much more on education and access, and have ensured that their plans mesh with these proposals. A Bigger Picture sets out a strategic framework for developing the industry from which the new body's objectives in this area would be derived. The key elements are:

i. the "lead body" function — monitoring of markets and industry performance, providing strategic guidance for the industry;

ii. increasing the commercial appeal of British films and encouraging the emergence of sustainable industry structures (ie support for development, production, distribution, and marketing);

iii. helping to ensure an adequate skill supply (of both creative and technical skills);

iv. facilitating exports and inward investment;

v. developing the audience for film.

7. This analysis implies a Film Council with two divisions of roughly equal importance, one concerned with film culture and the other with the development of the industry. The cultural and commercial objectives are closely linked and there would be close collaboration and synergy between the two divisions. In particular, policies on developing new talent and on broadening the audience would be relevant to both sides.

8. There would be three sources of support for the new body: grant-in-aid, Lottery funding, and commercial/sponsorship income (eg, as now, from BFI members). It would work with industry funding in delivering the strategy by providing a contribution to the costs of commercial filmmaking, distribution and marketing, and possibly by complementing the new industry fund recommended in A Bigger Picture.

9. As part of the move towards a more strategic relationship between the DCMS and its sponsored bodies we will establish a tough new watchdog to monitor and improve standards of efficiency and financial management and promote quality across all our areas of responsibility. Although we propose to consult separately on the extent and nature of the watchdog's remit, our initial thinking is that it would have a role in relation to bodies in direct receipt of grant-in-aid, and second-tier funded bodies. It would review and report to us on performance in achieving standards set, meeting aims and objectives and efficiency targets. It would also be able to disseminate good practice and provide expertise to help maximise commercial opportunities. We hope that the watchdog would be able to start its work from April 1999.

10. The new structure would have the following implications for the existing bodies:

- BFI functions — adjusted as necessary — would be subsumed by the Film Council and BFI would cease to exist;

- for British Screen, the objective would be to ensure that its strengths - expertise, entrepreneurial approach, closeness to the industry, ability to act independently — were retained, but that it was nonetheless genuinely a part of the new whole, in order to ensure strategic coherence between all the functions of the Film Council. In addition, the work of the British Film Commission would be brought within the overall umbrella of the Film Council. These ideas might entail changes to the current status of these bodies;

- the Film Council would take over Lottery funding for film from the Arts Council of England. It would be a distributor in its own right rather than a delegate of ACE;

- since NFTS is an educational institution, rather than a policy body, and its remit wider than film, it would retain its separate identity outside the Council, but we would ensure that NFTS' strategy was in harmony with the overall strategy drawn up by the Council.

11. We shall discuss with other relevant Government and private bodies how these should relate to the Film Council in order to deliver the most effective strategy.

12. We would like to establish the Council as quickly as possible in order to avoid loss of momentum in delivering the strategy set out in A Bigger Picture. We would aim to have the new arrangements in place by October 1999, and a shadow body in operation before that. It is being considered whether the Council should be established by Royal Charter, by setting up an interim company followed by primary legislation, or by some other route. It would need to have the capacity to operate commercially, which might mean a parent body/subsidiary company structure, or some other appropriate model.

13. We would welcome comments on any aspect of this paper but particularly on:

i. the proposal for a new Film Council to pursue cultural and industrial objectives for film (Paragraphs 5-8)

ii. the implications for existing bodies (Paragraphs 10-11)

iii. the establishment and constitution of the new body. (Paragraph 12)

14. Comments on these proposals should be sent by Friday 2 October to Strategy Unit, DCMS, 2-4 Cockspur Street, London, SW1P 5DH.

Email address: csrconsult@culture.gov.uk

Extra copies of this paper may be obtained from the DCMS Public Enquiry Unit at this address.

Telephone 0171 211 6200. Fax 0171 211 6032

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