11 Review Of The Australia Council: Australian Government Response

The 2012 review of the Australian Government’s major arts funding body the Australia Council by Angus James and Gabrielle Trainor made 18 recommendations for reform to ensure the Australia Council is best-placed to respond to the arts and culture sector of today and into the future.

 

REVIEW RECOMMENDATION 1

The Review finds that Nugget Coombs’ original vision for the Council is still relevant but needs to be updated to reflect the Council’s place in a 21st century Australia and a contemporary arts sector. It must be communicated clearly, and be used to inform the Council’s Strategic Priorities and Key Performance Indicators, that are agreed to by the Minister for the Arts. The measure that is implicit in this vision is that of ‘excellence’, and this continues to be the Council’s benchmark for the work it supports.

The Review recommends that a new purpose for the Council be expressed as follows:

To support and promote vibrant and distinctively Australian creative arts practice that is recognised nationally and internationally as excellent in its field.

This purpose should be supported by four principles for the Council. These are to:

  • support work of excellence, at all stages of the artistic life cycle;
  • promote an arts sector that is distinctively Australian;
  • ensure that the work it supports has an audience or market; and
  • maximise the social and economic contribution made by the arts sector to Australia.

The purpose should also be supported by a clear statement of its functions under its legislative mandate, which would include:

  • to administer and measure the impact of funding to artists and arts organisations in a manner which achieves high accountability standards;
  • to undertake and commission research and advocate for Australian arts to promote the sector and to better inform policy decisions; and
  • to support and promote professional development and cultural leadership in the Australian arts sector.

GOVERNMENT RESPONSE: AGREED IN PRINCIPLE

The recommended purpose for the Council preserves the important principle of making decisions on grants at arm’s length from government and sets out a clear and contemporary statement about the Australian Government’s goals for Australia’s arts sector in the 21st century.

The four principles which sit under the new purpose provide guidance for how implementation of the Council’s purpose should be measured and reported on. This will assist to give clarity about the Council’s activities, both to the Australian Government and the arts sector.

The Council’s purpose will be defined by the functions drafted for incorporation in the Council’s new enabling legislation.

It is important to note that while the Government endorses the broad direction of a high level strategic plan, the Government plays no role in determining the allocation of funding across genre or artform or deciding individual grants.

 

REVIEW RECOMMENDATION 2

This statement of purpose should be supported by a three year Strategic Plan, agreed with the Minister, which defines the KPIs against which the Council should be measured.

GOVERNMENT RESPONSE: AGREED

The strategic planning obligations of Commonwealth statutory agencies are set out in their enabling legislation. Consistent with this practice, the Council’s new enabling legislation will require it to prepare a strategic plan at least once a year, with the plan to cover up to a period of up to four years. The strategic plan will be required to set out:

  • The objectives the Council will pursue in the performance of its legislated functions;
  • The strategies and policies that the Council will adopt to achieve those objectives;
  • Performance indicators for assessment of the Council’s performance of its functions;
  • The investment and financing programs of the Council, including strategies for managing financial risk;
  • The financial targets and projections for the Council;
  • An analysis of factors likely to affect achievement of targets or create significant financial risk for the Council or for the Commonwealth; and
  • A review of performance since the start of the year previous to the year in which the plan is prepared, measured against the most recent plan for any part of that period.

The Council’s strategic plan must be given to the Minister for his or her endorsement before the start of the period to which the plan relates. The Council will be able to vary the strategic plan as required, and in doing so would seek the minister’s approval of any variation.

 

REVIEW RECOMMENDATION 3

The Review recommends that the Council work to remove duplication through the merger of the Australia Business Arts Foundation (AbaF) and the Artsupport program as recommended by the Review of Private Sector Support for the Arts undertaken by Mr Harold Mitchell AC in 2011. However, this Review recommends the merged functions should sit within the Australia Council, subject to the resolution of the taxation issues surrounding transfer of the Australia Cultural Fund which is administered by AbaF.

GOVERNMENT RESPONSE: AGREED

As announced in the 2012-13 Budget Papers, the Government has agreed to amalgamate AbaF and Artsupport. In February 2013, the Government launched the new merged agency, Creative Partnerships Australia, a one-stop-shop for the encouragement of private giving, social investment and philanthropy for the arts. CPA will also explore new models of support for the arts and build partnerships between artists, business, private donors and the community to support the arts.

 

REVIEW RECOMMENDATION 4

The Review recommends that the Council and the Office for the Arts undertake a joint program audit. This audit would take account of the Council’s new purpose and apply the excellence versus access filter to current programs. The agreed program split would then be the subject of sector consultation, before implementation.

  • The Council is best placed to focus its resources on supporting and recognising excellence in Indigenous arts practice and Office for the Arts is best placed to support access to Indigenous arts practice, with its attendant, wider social and economic objectives, in community.
  • A similar principle to that above may also apply to community arts projects.
  • The audit must include assessment of touring programs. The Council should administer those programs which focus on work of excellence and Office for the Arts on those which promote access to artistic product.
  • Service delivery, wherever possible, should be devolved to the sector.

GOVERNMENT RESPONSE: AGREED IN PRINCIPLE

The Government notes that a joint program audit has been completed which will be  updated based on the Council’s new Act, on the basis that this legislative mandate is the filter through which Council’s role and program delivery is determined. The Council and the Office for the Arts will work together to ensure clarity for applicants about which agency – either the Council or the Office for the Arts – they should apply to for funding.

On 22 August 2012, the Government announced the transfer of six programs from Office for the Arts to the Australia Council – Playing Australia, Visions of Australia, Festivals Australia, Contemporary Touring Initiative, Contemporary Music Touring Program and the Visual Arts and Craft Strategy.

The decision to transfer the administration of these programs to the Australia Council has been taken in the context of the wide-ranging discussion and consultation about the future of arts and culture sectors undertaken to inform the development of the national cultural policy and the Review of the Australia Council.

The transfer of programs will contribute to delivering on the goals of the national cultural policy—it preserves the principles of arm’s-length decision making and peer review in relation to arts funding; it consolidates most Australian Government arts funding with the Australia Council; and it will improve the service to the arts sector by providing the sector with a single source of funding with consistent application and reporting processes.

The Office for the Arts will work with the Council to ensure the seamless transfer of administrative responsibility for these programs in order to cause minimal disruption for current grant recipients and applicants for current funding rounds.

 

REVIEW RECOMMENDATION 5

The Review recommends that the Council work to grow the Council’s linkages. The Review:

(a) concludes that the Council has a clear and important role in supporting professional development in the arts sector as part of its remit to support works of artistic excellence. To this end, the Review recommends the Council become a member of the Australian Roundtable for Arts Training Excellence in order to engage more directly with the national Arts Training Organisations. The Council’s support in the professional development area should extend to supporting strategic initiatives in the sector as well as specific programs of support. Particular initiatives identified through the Review’s consultations for further investigation include:

  • the development of a ‘mentor bank’, matching expertise (both artistic and administrative) in major and key organisations with small-to-medium organisations in need of professional development assistance, and
  • an information portal providing information on jobs, training, education and professional development opportunities for young and emerging artists, especially those that support business development and management  and cultural leadership in the arts context.

(b) recommends more regular and formal dialogue with other arts agencies, especially the national collecting institutions, to promote collaboration and to better leverage the role and value of the collections as part of the sector; and

(c) recommends the Council diversify its approach to investing in international engagement and cultural exchange, with a sustained emphasis on the Asian region.

GOVERNMENT RESPONSE: AGREED

The Government agrees that the Council must work to expand its linkages both across the Australian Government arts portfolio and with government arts agencies in the state and territory governments.

Implementation of this recommendation will be the responsibility of the Council’s Governing Board. The recommended activities will need to be considered by the Board in the development of its new strategic plan.

The Board will also be required to identify a process for more regular and formal dialogue with other Australian Government arts and cultural agencies as part of its planning development process.

 

REVIEW RECOMMENDATION 6

In order to facilitate implementation of the new purpose for the Council, the Review recommends that the Australian Government provide additional funding of $21.25 million per annum to the Council to cover current funding pressures and changes to its purpose as follows:

  1. Research and Advocacy—the provision of this additional funding will be tied to a Key Performance Indicator as agreed with the Minister. Funding is to be used by the Council to develop a detailed and systematic data collection program for the benefit of the Australian Government and the sector as a whole (much the same as that undertaken by Screen Australia, including an annual ‘state of the industry’ report). Additional funding of $1 million per annum would enable this work to take place.
  2. The Council to act as a funding generator —the Council’s role in developing funding to the arts from the sector could be enhanced through the addition of a ‘commercial’ funding program allowing the Council to develop new models of funding for the sector, such as micro-loans and matching programs. Additional funding of $3 million per annum would enable the Council to establish a pilot program rolling out new models of funding.
  3. Major Performing Arts contestable fund—top-up funding to the Council of $1.25 million per annum as the Australian Government contribution to establish a $2.5 million excellence funding pool available to Major Performing Arts organisations on a competitive basis, to reward outstanding performance in fulfilling Major Performing Arts goals with criteria to be determined as part of the opening up of the Major Performing Arts organisations to broader peer review.
  4. Unfunded excellence—as discussed above, the Council has identified significant levels of unfunded excellence among its current application base. On the basis of estimates that unfunded excellence for the Council is about $15 million, this Review proposes top-up funding of this amount to meet this growing gap in the sector.
  5. Professional development—the Council has an important role in building the professional capacity of the arts sector. Funding of $1 million per annum will assist the Council to develop, in collaboration with training and development providers and private sector mentors, formal programs of professional development for arts sector managers and cultural leaders. This will also fund the investigation and early development of an arts careers information portal and a mentor bank to provide opportunity and expert support for those who work in the sector.

GOVERNMENT RESPONSE: AGREED

The Government agrees to the provision of additional funding to enable the Australia Council to carry out its new purpose and functions, and to meet existing needs.

Specifically the Government will provide $75.3 million over four years commencing from 2013–14 for this purpose. This includes:

  • $1 million per annum to develop and implement a detailed and systematic data collection program for the benefit of the Australian Government and the sector as a whole.
  • $1.25 million per annum to harness excellence in the major performing arts companies and allow them to address strategic priorities of national significance, with the funding to leverage additional matched funding from state and territory governments;
  • $15 million per annum as additional funding across a range of art forms to address an identified significant level of ‘unfunded excellence’ among the Council’s current application base for established, emerging and hybrid art forms; and
  • $1 million per annum to build the professional capacity of the arts sector through training and development of providers and private sector mentors, formal programs of professional development for arts sector managers and cultural leaders, and the investigation and development of services to support employment and careers in the arts sector.

The Government also agrees to provide new funding to support ‘commercial’ funding programs that will develop new models of funding for the sector, such as micro-loans and matching programs. However, as these programs fall within the scope of responsibilities of the new private sector support agency, Creative Partnerships Australia, funding support for these initiatives will be addressed through the Government response to the Mitchell Review. Any further funding for the Council will need to be considered in the context of future budgets.

 

REVIEW RECOMMENDATION 7

The Review recommends that, in order to provide the Council with increased funding flexibility, the Australian Government pursue with the states and territories the opening up of the MPA Framework to allow for competitive funding based on peer review.

GOVERNMENT RESPONSE: AGREED IN PRINCIPLE

The Australian Government notes that peer review provides a mechanism for informed evaluation and assessment of artform specific funding applications which can be effective in helping to enhance artistic standards and competitiveness.

The Major Performing Arts funding framework, agreed to by the Meeting of Cultural Ministers in August 2011, outlines a commitment by all governments in Australia to fund the 28 Major Performing Arts companies. This framework outlines incentives to encourage and reward artistic success.

Any change to the existing or future frameworks will take place in negotiation with state and territory governments.

 

REVIEW RECOMMENDATION 8

To arrest the erosion of the Council’s funding base, the Review also recommends exempting the Council from any further application of the efficiency dividend.

GOVERNMENT RESPONSE: NOTED

Australian Government policy is that all agencies, with few exceptions, are subject to the annual efficiency dividend, which is designed to improve administrative efficiency by Australian Government agencies. Any request for exemption from the efficiency dividend will need to be considered in the context of future budgets.

 

REVIEW RECOMMENDATION 9

The Review recommends that new enabling legislation for the Council clearly provide for a conventional, skills-based Governing Board. The new Act should limit membership of the Board to nine, with all appointments made by the Minister after receiving advice from the Chair. The Chair should be appointed by the Minister. The Board should be composed primarily of people with a deep experience in and passion for artistic practice who can bring a balanced blend of skills and expertise to the Council and through it, to Australia’s cultural life. 

GOVERNMENT RESPONSE: AGREED

The Government agrees that the introduction of a more conventional Board structure as recommended by the Review will assist the Council to improve its strategic planning and governance processes, and will more appropriately meet its long-term operational needs. This reform will be complemented by the reform of the Council’s administrative structure as recommended by the Review. The Government will consult with the Council regarding the appropriate skills mix required for the new governing board.

 

REVIEW RECOMMENDATION 10

The Review recommends that this new Board set its direction and develop its vision with management through its strategic planning processes. Its Board sub-committees (for example, Audit, Finance, Risk, Nominations) should operate to contribute to the governance of the organisation but not to approve funding or dictate the Council’s strategic priorities.

GOVERNMENT RESPONSE: AGREED

The Government supports a standard governance approach across agencies governed under the Commonwealth Authorities and Companies 1997. Recommendation 10 is in line with such an approach. 

 

REVIEW RECOMMENDATION 11

The Review recommends that the CEO should be appointed by the Board following consultation and agreement with the Minister.

GOVERNMENT RESPONSE: AGREED

Recommendation 11 brings the Council in line with more contemporary legislation for agencies governed under the Commonwealth Authorities and Companies 1997. Consistent with good governance arrangements, the CEO will be accountable to the Board.

 

REVIEW RECOMMENDATION 12

Sector Advisory Panels, which would be the principal agents for engagement with the artforms and custodians of artform practice within the sector, should support and inform the work of the new Board and management, as directed by that Board. Specifically, the Panels should provide sectoral expertise and advise on and inform the Strategic Priorities of the Board. The Board may constitute any number of Advisory Panels and determine their mandates based on the needs of the Board in developing and executing its Strategic Priorities. It may conclude the activities of any Panel as it sees fit.

GOVERNMENT RESPONSE: AGREED

Implementation of recommendation 12 will ensure that artform expertise is available to advise the Council’s new Governing Board and to inform its strategic directions.

 

REVIEW RECOMMENDATION 13

A new governance structure for the Council should be put in place that allows for clear lines of responsibility and function for the Board and executive under the Minister, in consultation with Office for the Arts. New operational structures for the Council’s executive and staff may flow from the implementation of this model.

GOVERNMENT RESPONSE: AGREED

The Australian Government agrees to the implementation of a new governance structure for the Council including clearer lines of communication between the Governing Board and the Government. Implementation of the new governance structure will be subject to consultation as recommended below, and will ultimately be a decision for the new Governing Board.

 

REVIEW RECOMMENDATION 14

The Review recommends that a new model for grant allocation be implemented that:

a)  Replaces the standing Artform Board structure with a general stream for grant applications across all artforms; and

b)  Maintains the centrality of peer assessment but promotes flexibility and breadth by adopting, but adapting, the model employed by the Canada Council for the Arts that allows for more peers to become involved in assessment and thereby diversifying the mix of peers.

GOVERNMENT RESPONSE: AGREED IN PRINCIPLE

The Government agrees with the broad principles contained in the grants assessment model recommended by the Review. The Government agrees that the Council should adopt a flexible approach to providing peer‑assessed grants funding to the sector which enables it to change and adapt the manner in which it receives and assesses applications for funding in future.

 

REVIEW RECOMMENDATION 15

To support these reforms the Review recommends a new operational structure for the Council which would cover key areas recommended by the Review. These aspects of the Council’s recommended governance structure are included to show how the Board and Executive would interact, especially noting the role of the Sector Advisory Panels.

GOVERNMENT RESPONSE: NOTED

The Government notes the suggested operational structure. However, implementation of this recommendation will be the responsibility of the Council’s Governing Board.

 

REVIEW RECOMMENDATION 16

The Review recommends community consultation to inform the Council’s finalisation of its new operational structure.

GOVERNMENT RESPONSE: AGREED

The Government agrees that the Council should undertake community consultation on implementation of recommended changes to its organisational structure, and encourages the Council to do so. Implementation of this recommendation will be the responsibility of the Council’s Governing Board.

 

REVIEW RECOMMENDATION 17

The Review recommends development of an entirely new Act for the Council, based on the templates provided by the enabling legislation for the National Film and Sound Archive of Australia and Screen Australia, for introduction to Parliament in the 2014–15 financial year. The new Act should do the following:

a)     preserve the principles of operation at arm’s length from government, and peer-based review of funding decisions

b)     require the development of a Strategic Plan for every three years, updated annually in the Budget context and agreed by the Minister

c)     provide for a new Board for the Council, made up of nine members all appointed by the Minister in consultation with the Chair (who will be appointed by the Minister alone). The Act must allow for the appointment of Board members with appropriate skills to meet the Council’s governance needs as well as having strong and demonstrated knowledge of the arts sector.

GOVERNMENT RESPONSE: AGREED

The Australian Government agrees that new legislation is required to enable reform of the Council’s governance and administrative structures, and to implement its new purpose as recommended by the Review. New legislation will provide the Government with the opportunity to ensure significant and lasting reform of the Australia Council. Timing will be subject to Parliamentary processes.

 

REVIEW RECOMMENDATION 18

The Review recommends that the Chair’s mandate be to consult further on the proposed changes, specifically through exposure drafts of the new Act and prepare the organisation for the new Act’s implementation as well as facilitate and drive the transition.

GOVERNMENT RESPONSE: AGREED IN PRINCIPLE

It is the Government’s role to prepare legislation and consult with the public as appropriate. It will be important for the Chair of the Council to be actively involved in these consultations and provide feedback to the Government on the views of the arts sector. The form of the final legislation will ultimately be a matter for the Parliament.