Local Government and Music – a Venue Perspective

by Scott O’Hara. Published in Music Forum magazine, Vol 19 Issue 2 (February 2013) 

A colleague once suggested this metaphor to explain how governance in local government really works. Imagine that all the residents of your local government area are on a rocketship travelling towards an unknown destination nominally referred to as ‘the future’. The rocketship has a professional crew who have been hired because of their professional expertise in all of the things that need doing on the ship. They know what needs to be done and how to do it. They are not, however, in charge. What happens is that once every four years a ballot is held among the passengers to elect a group of 12 representatives who will be the decision makers, responsible for every decision about the course and operation of the rocketship for those four years. At the end of those four years, those 12 positions are re-elected.

This metaphor quite nicely reflects the main complaint that people working with local government tend to have, that Council as an entity often seems to work at cross-purposes with itself, or at least with other parts of its wide range of responsibilities. It is not a single entity at all, and at the end of the day, the ‘commonsense’ decision making of those selected from its own community is the main driving decision making force, although as in any modern democracy, that can be directed towards the main aim of re-election rather than the common good.

Plenty has been written in this journal over the years on a Council’s role in the music industry through planning controls, decisions and in regulations. What is often overlooked is the contribution that a great many Councils make directly in music. It is generally well known that Councils are a major funder of arts and cultural activities. What is less recognised is that a very significant proportion of this funding is provided in the form of performing arts venues, usually utilised at least in part for music.

According to the Australian Performing Arts Centres Association, 78% of all such centres are owned by local government, with 90% of those (and thus 70% overall) being also operated by the Councils which own them.[i] Their figures also show that more than half of the capital funding for these facilities comes from local government, and that Councils provide nearly a quarter of their total operating budgets in direct funding, i.e. in addition to earned income and other sources. The total value of the annual local government contribution is just over $36.5million, while state and federal government operational funding for these facilities is less than 7% of the total, a combined $10.5million[ii].

It should be borne in mind that while running any music venue is generally speaking a frightfully expensive proposition, in most commercial settings there is at least the prospect of recovering your outgoings. This is generally not the case for council owned facilities which usually have at least in part a community facility remit. The vast majority of people utilising such venues as community groups, hirers and even audience members tend to have quite a limited capacity to pay. Moreover, many users of a venue owned by their local government authority see it as local community infrastructure and therefore something they shouldn’t have to pay for, or perhaps as something that they have already paid for through their rates. So there is a constant struggle between the costs of operating a venue such as this and what the hirers and audiences are willing to pay.

Councils and other authorities tend, at least initially, to create and operate these facilities for the ‘right’ reasons. They may have a community cultural plan that sets out the needs of the community and how the operation of these facilities will service those needs. When it comes to evaluating the performance of a facility, however, the massive costs involved means that the focus tends to revert to simplistic assessments of ‘how many people came?’ and ‘how much did it cost?’ to provide the venue.  

As a result, the most ‘sustainable’ Council run venues tend to be those with good attendance figures, as the more people attending against the base operating costs, the lower the net subsidy per head that the Council is paying. The combined figures for the APACA members who responded to the 2011 survey indicate that $5.17 per attendee is paid by local Government as a subsidy. Venues seem to be more likely to be evaluated against these kinds of quantitative measures than against qualitative issues such as the benefit they provide to the community, how well they meet the cultural needs of their community, what kind of experiences they provide and so on.

Does that matter? Well yes, very much so when you consider that there is a massive capital outlay and considerable commitment required from councils in the first place to create these facilities, and that good attendance versus cost ratios are very, very difficult to achieve for a new facility. The reasons why the venue was created and how well it is doing in addressing those needs and progressing those agenda can get lost very early in the process. Councillors, senior management, and even the community themselves can quickly want to distance themselves from the facility which may represent a political liability for its creators in the short term. Repeated instances of this and associated negative media coverage in turn make it all the harder for other local government authorities to turn their aspirations into venues in the first place.

The story can be equally as depressing for areas where a facility has been around for a long time. A twenty or thirty year old building can easily be taken for granted, and its faults accepted as the way things are. If the net cost to the owner per visitor ratio is low, then this is probably enough to convince decision makers that all is well, and the facility can be left alone – with no real examination of whether or not it is meeting the needs of users well, if there are swathes of non-users whose needs cannot be met by the facility in its current form, and what the future may hold for the community and its facility. The situation is worse if the net cost per head is high, because regardless of those qualitative issues, the building will be seen as a liability and excessive cost that the owner should be looking to divest itself of. Even more difficult, however, are the councillors who just don’t get it. They may see a $2.65 per visitor net cost to the council as unsustainably high, regardless of the fact that it is half of the national average. To be fair, if there are 150,000 visitors to their facility each year that translates to an annual direct cost to the Council of $400,000 so that is a large amount if considered on its own, without the benefit it provides.

So why do Councils build and manage these kinds of facilities to begin with? Usually it is because there is no other suitable infrastructure in the area, and there is (or at least was) a perceived need for a venue. This may be, for example, to provide a performance and/or rehearsal venue for particular groups in the community, or to provide access to arts and entertainment experiences that would otherwise not be available to residents. Once it is created, however, the operator is then left with the challenge of seeing the venue utilised, appreciated, and hopefully not too expensive to run.

This challenge is normally set in an operating environment where the Council itself is primarily driven by wanting to keep costs as low as possible, or perhaps wanting to see a financial return on capital investment, and where potential hirers have limited means. Add to this that audiences often tend to operate at a lower price point at a Council venue than at commercial (and often more salubrious) venues, and are often attracted to low cost entertainment offers at highly subsidised venues within clubs. Council owned venues also often need to somehow balance providing participatory experiences – local schools music activities, dance schools for their end of year performances, community music groups which get significantly discounted access to the facility in order to perform and so on, with attracting paying audiences to commercially viable programming without negatively impacting local or nearby businesses. Just for good measure, these venues often serve as a civic venue as well – that means hosting events for the Council itself which generally results in days that the venue is unavailable for those other uses, and no revenue is generated to assist that all important cost per head ratio.

So what does all this mean? It means that if there is a local government authority owned venue in your area, then you might consider yourself fortunate – in many places there aren’t, or used to be, or even never will be. Regardless of its potential shortcomings, consider this: that venue was created because local musicians and local audiences needed it. So if you aren’t currently engaged with it, consider how you might be. Also consider thinking about how it benefits the community – or could if it were just improved a little bit…and let your local councillors know.