A major contribution of new guidance, evidence and research on the economic value of culture and heritage
Visiting a free museum, walking past a historic building, going to a theatre: these activities bring enjoyment to many people, and are often supported by public funding. The presence of historic buildings and cultural facilities can also be important to local communities even if they do not directly use or visit them. However, the value that these activities and facilities generate has, historically, not been measured in a way that could influence government policy.
Simetrica-Jacobs, the PEC and Nesta have been working together to help build a practical evidence base to address this.
Today the Department for Culture, Media and Sport (DCMS) published the Cultural and Heritage Capital Framework, which sets out DCMS’ approach to the evidence base behind private and public investments in culture and heritage. This is supported by new studies by the PEC and Nesta with Simerica-Jacobs for Arts Council England (ACE) and Historic England (HE), and studies by Simetrica-Jacobs for DCMS and the British Film Institute (BFI).
This research has a number of benefits, it:
1. Allows cultural and heritage institutions to better demonstrate in financial terms the value they create for society using an approach consistent with the recommended best-practice methodology within government – the HM Treasury Green Book Guidance (2020). This enables the values to be applied in business cases and funding approaches to government.
2. Enables the benefits of culture and heritage that are not included in market prices to be captured in a way that accounts for the values they provide for both ‘users’ and the public as a whole. Failing to adequately value these wider benefits risks an underappreciation of the social value of culture and heritage, and hence under-investment in it.
3. Permits policymakers to assess interventions and investment decisions within the cultural and heritage sectors using accepted forms of policy evaluation such as Social Cost Benefit Analysis (SCBA) which should ultimately lead to a better and more efficient use of resources in the sector.
The project outputs being published are:
1. Guidance note and stakeholder interviews: Arts Council England
This project is aimed at supporting the sector to produce higher-quality evidence for central and local government, thus strengthening the case for funding in the cultural sector.
There are two outputs designed to aid the cultural sector in understanding and applying economic values into decision-making, funding calls, and CBA analysis:
- Guidance note – How to quantify the public benefit of your Museum using Economic Value estimates: This provides advice to museums on how to apply the estimated values users and non-users have for museums to their business cases with step-by-step instructions. It aims to provide a resource that helps museums measure and communicate the economic value of their institution in ways that extend beyond traditional measures such as Gross Value Added (GVA) and job creation. The valuation approach includes the value of the museum as a whole to both visitors and the local population that is not fully captured in commercial transactions.
- Interviews with the cultural sector: To understand the context of valuation in the cultural sector and inform the project, we carried out interviews with a wide range of representatives across the sector. A summary of which is being published today.
This work is ongoing and is now being extended to cultural institutions’ digital offer and to local museums, with subsequent guidance for these forthcoming.
2. Rapid Evidence Assessment (REA) for the UK Department for Digital, Culture Media and Sport (DCMS)
This project in association with Professor Giles Atkinson of LSE surveyed valuation techniques and estimated values for a range of cultural and heritage assets to inform government spending rounds and business investment decisions. It reviewed the valuation research undertaken inside and outside academia over the past 20 years. This provides a systematic assessment of what is known about the value of cultural and heritage assets and potential gaps. The assessment focussed on studies that employed economic approaches for monetary valuation of culture and heritage assets. Data science text-mining techniques were used to search for the most relevant literature. The results are presented within an Evidence Bank of economic values that includes valuation details, such as estimated monetary values for assets, a grading of each study’s quality, the article details, and an overview of each valuation method used.
3. Arts Council England: Regional galleries and regional theatres Benefit Transfer report
To estimate the values for regional galleries and theatres we designed surveys to collect data on the valuation for both users and non-users of sites (four sites each per artform) considered to be representative of this activity in regional cities outside London.
The gallery sites valued were the Baltic Centre for Contemporary Art, Gateshead; Lady Lever Art Gallery, Liverpool; Manchester Art Gallery and the Millennium Gallery, Sheffield.
The regional theatre sites valued were the Theatre Royal, Plymouth; Royal Exchange Theatre, Manchester; Leeds Playhouse and Birmingham Repertory Theatre.
To test the robustness of applying these values to other galleries and theatres we used Benefits Transfer (BT) techniques. These are an established statistical technique for assigning economic values to public goods which have no market price. It is commonly used in academic research to test the scope to apply values calculated for one set of institutions – in this case regional galleries and regional theatres – to other similar institutions (‘benefit transfer’). This allows additional valuations to be produced more efficiently at a reduced cost. We found that transfer error across the gallery and theatre sites surveyed is within accepted thresholds of error, providing confidence that the estimated values could be transferred to other comparable gallery and theatre sites.
Key finding: People value a visit to a regional gallery at an average of over £5, and value keeping their local theatre in their city at over £13 per year.
4. Historic England – Heritage and the value of place
To estimate monetary values for ‘everyday’ heritage sites, we surveyed local residents at case study sites across eight cities:
- Historic high streets in Industrial-era cities, based on four survey sites: Bolton, Churchgate / Deansgate; Huddersfield, King Street; Hull, Whitefriargate; Bristol, Corn Street/ Clare Street
- Historic high streets in Pre-industrial cities, based on four survey sites: Exeter, High Street; Lincoln, High Street; Norwich, Pottergate / Bedford Street; York, Stonegate
- Town halls, based on four survey sites: Bolton Town Hall; Exeter City Council (Guildhall); Huddersfield Town Hall; Norwich City Hall
- Central libraries, based on four survey sites: Bristol Central Library; Hull Central Library; Lincoln Central Library; York Central Library
We estimated how much people valued their local heritage assets in monetary terms. This contributes to an evidence base of values for different categories of heritage for use at local and national levels.
The study demonstrates that the investment in maintaining local heritage sites in good condition has a positive value to society. It focussed on the counterfactual scenario, in which respondents would either have to go elsewhere for these services or experience the heritage sites in a degraded condition. The study will help to inform Historic England’s ongoing investment decisions providing a set of values that can be transferred to comparable sites throughout the country by Government and the wider sector.
Key finding: Households on average value the historic character of their local high street at around £7.80 per year, and of their historic civic buildings between £5.73 and £7.67 per year.
5. The Value of Digital Culture: The British Film Institute (BFI) Britain on Film service
This study is an evaluation of Britain on Film (BoF) which offers curated film collections from the BFI National Archive and Regional and National Archives, launched in July 2015. It uses contingent valuation methods to measure the value people place on the films in BoF. We also assessed the range of values users and the general public have for BofF and the wider Unlocking Film Heritage archive programme through a contingent valuation study of around 2,500 users and non-users. This was in terms of a monthly willingness to pay a subscription/donation, and a combined annual WTP at the national level. We also tested how engagement with archive film collections is positively associated with subjective wellbeing.
Key finding: Users of the BFI’s free ‘Britain on Film’ portal, which provides stories of UK life through the history of film, valued this service at over £3 a month.
Conclusions
The reports published today mark an important turning point in quantifying the value that cultural and heritage institutions bring to society (their cultural and heritage capital). They apply techniques developed in environmental and cultural research to estimate the values these activities and institutions create that do not have natural monetary measures. They help to fill existing gaps in the evidence base, such as the value of visiting free museums, local historic buildings, and cultural services such as theatres and film archives.
From this work we are starting to produce guidance in applying these values in business cases and funding decisions starting with museums. This will be extended to other types of cultural sites later in the year, while continuing to explore the implications for central government decision-making when applying these values in social cost benefit analysis .
With large parts of the culture and heritage sectors unfortunately closed due to the effects of Covid-19, there has never been a more important time to understand the value of culture and heritage for all of us.
If you are interested in knowing more about research from the PEC, Nesta, and Simetrica-Jacobs’ in the culture and heritage sector please contact Dr Ricky Lawton at r.lawton@simetrica.co.uk and John Davies at john.davies@nesta.org.uk.
Published 21st January 2021
Lead photo by Lorna Simpson of The Baltic Centre for Contemporary Art in Gateshead, England.
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