Theatre Critic and Journalist

After the Bubble Bursts: A Case Study

After the Bubble Bursts: A Case Study

Published in The Stage, 31.03.2011

Is there life after subsidy loss? Next Tuesday, Arts Council England will announce its new National Portfolio Organisations. Around 750 of the 1,333 applications will be successful. Of almost 600 unsuccessful organisations, it is estimated that more than 100 will be former Regularly Funded Organisations. With the minimum amount of revenue funding increasing by £10,000, many of these will be smaller organisations unable to justify an annual subsidy of at least £40,000. However, larger organisations are in no way immune.

In December 2007, London Bubble was one of nearly 200 arts organisations notified that its regular Arts Council funding would be completely withdrawn. That meant the loss of £420,000 each year, over 50% of the company’s annual income. Having received such funding since 1972, the company had just four months to concoct and implement plans for survival, while simultaneously appealing against the decision.

“We thought we were in with a chance of overturning the decision,” explains Jonathan Petherbridge, London Bubble’s Artistic Director and Chief Executive, “or possibly not losing 100%. We didn’t. We lost, so £420,000 went overnight. We did think that was it. We didn’t think we’d be able to continue.”

To make matters worse, a further annual grant of £88,550 was discontinued shortly afterwards after a change in London Councils’ funding structure. London Bubble had lost 79% of their average annual funding – 65% of their average income (£775,742)  – for the previous three years.

If there is cause for optimism, it is that London Bubble still exists today. Last year, it delivered 608 events – the most since 2006 – and surpassed that year by reaching 13,017 audience members and participants. Annual turnover will be back above £500,000 by the end of March and, for the first time since the cut, Petherbridge expects the company to break even.

Having issued redundancy notices immediately after notification, eventually downsizing its staff of ten to three, the company have also just employed a full-time administrator. Petherbridge chuckles, “We’ve grown.”

The truth, of course, is not so Panglossian.

London Bubble is not the same company that it was in 2007. In the wake of ACE’s notification, the company drew up five alternative structures. “We went for a model that we call Creative Theatre, which is based on the principle that theatre engenders creativity. That model is predicated on sustaining the participatory work, sustaining the work in education and cutting back on the performance work.”

Previously, London Bubble produced two professional shows a year; a summer promenade that toured London and a Christmas show. In the two years before losing ACE funding, the company gave 193 performances. Over the following two years, there were 68, only 18 of which were performed by professionals. Audience figures dropped by more than 15,000. At the same time, London Bubble’s catchment area shrunk from 17 boroughs to three: Southwark, Greenwich and Lewisham. These changes may account for the rise in events, workshops being both cheaper and less time-consuming than performances, particularly when touring costs are reduced.

This is not necessarily a bad thing. Rather, it represents a shift in the company’s focus. “We’re a micro-company now,” Petherbridge explains, “We work with a small number of people, but the quality of the work, the quality of the relationship with those people, is absolutely critical.”

“What we’re valuing is the relationship as opposed to the product and we’re valuing our relationship with the audience as opposed to with the Arts Council.” As he’s quick to point out, that aligns them with a cultural policy that emphasises local community and independence.

With the reduction in public performances, income earned through charitable activities has, inevitably, fallen. Between 2006 and 2008, such income averaged £119,746 a year. In 2008/09, that figure was £13,067, rising to £66,291 last year. However, money has been raised elsewhere. Rental of space and other assets, which accounted for £467 five years ago, earned £22,709 last year. They also sold 283 stakes, at a minimum of £20 each, in their 2009 summer production as part of their Fan Made Theatre initiative. ‘Stakeholders’ can propose a show-title or idea, five of which are selected by a panel and subject to a public vote.

However, subsidy still accounts for 40% of London Bubble’s income. The geographical concentration of the company’s activities means that funding from local authorities has more than doubled since 2008, rising from around £50,000 to more than £120,000 each year. Of course, with across-the-board cuts, local arts budgets are under threat.

A major difference is the proportional balance of restricted and unrestricted funding. Public revenue funding makes up around 10% of total income, while project-specific or restricted funding accounts for 30%. This year, however, London Bubble has raised a further £155,000 of unrestricted private donations, more than ever before. Petherbridge hopes that next year this will surpass £200,000, but he’s still reluctant to describe the company as more robust: “If we lost one of our big supporters, even though they don’t put in as much, proportionally, as the Arts Council did, that could be hard. It’s touch and go.”

The point is that such evolution needs time and firm foundations. Petherbridge is adamant that other organisations would not have survived to adapt: “If we’d have been going for a year, doing what we did, and were cut, none of this would have happened. I don’t believe that the Arts Council cut London Bubble to turn it into a lean, mean modern theatre machine. I think the intention was to finish the company’s work and distribute that money to other organisations.”

Of course, a little luck also helps.

Even with a transitional ACE grant of £130,000 and further one-off grants totalling £46,000 from Lewisham and Southwark councils, Petherbridge’s calculations placed London Bubble almost £90,000 adrift. “A week after the cut, the phone rang and it was the Charities Aid Foundation, dispersing money from the ITV phone-in scandal. We got £89,000 absolutely out of the blue.” Careful management of these reserves have allowed London Bubble the time to restructure towards sustainability.

In the current wave of cuts, even with a year’s notice, those organisations facing complete withdrawal of funding will struggle to build a comparable fund. Nonetheless, London Bubble’s resilience and resourcefulness leaves room for hope.

Photograph: London Bubble

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