Today’s report: The Arts Council of Wales: Supporting Major Capital Projects, tests whether changes in recent years to the way the Arts Council runs its capital programme are both adequate and effective. It follows a report, issued in 2002, by the Assembly’s Audit Committee on the involvement of the Arts Council in the failed Centre for Visual Arts project. Since then, the Arts Council of Wales has made steady progress investing in arts facilities, through a rolling five year capital spending programme that reflects the Welsh Assembly Government’s strategic agenda. The Arts Council plans to spend some £16 million on capital projects over the next five years (2007-2008 to 2011-2012) - almost all going towards major building construction, refurbishment and upgrading projects.

The report notes that the Arts Council has well-established processes in place to assess and monitor its funding and exposure to risk. It applies consistent assessment criteria when selecting projects to sponsor, it monitors projects during construction and requires grant recipients to complete post project evaluation. It manages its spending against a background of fluctuating and uncertain Lottery income and faces a number of other challenges. For example, it co-funds major building refurbishment and upgrade projects with other bodies, such as local authorities, each with their own objectives, priorities and financial constraints.

A number of recommendations for further improvement are included. They state that the Arts Council should:

• establish strategic partnership agreements with key funding partners in the Assembly Government to improve knowledge of priorities and processes and to facilitate cooperation on projects;
• promote a standard method for grant applicants to use when analysing the sensitivity and uncertainties of key assumptions in their business  cases; and
• facilitate mentoring between grant applicants and successful recipients to improve the transfer of knowledge and experience about applying for capital grants, managing capital projects and sustaining arts activity.

Auditor General for Wales, Jeremy Colman, said today:

“I am pleased that the Arts Council has taken the lessons learned from early Lottery-funded projects and has introduced robust arrangements for supporting major capital projects. It is now delivering well on its objectives and by implementing my recommendations, such as strengthening cooperation with project funding partners and refining risk management practices, things will improve even further.”

Notes to Editors:

• This report examines whether the Arts Council is effectively managing the risks involved in supporting major arts projects (i.e. those projects awarded Arts Council capital grants of £50,000 or more) through its capital grants programme and associated support activities. It considers whether the Arts Council has robust arrangements for selecting major projects for its capital programme and whether its spending on major capital projects is adequately safeguarded.
• The report included a detailed review of 15 major capital projects which have had a share of the £39 million spent on funding major capital projects since 1999. These include: the Wales Millennium Centre; theTorch Theatre, Milford Haven; Theatr Mwldan in Cardigan; and the Ty Newydd Writers Centre near Criccieth – a former home of David Lloyd George.
• The Arts Council of Wales was set up in 1994 by Royal Charter. It is an Assembly Government Sponsored Public Body, responsible for funding and developing the arts in Wales. The Welsh Assembly Government provides it with grant in aid to fund the arts in Wales. It is also the distributor of Lottery money for the arts in Wales.
• The Wales Audit Office is independent of government and is responsible for the annual audit of some £19 billion of annual public expenditure and some £30 billion worth of public assets. Its mission is to promote improvement, so that people in Wales benefit from accountable, well-managed public services that offer the best possible value for money. It is also committed to identify and spreading good practice across the Welsh public sector.The Wales Audit Office was created in April 2005 through the Public Audit (Wales) Act, 2004, which expanded the functions of the Auditor General for Wales and enabled the transfer of staffs from the Audit Commission in Wales and National Audit Office in Wales to his employment.