More Scots cultural venues could be at risk of takeovers by multinational firms and private developers — including those with links to tax havens — as the “economic turmoil” in the UK takes its toll, politicians and campaigners have warned.
The Scottish arts scene is facing a turbulent financial situation in the aftermath of Covid-19 lockdowns and the midst of the ongoing cost of living and energy crises.
Analysis by The Ferret, as part of our Who Owns Urban Scotland series, found that the majority of cultural assets in Scotland’s cities remain in the hands of local councils and charities.
But others — including recognisable venues like the Edinburgh Playhouse, King Tut’s Wah Wah Hut, and Glasgow’s King’s Theatre — are owned by global companies with links to offshore tax havens.
With the spectre of venue closures hanging over the creative industries, experts told The Ferret that the trend of arts, theatre and music hubs being taken over by major investment firms — including some based offshore — “is likely to deepen over the next year or two of economic turmoil”.
Economic downturns such as the one currently being experienced in the UK “very often give rise to consolidation as large players sweep up the liquidated assets at low prices”, one argued.
The financial crisis in the arts industry has led to a series of doom-laden predictions about its prospects over the winter.
Creative Scotland — the Scottish Government body responsible for culture and the creative industries — claimed that up to a quarter of the 121 organisations it funds could be “insolvent in the next few months”.
Its chief executive argued that the current crisis is particularly bad for groups who have to spend a large percentage of their earnings on building costs, like energy and rent.
The Edinburgh Filmhouse has already been forced to close suddenly in October — with over 100 staff laid off — after the charity that ran it went into administration. The Edinburgh International Film Festival and Aberdeen’s Belmont Filmhouse also shut their doors as a result of the Centre for the Moving Image going out of business.
A petition is urging the Scottish Government and Edinburgh City Council to step in to save the Filmhouse. But there is also likely to be keen interest from private developers.
The administrators have said they expect a “high level of demand” for the venue which they describe as an “outstanding development opportunity within Edinburgh’s financial and cultural quarter”. Savills, the company tasked with selling the Filmhouse building, noted it is “suitable for a range of uses subject to achieving the relevant consents”.
The UK’s biggest cinema chain, Cineworld, filed for bankruptcy in the US in September prompting concerns about the future of its Scottish sites. Cineworld owns theatres including Edinburgh’s Cameo and Europe’s tallest cinema on Renfield Street in Glasgow.
ATG is the same firm, with links to Luxembourg and the Cayman Islands, which currently operates the Edinburgh Playhouse and Glasgow’s Kings and Theatre Royal.
Scottish Labour’s Paul Sweeney — an MSP for Glasgow — told The Ferret he is “completely opposed” to ATG’s takeover of The Pavilion and would do his “best to secure its future in local ownership”.
Sweeney echoed the view that the UK’s “imminent recession” will “probably see further venues put up for sale”. “If that does happen, we cannot be in a situation where the purchasers are based in tax havens, leaving our economy susceptible to the whims of private enterprise,” Sweeney said.
The threat of more Scots culture being snapped up by tax haven-linked private equity companies and pension funds has led some to question the Scottish Government’s commitment to building a so-called ‘wellbeing economy’.
Described by the SNP government as being “at the heart of our national purpose as a country”, the agenda is meant to ensure that economic decisions deliver improved health and wellbeing by “putting people and the environment at the heart of the economy”.
Philip Whyte, the Scotland director of the Institute for Public Policy Research, argued that some “high-profile successes and international recognition” in the arts sector have masked the fact that “countless” Scottish venues have “gone bust and closed down in recent years”.
“Closures don’t just harm our cultural success and reputation but also bring severe economic consequences for local communities,” Whyte said.
“The Scottish Government has a stated ambition to create a ‘wellbeing economy’, built on inclusive growth and community wealth building. That needs to see wealth not just being created in our local economies but retained there, too.”
The Scottish Government has stressed it does not have powers to prevent tax haven firms buying up land and property in the country. However, it has been criticised for continually underfunding the creative sector.
Creative Scotland has seen its core budget reduced by £13.1m in the last ten years. Spending on culture is expected to decline further next year, Holyrood’s culture secretary, Angus Robertson, has said.
A spokesperson for the Scottish Government told The Ferret that it “recognises the enormous pressures” faced by businesses during the current crisis.
They said: “We have been engaging, directly and through key business organisations, to best understand their needs and will continue to do so.
“Along with businesses we have repeatedly called on the UK Government to take urgent action – as it holds key policy levers to do so. That includes expansion of shortage occupation lists, a VAT reduction on energy bills, an extension of the Coronavirus Business Interruption Loan Scheme and other loans.”
Cover image thanks to jewhyte / iStock
All companies named as having tax haven links were approached.
Who Owns Urban Scotland is an investigation by The Ferret looking into the firms controlling Scotland’s towns and cities. Support our journalism by becoming a member for £5 a month at theferret.scot.