When Sarah Munro was first appointed director of one of Britain’s biggest art galleries, the Baltic Centre for Contemporary Art, she would joke about sticking a tidal mill on its side to make the most of its location on the river Tyne in Gateshead. Seven years on, amid an escalating fuel price crisis, the cost of heating the cavernous building is no joke – and neither is the tidal energy plan. Faced with the prospect of fuel bills nearly tripling to top £1m a year, the Baltic is now consulting with renewables experts to see if they can generate their own energy, and thus mitigate a looming crisis that many in the cultural sector are warning could wipe out some institutions. She doesn’t yet know if the renewable plan is feasible, or where they would find the capital funds to invest in it. “But we have to protect the institution as much as we can.” Munro said: “I don’t want to manage decline. I’m ambitious for what we can achieve for our communities, and we know there is huge demand for what we do.” The very worst case scenario would be to close their doors for a period to keep the gallery going, though she hopes it won’t come to that. But “we would have to look at all options”. These are acutely anxious days for the diverse sectors that make up Britain’s creative industries. Those institutions which made it – sometimes barely – through the pandemic are now contending with huge leaps in fuel prices, increased staffing costs, reluctant audiences and the logistical and cost hangovers of Brexit. For many visual arts institutions, “it’s really desperate”, says Paula Orrell, director of Cvan England, a network that supports the visual arts sector. Some, including a number of major museums and galleries, are burning through their reserves just to be able to survive, she says. “These are not the kind of institutions that as a country we can afford to lose.” Theatres, meanwhile, are “verging on catastrophe” this winter according to one major operator, as a result of soaring energy bills and falling ticket sales due to the cost-of-living crisis, hard on the heels of two years of Covid closures. Energy was a “hugely significant operational cost which is putting severe financial pressure on our sector”, said Trafalgar Theatres, which operates 13 venues across the UK. Even with government support for the next six months, the group was facing a 179% increase on its 2021/22 energy bills; further increases and a withdrawal of government support next spring would be “potentially disastrous”, it said. The National Theatre, too, is facing an increase in its energy costs over the next six months from £450,000 to £1.6m, even taking into account the government’s help for businesses. The bill for 2023-24 is expected to be about £3.3m. “It’s an extraordinary hit for us,” said executive director Kate Varah. “It leaves us with two options: cutting activity or digging into limited reserves.” Box office sales – almost 35% of income – are still down on pre-Covid levels, while payroll and materials costs are increasing by up to 10%. Arts organisations in England will learn next week how much Arts Council funding they will receive for a three-year period from April 2023, and for many there is acute anxiety as they wait to hear what they will receive. The government has already said it is committed to directing more funds to bodies outside London. “We agree funding should be spread to under-served areas of the country, but for [the NT] it means at best it will be flat, and at worst we’ll face a 15% cut,” said Varah. The NT was working on a long-term response to the “age of crises”, she added. “We expect it’s going to be turbulent for the next 10 years. If we can make a plan to sustain and thrive, rather than breathlessly go from one challenge to another, we have a better chance of survival.” The Arts Council of Wales said many independent venues faced closure after the cost of putting on productions rose by up to 40% compared to a year ago. “We are receiving reports of action being planned or taken to raise prices; to reduce performances, exhibitions, community activity, touring, hours of operation, and workforce levels,” it said in a submission to the Welsh parliament earlier this month. Eleanor Lang, executive director of Theatre Royal Stratford East in east London, said: “Costs are going up and income is going down. It’s quite hard to see how everyone gets through this.” She was in the midst of “really difficult conversations” about ticket prices. “We’re already seeing a hit to secondary spending – programmes and drinks. I fear we’re going to see people not going to the theatre at all, or going as cheaply as possible,” she added. “This is really tough coming after two and half years of Covid hell. At least then we had brilliant government support. This feels terrifying.” Dan Bates, chief executive of the Sheffield Crucible said his organisation “can just about cope, providing audiences keep coming”. Ticket sales were down about 20% on pre-pandemic levels, and there was “great debate about what we should be putting on”. Radical new productions were likely to give way to more reliable “crowd-pleasers”. The theatre was reviewing its ticket prices, and is likely to increase the number of cheaper seats. “But we’re very conscious that £15 is what some people have to spend on food for a week,” he said.“It feels like we’re under attack from all sides. The joy of what you are doing soon disappears.” “Our sector is very resilient and entrepreneurial, we operate on really tight margins,” said Paul Hobson, director of Modern Art Oxford, one of the country’s leading regional galleries. While its typical energy costs would be about £30,000 a year, however, “we were being quoted figures in the region of £200,000”. He added: “It’s not just energy costs, but shipping, transport, insurance, materials, fabrication costs, staffing costs, all of these costs are inflated. That puts a lot of pressure just on your operating model.” They have already reduced their opening hours; options now include cutting the number of exhibitions, and charging for more of them. Outreach to underserved communities, meanwhile, and plans to reduce their environmental impact were inevitably hit too. For small organisations, the margins are often even narrower. Lucy Day, the interim executive director of Phoenix Art Space in Brighton, said that with their own utility costs having doubled, she had no option but to pass that on to the 120 artists who rent their studio spaces. “We simply can’t absorb that – it would exhaust our reserves in a very short space of time.” For many of them, however, a rise of even £20 or £30 a month could prove prohibitive. “Up to a point we can add extra layers, but we’re in an old, glass-fronted building and there’s a limit to how low you can take the temperature before the studio becomes unworkable.” Across the sector, she said, she could see all kinds of cultural institutions having to reduce their hours at the very least. “And there will be a wider societal impact. How damaging would it be if you suddenly look around and you think, there are no performing venues, or far fewer galleries and museums and libraries that people can go to any more, or they’re in another town because the one in your local town shut down? So I think the landscape is quite scary. That’s a bit of an understatement.” The Mercury Theatre, Colchester Next month, a procession to mark Colchester’s elevation to city status will start at the Mercury theatre, a landmark in the Essex town since 1937 that has recently undergone a £14m upgrade. Three days later, the curtain will go up on Beauty and the Beast, this year’s Christmas panto, with 70% of tickets already sold. Coming after two years of Covid closures and financial stress, things seem to be looking up for the Mercury. So why does Steve Mannix, its chief executive who says his hair is getting greyer by the day, warn of a “crisis point” by Easter? The environmentally-friendly building is facing a huge increase in its annual energy bills, from £38,000 last year to up to £120,000 in 2022-23. The cost of materials for stage sets and costumes, all made in-house, has risen 30%. Stock for its bar and cafe has gone up substantially. And its 118 hard-working and loyal staff, understandably, would like a pay rise. Meanwhile, says Mannix, its audiences are also feeling the pinch. “They’re booking late, and less frequently. We’re choosing very carefully what to programme. We’re looking at discounting tickets, but we don’t have infinite resources. We’re crossing our fingers a lot.” The theatre receives 78% of its annual income from box office sales, its cafe and bar, hiring out space and fundraising. The remaining 22% comes from the Arts Council, the county council and the borough council. It runs a costly community programme, including free holiday programmes for children, and hopes to offer itself as a warm space this winter. “We’ve been part of many generations of families over the years, we’re part of the lives of local people,” says Mannix. “But we’re also worried that we might reach a crisis point by Easter. If we run out of money, ultimately we could have to shut. We’ll be doing everything we can to get through this.” HS Spike Island contemporary art centre, Bristol When he crunched the numbers on projected energy costs for the coming year, said Robert Leckie, “it just felt like, here we go again.” Leckie is director of the Spike Island arts complex in Bristol, a large post-industrial space that hosts galleries, co-working spaces for creative industries, commercial business tenants, artists’ studios and the University of the West of England’s fine art programme. To heat the leaky 1970s former tea-packing warehouse has historically cost £75-80,000 a year, or about 5-8% of their total budget, said Leckie. “But we’re forecasting this year that it’s going to at least triple, to about £240,000 pounds. That’s easily £150,000 pounds that we just don’t have in our budget.” To put that in context, the organisation received £250,000 a year from the Arts Council as a national portfolio organisation, designed to support areas that have little cultural provision. “Having come through Covid and successfully navigated a very, very difficult situation, it feels borderline absurd to be in a situation again where you’re then having to find huge additional savings on the basis of something which feels so beyond your control,” he said. The situation is made particularly challenging by the Spike Island’s diverse stakeholders. Gallery opening hours have already been reduced from six days a week to five, but the building has 24/7 access to cater to its range of tenants, so savings are limited. Putting rents up meanwhile, said Leckie, risks driving away tenants who are themselves cash-strapped, leaving them even more vulnerable. What the organisation really needs to keep going is a significant, sector-specific injection of emergency cash similar to the pandemic’s Culture Recovery Fund, he said. “If the government don’t want museums or galleries, or studio providers to fold, that is going to be necessary. The scale of what this is absolutely in line with what we faced during Covid.” Truthfully, however, “I don’t feel that’s likely. But you have to hope.” EA