Dear Shane

Artlaw Services Ltd in voluntary liquidation. Can this be so? You cannot believe it. You do deserve a full explanation;

Shane Simpson, LLB, Barrister
Director
Arts Law Centre of Australia
Sydney

Dear Shane,

Artlaw Services Ltd in voluntary liquidation. Can this be so? You cannot believe it. You do deserve a full explanation; so, do those who have supported the creation of your own organisation; as do all those in this country who have likewise supported us in the past together with those who have until recently been serviced by us. I am writing this letter openly for all of you.

It would be very tempting to rehearse the motives and raison d’être of the original Artlaw Research Project, the findings and recommendations of the Report and Conference at the end of 1977 – just looking for flaws, errors of judgements, mistakes and so on – but I don’t see the need. The record of Artlaw Services between 1978 and 1983 speaks for itself and is well documented: (see the recent piece in Art Monthly No 6a, last month). And when we decided to cease trading in July, the three programmes were in fine shape: the Artlaw Clinic of volunteer lawyers’ caseload was increasing; the education programme for academic year 82/83 was our best ever (85 art school venues); two new publications (copyright and tax hand-books) were out and selling well, with more in the pipeline. So what went wrong?

The short answer is we received the first draft of our audited accounts for 1982/3.
This is what we saw. Although all three programmes generated good income (subscriptions, teaching fees, sales of books) it had become insufficient to maintain our office, four full-time staff, those current programmes and clear what had in that year become an accumulated deficit which could not be ignored. In those circumstances, we felt that a reduction in our expenditure would have meant providing a shoddy and inadequate service to the arts community, which we were not prepared to do. In the absence of a fairy godmother, we had no lawful option but to cease trading.

The reason why I say that income had become insufficient towards the end relates mainly to inflation. The costs of maintaining the same level of staff, cheaper offices and the same programmes increased to a level disproportionate to the level of income we could generate from providing those services. As the costs of all expenditure rose beyond our control, our income could not keep pace, particularly in our last year. The subscription rate was eventually doubled (probably too late, but many artists who wanted to, just could not manage it); our teaching fees were fixed by the art schools whose hands were tied to the standard rates, and were therefore beyond our control (they had not been raised for some years); and our publications had to be priced at a reasonably low level which practitioners could/would pay, in order to guarantee no loss (let alone a surplus). That deals with the rates we charged. We also planned and worked for more income at the same rates from these sources, on the basis of real increases in numbers of subscriptions, sales, and teaching dates during the five years. Had we achieved a lot more of the same, we might have survived, but it didn’t come in time.

Only a year ago we appeared to have achieved self-sufficiency; if we had been able to keep to our 1982/3 budget (which in October 1982 we were doing) we were on course for a ‘no deficit’, possibly a surplus, year. However, we could not foresee two things at that time: the effects of inflation on that 82/3 budget; and the true extent of the accumulated deficit, particularly following the Arts Council cut of 1981/2. These two factors became clear in the draft audit report of July 1983. That, in my view, deals with why it happened at the end of 1982/3. But, you may ask, what was this accumulated deficit? Let me explain. You see, it was the original funding bodies that introduced the notion of a degree of financial self-sufficiency. This was never debated at the inaugural conference, but became an increasing requirement from the Arts Council in particular. (The Gulbenkian Foundation had made it quite clear from the outset that they would provide seeding funds for two years only, which income we were always committed to replacing). But the Arts Council increasingly made it clear that we should achieve total self-sufficiency quite swiftly; this then became our pressured goal to achieve before Arts Council funds were completely withdrawn. We all know about the unkind and unheralded Arts Council cuts of 1981/2 – only those organisations which should be able to survive the cuts, we were told – which included us. ‘A curious act of vandalism’ as Paolozzi and others phrased their protest in The Times; how right they were.

We were not self-sufficient then and should have folded, but for the marvellous auction, the income from which appeared to plug the gap. It did so on a cash-flow basis and we genuinely thought we had survived. But, in trading terms, it was a major source of income which we did not have the time fully to replace, especially when inflation then bit so hard into our budget for 1982/3. It meant we had to replace the lost Arts Council income and beat inflation; we failed.

Now we are in voluntary liquidation, could we not start again? The teaching and the writing is being continued by those of us who volunteered our services originally; under the aegis of the Artlaw Trust, we are doing as much as we can to provide the service. The Clinic has completely finished; without the mutually supportive structure of Clinic/Services (teaching and writing) in one set of offices, the Clinic needed a free home. Nothing was offered and it’s now gone, probably for good.

All in all, what was needed was continued public funding to top up hard-earned income derived from that which the community could afford to pay; perhaps that funding ought to have been permanent. I don’t know whether self-sufficiency could have been achieved had we been supported longer. And that is the real answer, and the real lesson to be learned, I suppose. From an Arts Council viewpoint, I can see that greater priority could be given for the use of, say, £10,000 per annum. They must decide as they see fit as to their grant aid. I only wish we could have persuaded them to see it another way: the Artlaw Clinic of volunteer lawyers alone gave the arts community each year in excess of £200,000 worth of free legal advice; the volunteer writers forwent fees and royalties; and some of us taught at our own expense for no fee. In my view, £10,000 a year would have been a small price to pay, particularly bearing in mind the level of subsidy from Artlaw staff and volunteers.

Finally, therefore, we failed to generate sufficient income from a section of the public which could, not afford to pay more (in the time available) for the services we provided. In short, we tried to provide a public service without public funds; there-in lies the answer to your original question.

Our Arts Council made its decision, and I only hope yours in Australia takes a different view; your arts community will be the beneficiary and I wish you all well.

Yours sincerely

Henry

© Henry Lydiate 1983

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This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.