In response to the audit report of the State Audit Office on the validity of state participation in the field of professional theater and music, the Ministry of Culture (MoC) has undertaken to implement four of the auditors’ recommendations, however, it doubts the possibility of releasing a niche for the private market to the state capital company in the provision of professional art and music, the LETA agency was informed by the MoC.
KM undertakes to agree on the data to be entered into the automated data system (from 2026) with the state, local government, private and non-governmental organizations operating in the field of professional theater and music art, as well as to order an evaluation of the field of professional theater and music art, during which data will be obtained for representatives of the field of professional theater and music arts (from 2027), as well as to create a single automated data acquisition and compilation system that would provide information on the creative activity of professional performing arts organizations and from which analyzable data could be retrieved (also from 2027) .
Also, the Ministry of Culture has already agreed with the management of capital companies on the observance of uniform principles in the preparation of annual reports from 2025, therefore the 2025 annual reports of cultural capital companies will be prepared according to uniform principles.
KM also promises to review and make a decision on the application of uniform principles in capital companies in determining the amount of discounts for various target groups of society, such as students, pensioners, families with children, representatives of low-income social groups, as well as in the issuance of free tickets (including those issued for representation and charity purposes). However, KM emphasizes that the mentioned does not apply to VSIA “Kremerata Baltica”, which itself does not provide ticket sales.
However, the Ministry draws attention to the fact that the time period chosen for the audit report of the State Audit Office (2019-2022) is the time of the Covid-19 pandemic, which is therefore not representative and does not actually characterize the current situation – starting from the cultural institution of spring 2020 followed the safety measures for the spread of Covid-19. KM also seems that the State Audit Office has also added to the invitations the invitations granted to creative teams, media representatives, critics, musicians, etc. groups of society that are directly involved in the creation of performances and concerts or in providing communication about them. KM indicates that these groups should be listed separately in the future so that there is no false impression of the volume of invitations issued.
Finally, taking into account the auditors’ recommendation to the KM to evaluate the capacity of administrative resources of the capital companies in which it is the holder of 100% of the capital share and to examine the possibilities of their optimization, that is, in fact to decide in the future on the merger of several capital companies or the release of the market to the private sector, the KM plans to contact the State Revenue Service, in order to obtain clearer data on the additional employment of employees of capital companies referred to by the State Audit Office. Current data leads us to assume that the State Audit Office considers every copyright contract concluded by a creative person, conducted educational lessons, also the status of a self-employed person, etc. as a place of work.
From the point of view of KM, it would not be correct to list the forms of creative work as separate jobs – for example, an actor who works full-time at the Latvian National Theater can also be a teacher at the Latvian Academy of Culture or another educational institution; as a self-employed person, speak the texts of marketing materials for the State Audit Office or the Ministry of Internal Affairs, host corporate events or programs on TV/radio; in the summer, when the theater is closed to the audience, to participate in film shooting projects. This is the specifics of the work of creative personalities and there is a demand for these professionals in the labor market, emphasizes the ministry.
It should also be taken into account that those working in creative fields work in several jobs also because of the low pay, because it is impossible to earn a decent salary in just one job, says the CM. The result is overload and burnout. A similar situation is not characteristic of employees in state capital companies of any other sector, KM citing as examples such state enterprises as “Latvenergo”, “Latvijas Valsts meži”, “Latvijas ceļi” etc.
Regarding the possibility of freeing for the private market the niches of state capital companies in the provision of professional art and music, KM notes that nowhere in Europe, including Estonia and Lithuania, nationally important music collectives – opera, ballet, symphony orchestra, academic choir – have not been transferred to the private market, and KM questions , whether they would be able to operate completely in the private market under the conditions of the need for the management and maintenance of the special buildings necessary for their operation. Such actions would result in the collective destruction necessary for Latvia’s national culture, KM is convinced.
“No Latvian private market player is capable of maintaining and permanently employing an artistic collective or troupe, making all labor tax payments, as well as maintaining fundamental real estate (Latvian National Opera and Ballet, theaters, concert halls), which we are all proud of, and providing diverse content throughout the year. On the other hand, private sector projects operate only for limited periods of time, focusing mainly on commercial content and often involving directly employed musicians in the public sector in the implementation of their projects,” the ministry emphasizes.
KM adds that in the field of classical music, the state and private sectors are not and cannot be in a comparable relationship, because their operating model, structure of expenses, activity intensity and repertoire are significantly different.
As reported, the Ministry of Internal Affairs should improve its work with data on the market situation in the field of theater and music arts and promote the wider availability of services provided by state theaters and concert organizations, the auditors of the State Audit Office concluded.
The auditors have concluded that no significant changes and improvements have been achieved in the operation of KM in the management of capital companies. The Ministry of Culture should improve the supervision over the execution of the tasks delegated by the state administration and the use of resources by capital companies, linking it to the cultural policy tasks and government priorities, as well as the acquisition and compilation of data on the market situation in the field of theater and music arts.
In order to justify that the society gets the best possible product from the implemented cultural policy and the correspondingly allocated state funding, KM should have comprehensive, transparent and comparable information and data not only about its 14 capital companies, but also about other non-governmental sector organizations in the field of professional music and art. It cannot be taken for granted that services in this field are the best for state capital companies.
After the 2018 audit, the State Audit Office recommended that the Ministry of Internal Affairs improve the process for obtaining and collecting data, so that the planning and implementation of cultural policy is based on complete data on the actual situation on the market. Also in 2020, similar problems were identified in the study ordered for the study of the situation of the Ministry of Education and Culture. Vilka explains that after looking at the latest evaluation of the Ministry of Internal Affairs on the preservation of the state’s participation in its capital companies, it can be concluded that the problems with the data are still relevant and that the ministry has not fully used the research to characterize the market situation. She also adds that the 2017 regulations on the collection of statistics in the field of culture, the implementation of which is supervised by the Ministry of Culture, are still valid. If these rules were followed, the Ministry of Education would also have data on the field of professional theater and music arts.
In 2022, the evaluation of the Ministry of Internal Affairs on the preservation of the state’s participation in its 14 capital companies allows us to conclude that the ministry has tried to use the principles of good management practices of state capital companies in the evaluation of state participation, however, it does not consider all the conditions in order to give the public confidence that the participation of a public person in a capital company is the most effective a way to ensure the availability of cultural offerings for every resident of Latvia.
Every year, KM concludes contracts with its capital companies, allocating funding from the state budget to perform certain tasks and achieve specific results. In the opinion of the State Audit Office, the ministry sets contradictory requirements for capital companies – to achieve a certain amount of revenue from ticket sales and to ensure accessibility to the public. An increase in the amount of own revenues means higher ticket prices, while accessibility means a ticket price that can be paid by target groups of society with different incomes. At the same time, KM capital companies have different approaches to selling tickets at reduced prices. For example, there is a capital company that almost does not grant discounts to various target groups of society. In the opinion of the State Audit Office, this does not contribute to the availability of the provided services.
The free ticket policy set for capital companies is ill-conceived: they may issue more tickets for representation purposes than for charity, the auditors emphasize. As a result, most capital companies in 2022 devoted more resources to the promotion of services than to charitable purposes (accessible cultural events for people who cannot afford them).
Theater, opera, ballet and circus arts are concentrated in Riga – the Ministry of Culture for Riga theaters, VSIA “Rīgas cirks” and VSIA “Latvian National Opera and Ballet” set a low indicator – the number of performances outside the permanent premises, even though one of the tasks of cultural policy is to ensure the accessibility of culture in the regions. For example, in 2022, Riga theaters provided 4% of the total number of performances outside the permanent premises.
Every second administrative employee of KM capital companies works in several jobs. Data from the State Revenue Service (SRS) on employment show that 56% of the administrative staff have from one to seven additional jobs. Perhaps the administrative capacity and workload in capital companies should be reassessed. The auditors remind that the recommendation given in the 2018 audit regarding the optimization of the administrative functions of two capital companies is still relevant and the optimization of administrative activities should be evaluated more widely in other capital companies as well.
Tags: Ministry Culture committed implementing auditors recommendations
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