Substation responds to NAC statement on operating costs

The arts centre says programming takes up more of its budget than what the council said

Responding to NAC's statement that The Substation (above) "incurred more than $1.5 million in salaries and other manpower costs", the arts venue said the figure is the total cost for three financial years. PHOTO: LIANHE ZAOBAO
Responding to NAC's statement that The Substation (above) "incurred more than $1.5 million in salaries and other manpower costs", the arts venue said the figure is the total cost for three financial years. PHOTO: LIANHE ZAOBAO

Arts venue The Substation has responded to a National Arts Council (NAC) statement on Tuesday on its operating costs, saying programming takes up more of its budget than what the council has said.

Its manpower costs are just over $500,000 a year while programming costs make up 35.7 per cent of operating expenditure, it said in a statement issued yesterday.

The 30-year-old arts centre had announced on Tuesday that it would close permanently after moving out of its 45 Armenian Street venue in July for renovations because it disagreed with the council's decision to turn the revamped building into a shared space with other arts groups as co-tenants.

The NAC responded to news of the closure saying The Substation's "expenditure on programming has been a small proportion of total operational expenses, at 23 per cent on average from FY17 to FY19".

"In contrast," it added, "The Substation has incurred more than $1.5 million in salaries and other manpower costs."

The Substation said the $1.5 million figure is the total cost for three financial years, adding that the centre has a staff of 11. It also took issue with the council saying its reliance on "government funding of an average of 86 per cent of annual income" is "the highest among NAC's Major Companies". NAC has said that the heavy reliance on direct and indirect government funding would not be sustainable in the long term.

The Substation said that as it is an arts centre, not an arts group, its financial and operational model is different. A closer analogy would be the Esplanade, also an arts centre, albeit on a much larger scale. It said that like the Esplanade, it rents out spaces for commercial use as well as for use by arts groups at highly subsidised rates.

In response, the NAC said The Substation should appropriately be compared with other Major Companies funded by the council, some of which also operate premises and arts centres similar to The Substation, but do not rely on government funding to the same extent.

It said the Esplanade plays a different role from Major Companies and "is provided with funding and held accountable for outcomes which are not asked of Major Companies".

It has funded The Substation for its work under the Major Companies scheme as there are no other schemes providing multi-year and sustained organisational funding.

Major Companies receive funds ranging from 50 to 70 per cent of their costs and need to meet several requirements, including financial sustainability. Major Companies include Singapore Dance Theatre and Singapore Lyric Opera.

The NAC said it has offered several interim premises to The Substation and agreed to increase its funding during the renovation period. It said: "Above and beyond the Major Company grant, NAC offered another $100,000 per year for the next two years. However, the Board of The Substation requested $500,000 per year, the equivalent to the rental income that they would have forgone. NAC could not agree to this."

The board will be holding a virtual town hall meeting today to discuss its decision.

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A version of this article appeared in the print edition of The Straits Times on March 06, 2021, with the headline 'Substation responds to NAC statement on operating costs'. Subscribe