SINGAPORE - Arts venue The Substation has responded to a National Arts Council (NAC) statement on Tuesday (March 2) on its operating costs, saying programming takes up more of its budget than 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 on Friday.

The 30-year-old arts centre 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 council said that with more arts groups and practitioners, the Armenian Street space would be of greater benefit to the broader arts community, when made available to other arts groups.

On Tuesday, the NAC responded to news of the closure with a statement that said 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, including two artistic directors and two programme managers.

"We believe in paying fair wages to our employees, and we certainly do not overpay them. Indeed, we believe our employees turn down higher-paying jobs in the arts market for the 'symbolic remuneration' of working at The Substation," it said.

The Substation 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".

The NAC has said that the heavy reliance on direct and indirect government funding would not be sustainable in the long term.

The Substation said it is an arts centre, not an arts group, thus 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 stated: "As the operator of an arts centre, we have autonomy over our physical spaces, which we dedicate primarily to arts usage. We attract and can select suitable hirers - for example, theatre, dance and music groups - both short and medium term, which provide a 'community effect' at the space, over and beyond their revenue contribution."

It added that like the Esplanade, there are spaces within the Armenian Street building that it leases out for commercial use - for the Esplanade, its restaurant and retail spaces; for The Substation, the garden area which was occupied for several years by live music bar Timbre - as well as other spaces for use by arts groups at non-commercial, highly subsidised rates, such as the Substation's dance studio.

In response, the NAC said The Substation should appropriately be compared against other Major Companies funded by the council, some of which also operate premises and arts centres similar to it, 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".

The council said it has funded The Substation for its work under the Major Companies scheme, as there are no other schemes that provide multi-year and sustained organisational funding.

The Government has been financially supporting The Substation since its inception in 1990. NAC grants have amounted to $6 million, excluding The Substation's rental subsidy and the matching grants it has received from the Cultural Matching Fund for donations raised.

Major Companies receive funds ranging from 50 to 70 per cent of its costs and need to meet several requirements including financial sustainability. Current 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 for $500,000 per year, the equivalent to the rental income that they would have foregone. NAC could not agree to this."

The news of The Substation board's decision to close the centre permanently was greeted with dismay by the arts community, where there has been a grassroots movement to try to save it.

The numbers revealed on Tuesday by the NAC have also sparked discussion on a Facebook page set up by the arts community as part of this effort.

Ms Goh Ching Lee, former arts festival director and founder-artistic director of CultureLink Singapore, commented that at $1 million a year, The Substation "is on a subsistence budget, given inflation, the costs of maintaining an old building, staff costs, programme costs, meeting new challenges... through 365 days a year."

The centre, founded in 1990 by late theatre doyen Kuo Pao Kun, has been credited as the incubator for several Cultural Medallion recipients, including The Necessary Stage's Alvin Tan and Haresh Sharma, and for nurturing Singapore's nascent film and music scene in the 1990s.

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