Finland/ 6. Financing of culture  

6.1 Short overview

The major role in financing the arts and culture in Finland is played by the central government (the state) and municipalities. The main policy domains financed by these two levels of government are artistic creation (arts education, support to artistic work) cultural and art institutions (most importantly libraries, theatres, orchestras and museums) and the maintenance of cultural heritage.

In practice, the central government and municipalities are the sole public financiers; in addition one can mention the Finnish Broadcasting Company and the copyright organisations – if the collective use of copyright compensation can be considered "public". There is no independent regional administration which would provide direct public funding although regional arts councils, foundations and regional councils can play an intermediary role between the municipal governance and central government in EU financed cultural projects.

Although the public financing is thus concentrated, it is difficult to find comprehensive enough statistical data to cover the state of the financing at a given time to say nothing about systematic mapping of development in time. There are four main reasons for that.

First, there is no consensus on what activities should be included in the domain of the arts and culture. In principle Finnish policy makers have accepted the framework proposed by EUROSTAT, but it is seldom used in practice. Secondly, although central government and municipalities play a central role, neither of these levels is a unity. The main policy domain might be concentrated in one ministry, but important artistic and cultural activities are carried out and financed within the jurisdiction of other ministries or by special administrative agencies. In Finland there is officially one and the same ministry for education and culture, but this does not always solve such statistical issues as how the statistics on education and training in the arts and culture should be collected and classified. On the municipal level monitoring the financing of the arts and culture at municipal level must cover a lot of administrative units – in the case of Finland, as we have stated earlier "…336 (in 2012) municipalities and numerous inter-municipal boards and public-private corporations". Covering the financial transactions concerning these units usually demands survey-type data collecting, if not in the field, at least in the archives of various basic statistical systems.

Thirdly, the financing can be direct expenditure-based budget financing but it can also be transferring of grants / subsidies to the recipients through another governance level or a special administrative unit or type of organisations. The main Finnish public financing system "vos" ("the state's share system") is bifurcated: the statutory state share of financing can go either directly to the recipient, e.g. to a theatre, museum or orchestra (whose legal form is a foundation or an association, for example), or to a municipality which is supposed to use it for the assigned cultural institution but has the right to decide, if it really wishes to use the "share" for this purpose, or another one instead. Needles to say, this bifurcation does not make compilation of finance / expenditure statistics any easier.

Table 8 presents an example of where an attempt was made to overcome all these obstacles. The data for the year 2001 was collected, analysed and organised in a EUROSTAT pilot study in 2004. The central government figures also present expenditures allocated to the arts and culture not only by the Ministry of Education and Culture but also by other ministries and independent central government agencies. Such public allocations are e.g. for the military bands of the Finnish Defence forces.

Table 8:     Public (state and municipal) financing of the arts and culture by domain in 2001

Source:     Finnish data compiled for the EUROSTAT pilot survey, 2004.

There is no need to comment here on the domain classification that is rather generally accepted. It is, of course, not necessary to use the classification as a whole, and we can notice that in the EUROSTAT 2004 testing, some domains were not filled in e.g. radio, television, audiovisual recordings and multimedia. Public TV and radio operated by the Finnish Broadcasting Company (FBC) had, in 2001, a turnover of about 350 million EUR, which is at present around 390 million EUR. Until the end of 2012 the FBC is financed 99% by licence fees, or, in other terms, from the Finnish household consumption budget. This will change however, when the so- called FBC tax will come into effect from January 2013, when the financing will change into a model based on tax-collecting (see also chapter 4.2.3). On the other hand, support for book publishing and the press were included in the 2004 test case statistics, and the press subsidy in its two forms was still rather sizable in 2001.

What is important in Table 8 is the division of the total public financing into four components. The central government contributes three of them: the direct financing (181.3 million EUR) that covers costs of its own institutions, transfers to municipalities (117.9 million EUR) which support municipal institutions and cultural activities and, thirdly, other transfers (120 million EUR) that support artistic activities and activities of independent cultural and art institutions. The latter are often operated by non-profit organisations (associations, foundations). The financing by municipalities (325.7 million EUR) does not include central government support but is their actual own financial input. All these four components add up to total public financing of 745 million EUR.

The following financing and expenditure data does not provide a similar comprehensive picture of public financing / expenditure as Table 8. Yet the following Tables try and trace development after 2001 and refer also to the earlier roots of the present situation.

Tables 9 and 10 below highlight two recent trends in public funding of the arts and culture. Since 2006 the financing by the central government has increased strongly and, at the same time, the share of finance from the profits of Veikkaus Ltd, the state monopoly on lotto, lottery and sports betting has substantially diminished.

Table 9:     Finnish central government financing channeled through the Ministry of Education and Culture to the arts and culture, in million EUR, 2001-2010

Source:     Statistics Finland, Kulttuuritilastot / Cultural Statistics 2011, 181.
                 http://www.minedu.fi/OPM/Linjaukset_ja_rahoitus/?lang=en

Table 10:   Share of central government financing (Table 8) funded from the profits of the Veikkaus Ltd*, in %, 2001-2010

Source:     Statistics Finland, Kulttuuritilastot / Cultural Statistics 2005/2007/2011, 224/195/180
                 http://www.minedu.fi/OPM/Linjaukset_ja_rahoitus/?lang=en
*               The government company operating the monopoly for lotto, lottery and sports betting.

The level of central government financing through the budget of the Ministry of Education and Culture exceeded the pre-1991-1993 recession level for the first time in real terms only in 2006. Since then the growth trend has continued in 2007-2010. This has been mainly due to the amendments of finance legislation which have obliged central government to make corrective ex post inflation compensations to its earlier subsidies and committed budget-makers to correct inflation systematically and concurrently. These amendments alone have meant that the state's share ("valtionosuus") in the financing of professional theatres, orchestras and museums has been raised in 2008-2010 by 50 million EUR over and above the "regular" inflation compensation.

The share financed from the profits of Veikkaus Ltd has declined, because the new Finnish legislation on betting stipulates that the profits can be used only for the support of arts, scientific research, sports and youth policy objectives and subsequently they e.g. cannot be used to subsidise public municipal libraries. Thus the substantial central government subsidies to libraries have been gradually moved to be paid from the regular state budget (from taxes).

In 2001, the financing of the arts and culture by the municipalities had again reached the levels that existed prior to the recessions of 1991-1993 and 1999-2000, but the growth has since then levelled-off because of the fiscal deficits experienced by the majority of Finnish municipalities. There are plans to reform the structure of the Finnish system of municipal administration by introducing better targeted and more efficiently organised services and by merges of small municipalities.

In the context of the licence fee-based financing of the FBC we referred above to the household spending on art and culture. Besides this type of spending, the household surveys on cultural spending include items such as books, newspapers and journals, PC- and media equipment, programmes and discs, games, schoolbooks, encyclopaedias, and photography services. If we take all these items to measure cultural consumption, the share of this spending of the total household spending is about 5-6%. The EUROSTAT comparative survey of 2005 provides the most credible PPS-adjusted information about cultural consumption of Finnish households. According to the survey, the average consumption in a Finnish household was 24 369 EUR per annum and out of this, the consumption on culture per household was 1 234 EUR, or 5.1%, which meant that the aggregated national household consumption was about 3 billion EUR. Finnish cultural consumption was above the European average, tenth in the ranking order of 27 EU-countries. This status was mainly due to relatively high rankings in purchasing newspapers and in the acquisition of information processing equipment.

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