Since the beginning of the 1990s, the sphere of culture has undergone two fundamental changes: decentralisation and re-allocation of public responsibilities. The first period was about privatisation of cultural industries that had been subordinated to the state until 1990 (film production, film studios, book production and music industries, etc). State circuses and variety shows were privatised as well as other cultural institutions. The second period was linked to the territorial reform of public administration in the Czech Republic (see also chapter 1.1).
The Ministry of Culture (MC) established 82 state-funded organisations in 1998. By 2001 this number had decreased to 39 and there are only 29 such organisations in 2012. The most recent change came into effect on 1 January 2012, when Prague State Opera and the National Theatre were merged. The majority of these organisations are libraries, museums and galleries that were transferred to new regions and the state kept only those of national and international importance. The tendency is to decrease the number of these organisations in future.
There are 18 museums, galleries and memorials, 3 art institutions (National Theatre, Czech Philharmonic Orchestra and Prague Philharmonic Choir), 3 libraries and 1 institute from the field of cultural heritage (National Cultural Heritage Institute Prague) that are included in the list of organisations supported by the MC (in the Czech Republic archives are not classed as part of the culture sector). http://www.mkcr.cz
Czech public cultural institutions, and foremost among them the Association of Professional Theatres, have long been advocating for the introduction of an act on public (non-commercial) institutions in culture (see also chapter 4.2.1). This legislation is meant to address the much-discussed problems of semi-budgetary organisations in the arts. The current attempt at preparing legislation is an updated follow-up to unsuccessful proposals for legislation on national cultural institutions and to a proposed act on public (non-commercial) institutions in the field of culture. The current attempt has now progressed to the point that it is part of the current Government Programme and is part of the Government’s Legislative Agenda for 2015-2017. The management of existing cultural semi-budgetary organisations of the state and of towns is basically defined in political terms. Organisations similar in legal form to semi-budgetary organisations exist within Europe only in Slovakia. This is because this legal form of organisation originated within the legal system of state-socialist Czechoslovakia. A similar though not identical type of institution can also be found in the legal system of the German-speaking states and in France. In those cases, however, they are a kind of public or public-service institution.
In the Czech Republic there are two types of semi-budgetary organisation: organisations established by the state and governed by Act No. 218/2000 Coll. on Budget Rules and on Changes to Some Related Acts as Amended; and organisations established by a regional authority in conformity with Act No. 250/2000 Coll. on the Budget Rules of Regional Budgets and Act No. 129/2000 Coll. on the Regions, as Amended, or organisations established by a town in conformity with Act No. 128/2000 Coll. on Municipalities as Amended.
A semi-budgetary organisation is established by an establishing body for the purpose of providing a public service. It cannot be established by multiple subjects of public administration or authorities, unlike in some Western countries.
Other problems currently related to semi-budgetary organisations (SO) and of significance for their management include:
- their direct political management: SOs are managed not by a board of directors but by a municipal or regional council or a minister;
- their demotivating remuneration: this is particularly true in the case of arts organisations, which are becoming increasingly less competitive in the labour market; remuneration should reflect quality and performance and not wage regulations and the rules of remuneration in SOs;
- the non-existence of multi-year and cooperative funding: multi-year planning in advance is especially important in arts institutions; another problem is that multiple subjects of public administration are not involved in the work;
- the VAT regimen (more an economic factor): two VAT regimens usually apply to SOs (the organisation’s main activities are not subject to VAT, while its secondary or economic revenue-generating activities are); and
- the disproportionately complicated and ineffective system of awarding public contracts: this increases the operational costs of cultural organisations that already have limited budgets; it also has implications for copyright and arts institutions can easily lose their competitiveness not just in relation to foreign counterparts but also in relation to independent non-profit or for-profit arts organisations that are not bound by the same rules even though they receive public budget subsidies.
Alongside semi-budgetary organisations the culture sector is also largely made up of networks of cultural institutions and organisations or associations with various types of legal subjectivity that are more or less dependent on public support. This infrastructure covers every area of culture.