The Notifiable Transaction under Standing Order No. 21: The Arts

The Collectorplan scheme makes contemporary works of art available to ordinary individuals in Wales. It does so by providing them with an opportunity to have an interest-free loan to buy contemporary Welsh art and craft. Around 79 galleries in Wales currently participate in the Arts Council of Wales’ Collectorplan scheme, which assists UK residents to buy original works of art and craft by living artists. Anyone visiting one of the participating galleries and wanting to buy an item for sale can obtain interest-free credit towards a single purchase or a group of purchases. The items can include paintings, silverware, ceramics, sculpture, jewellery, prints, photography or textiles. Purchasers are required to find a deposit of 10 per cent of the total cost. Gallery staff will guide them through the paperwork and submit an application to the Arts Council of Wales on their behalf. The loan will normally be approved within seven to 10 days. Loans of up to £2,000 are repayable between 10 and 15 months, depending on the size of the loan, and the minimum monthly repayment is from only £10.
There is, however, a major problem with the scheme—it is a problem of success. The scheme has been so successful in recent years that the arts council has had to turn down many applications for funding simply because the budget has run out. A loan from the Principality Building Society will almost double the total size of the fund to £1.1 million and that will mean that more people will be able to own and collect pieces of art to enjoy in their homes. The Principality Building Society has agreed with the arts council to accept a rate of return on its loan of 3 per cent—about half the normal commercial return that it would have expected. That is a welcome expansion to an extremely worthwhile project, and I confirm this afternoon that the Assembly Government will stand as guarantor for the value of the Principality loan.
The experience of the current scheme indicates that the arts council will be able to afford the 3 per cent payable to the Principality from the 4 per cent levy which it is makes on participating galleries against each purchase, and which also goes towards the cost of administering the scheme. The expansion in Collectorplan will allow more galleries to be registered with the scheme and allow for a greater number of loans, but there will be no changes to the size and terms of the loans. The expanded scheme will benefit artists working and displaying in Wales, galleries in Wales and people wanting to own works of art. It is an excellent example of the private and public sectors working together to promote wider access to art. This is a notifiable transaction under Standing Order No. 21.16. The notifiable transaction involves the incurring of a contingent liability as defined by Standing Order No. 21.19, namely the guarantee of a loan from the Principality Building Society to the Arts Council of Wales.
The maximum estimated amount of the contingent liability is £500,000. I stress that that is a contingent rather than an actual liability, and significant losses are not expected to occur. The contingent liability will run to 31 July 2007. Increasing this plan will increase demand for the producers of the arts of Wales—the sculptors, painters, photographers, textile artists ceramicists, and many more, who make such a huge contribution to the culture of life in our nation.