DMO review funding update

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I had the benefit of hearing a presentation on the DMO review from Nick De Bois, of asking a question on and getting a clear answer around what precisely the recommended financial ask of Government was and of then having a discussion with Nick at the fringes of yesterday’s TMI Annual Conference.  The key public message from Nick was that, despite next week’s expected headline CSR allocations announcement, it isn’t too late yet to influence them, nor critically to influence the detail internal departmental dispersal of funding thereafter and some of the key decisions on the shape of any implementation in the weeks that follow.

The point I made to Nick in the Q&As, and I may be wrong, is that the financial ask in the independent review recommendations wasn’t explicit enough to give clear understanding of his intent and therefore to gather unquestioned support for the full recommendations. If the scale of the funding ask doesn’t appear to match the scale of the aspiration, then what?

I accept that this perception might be as a result of my close involvement in half a dozen previous attempts at radical change, the revision, disbandment and on one occasion about face around national, regional and local tourism structures, sometime including but always impacting, usually negatively, on DMOs. I may just be reading too much or too little into what was written in the report or reading too much between the lines that isn’t there. Regardless, the point has now been made.  It wasn’t rejected by Nick and I and all those present were told, that if they thought it necessary to explain the funding recommendations, we were free to do so, particularly, if it helps encourage maximum lobbying of local MPs etc. for that funding ask in the days and weeks still available to us.

I should stress what follows is my personal interpretation of what Nick had to say yesterday about funding within his independent recommendations to DCMS and the Westminster Government. Recommendations that Government don’t have to accept, or that they can interpret or adjust as they see fit and/or chose to deliver in a differing or adjusted manner to that also recommended within the report.

Nick’s recommendation was for a figure of £17m pa for the life of the coming 3-year CSR funding cycle, or £51m in total. This was envisaged as being an additional sum to be made available to VB/VE via DCMS for use by VE, on top of the VB/VE DCMS allocations. Coincidentally, much the same figure, means and manner as the previous, initial 3 year Discover England Fund.

The basis of the £51m calculation is an estimate of something in the order of 17 tier one, or hub DMOs that between them would cover all of England. Each one getting the best part of a million per year to secure their core destination management functions and support (fund?) nationally agreed key activities in their partner tier two, local destination management organisations, across the combined geographic area of the hub and spoke’s DMO areas.  Tier three, mainly smaller, probably purely marketing focused bodies, just carry on as they see fit, unaffected and potentially unsupported by the activities of the tier one and two organisations. Albeit that this might not actually reflect the realities of the complex interrelationships already in existence? 

VE would be the administrative, accountable, commissioning body and, in Nick’s vision at least, would not top slice much (if any?) of the allocation, the role being resourced from within VE own core DCMS funding.

I also surmised that there is no certainty that DCMS have asked for the full £51m from Treasury, nor to be fair any that they have not.  Neither is there any certainty that Treasury will agree to allocate a the full £51m or potentially any lesser figure DCMS felt justified in asking for.  The only certainty is that absolute best we might expect is £51m over three years.

 I also suggested to Nick that the worst-case scenario might not be, getting nothing but getting something for three years or just long enough to start make meaningful change, only to lose some or all the funding together potentially with the new ways of working that we will inevitably have become reliant upon (the nub of why we are where we are, DMO wise now in my opinion). That is unfortunately the way of the world and of Government funding and policy decision making. Meanwhile, nothing ventured nothing gained; asking for nothing or asking for indefinite guaranteed funding isn’t really an option. Ultimately the new system created, whatever it is, will need by year three of each cycle to be in a position to justify its own existence. If it can’t then, if necessary, it must be prepared to adapt and sustain itself. Notwithstanding of course the core market failure argument that underpins much of Nick’s recommendations. DMO’s exist largely because there is a need for them to exist and it is a need that demonstrably can’t be sustained by the private sector acting alone.

What needs doing now? We should all now be lobbying for that upper figure as the sum needed to make the bulk of the existing English DMOs function in unison to deliver the Government’s wider national priorities.  Even if a lower sum is offered the £51m and the rational behind it should remain clearly in mind: something like, 17 similarly scaled bodies, delivering similar things in return for each getting an annual grant of c £1m to delivery agreed objective among and via their tier 2, spoke partners.  The final number of hubs, the comparative scale of each and variations in what each agree to deliver, may well adjust the division of funding between them. Nonetheless, 17@c£1m pa is a good rule of thumb for what the author of the recommendations envisioned and what we therefore should whole heartedly support.

There are any number of scenarios that may now play out and variations within each.  The obvious one is that perhaps DCMS asked for, or now gets less than £51m additional allocation from Treasury.  We can accept whatever the additional funds are and then focus on making the vision behind the recommendation work with less funding for each hub or perhaps fewer hubs, for example. Or, for a period of time at least, we can focus on lobbying DCMS to make up some or all of any shortfall between the £51m ask and whatever sum is received from Treasury and doing so from within the headline DCMS allocation made to cover the full DCMS portfolio (robbing Peter to pay Paul). Knowing what figure DCMS felt comfortable asking for, would be an extremely useful. However, even if it were less than £51m it shouldn’t be allowed to detract from lobbying for the full amount.

The second obvious scenario is perhaps Treasury making no additional allocation to DCMS to fund the recommendations.  We could just roll over and accept the recommendations are effectively dead, or at best postponed until the at least the next CSR round and perhaps look to deliver the changes in some other way with some other funding (what funding and particularly what funding that is going to deliver a consistent pan England approach?). Or we can lobby DCMS to fund some or all of the £51m, directly from within the DCMS portfolio headline allocations.  Again, robbing Peter to pay Paul but with even more danger of, robbing Peter to pay Peter.  I.E. taking some of the money out of the already overstretched VB/VE budgets and not all from other parts of the DCMS portfolio. 

We must be prepared to react quickly to any initial announcements about the funding for the implementation of the independent DMO review. Being ready, if necessary, to lobby DCMS for either: top up or full funding from within their own portfolio’s allocations in the critical weeks after the headline announcement and before the internal departmental dispersal agreements are finalised.  Essential the period in the early weeks of November and possibly longer?

There are of course other scenario and issues that might emerge, some over a longer period perhaps, that are at variance the recommendations. For example, far more or far fewer hubs than imagined, a differing role for VE and or greater need for top slicing of whatever funding is made available, all of which would adjust the cost, funding benefit ratio.  These are all things that need to be monitored and addressed, as and when necessary, probably only once the total funding figures are known.  Front and centre of mind must remain: what did the report recommend and what was the vision and intent.  Essentially, Nick has handed the report over and he has no formal role in the implementation. That is a matter for DCMS and VB/VE and I would suggest now a matter for the DMO community.  It is one that community needs, as far as possible, now to grip and help direct. I hope the information above helps others to get a grips, rather than confuses the issues further.

The last major review of Tourism structures in England made very clear recommendations for Visit England. Within, as I recall it no more than a few months, almost the exact opposite of those recommendations was agreed by DCMS and enacted shortly after.  That decision, at the very least, made an already difficult DMO environment in England, less sustainable. At worst it contributed directly to creating the progressively more chaotic “DMO” landscape.  The same landscape that Nick’s recommendations now aim try and give some unified structure to, whilst recreating a national unity of purpose in those areas and on those matters that have very real strategic, tactical and operation importance to all those working in tourism, leisure and the visitor economy across England.

There is still a narrowing window of opportunity to influence the key issue of funding and, dependant on the outcome of that, a wider window of opportunities to influence the all-important detail beyond that.  Please don’t waste these opportunities.

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