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The Substation says NAC statement is 'incomplete', clarifies claims regarding finances

The Substation says NAC statement is 'incomplete', clarifies claims regarding finances

The first independent arts centre in Singapore, The Substation was set up by theatre doyen Kuo Pao Kun in September 1990. It was envisioned as a home for the arts - a place where anybody from the arts community could walk in to create and put up works without the fear of failure. (Photo: TODAY/Raj Nadarajan)

SINGAPORE: The Substation on Friday (Mar 5) said it sought autonomy over the space at 45 Armenian Street so that it could “continue to operate it as a multi-disciplinary arts centre and arts incubator”.

This is in response to the statement issued by the National Arts Council (NAC) on Tuesday, in which it said The Substation sought autonomy over the whole space so that it could generate income from venue hire, including the space formerly leased to Timbre. 

NAC’s statement was “incomplete”, said The Substation, which announced that it would close down permanently after moving out.

It also disputed the NAC’s claim that it “invited the current board to co-create the vision for the renovated arts centre” with them.

The NAC “did not refer to ‘co-creation’” in its letter to the board dated Feb 17 this year, the statement from the arts centre said.

“The letter merely stated that The Substation, as a co-tenant, would be ‘consulted to provide inputs for the future of 45 Armenian Street in relation to its precinct’,” it said.

“While NAC did say the Substation could return to 45 Armenian Street as a co-tenant with other groups, it would still have meant the Substation could no longer operate as an arts centre, our raison d’être.

“Even if we had returned to 45 Armenian Street after the renovations, The Substation would have been a diminished presence in the building that it had occupied and defined for 30 years.”

READ: NAC ‘disappointed’ with The Substation's decision to close, says company was ‘increasingly financially unsustainable’

It added that the board did not think this was the “right outcome given the proud heritage of The Substation”.

“We acknowledge the pain that many in the arts community feel about the decision we have taken. We feel the loss ourselves, profoundly.”


The Substation reiterated in its statement that it is an arts centre, not an arts group, noting that the “financial and operating models of the two are very different”.

It cited the Esplanade – Theatres by the Bay as an example of an arts centre, saying that the two venues are similar though The Substation is on a “much, much smaller scale”.

“As the operator of an arts centre, we have autonomy over our physical spaces, which we dedicate primarily to arts usage,” it said.

“We attract and can select suitable hirers, both short and medium term, which provide a ‘community effect’ at the space, over and beyond their revenue contribution.”

It added that The Substation, like the Esplanade, also has spaces it would lease out for commercial use, such as the garden area formerly occupied by Timbre, and for use by arts groups at “non-commercial, highly subsidised rates”.

READ: The Substation to close permanently after moving out of Armenian Street building

“Just as the Esplanade, we have employees who oversee building facilities and venue management, and we bear the costs of property maintenance and utilities,” it said.

The Substation also disagreed with the NAC's comparison of its reliance on government funding against other Major Companies.

The NAC's Major Company scheme supports selected arts organisations using public funding. 

The NAC’s statement mentioned that The Substation’s reliance on government funding – which averages 86 per cent of annual income – is the highest among its Major Companies. It also said it had been concerned as The Substation was "increasingly financially unsustainable" after 31 years of funding support.

“The operating model of an arts centre is very different from that of a theatre, dance or music company,” The Substation said.

It noted that the Esplanade’s headline figure for deficit before grants for the financial year 2019-2020 was S$54,184,000, while its grants for the year and government subvention-rental of property in aggregate amounted to S$56,155,000 - more than 100 per cent of its deficit before grants, The Substation highlighted.

It also responded to the NAC’s claim that programming made up a "small proportion of total operational expenses" - at 23 per cent on average from financial years 2017 to 2019 - while incurring more than S$1.5 million in salaries and other manpower costs.

The Substation clarified that the S$1.5 million was incurred over three years.

“We presently have 11 employees in total,” it said. “We believe in paying fair wages to our employees and we certainly do not overpay them.”

It added that calculations using published audited financial statements for financial years 2017 to 2019 showed that programming costs were on average 35.7 per cent of the total operational expenses, not 23 per cent as stated by the NAC.

“There are different ways to look at expenditure on programming as a proportion of total operational expenses,” it said.

“If you include the remuneration of employees whose work encompasses artistic programming … as part of programming costs, our percentage of expenditure on programming as a proportion of total operational expenses increases to 76.3 per cent on average for FY17 to FY19.”

The Substation again used the Esplanade as a point of reference, saying headline programming costs for the Esplanade came up to 14 per cent of its total expenditure in FY19/20, citing the Esplanade's own annual report.

Taking into account the financial support from the NAC and the assumption that it cannot raise “substantial private funding”, The Substation said it would have to reduce staff numbers by more than half and have its programming budget and bandwidth “drastically reduced” once it vacates the premises.

“We believe that this would severely impact the Substation’s mission to nurture younger artists. The consequence of this is not merely a tweaking of the Substation’s vision, but a drastic divergence from its original mission,” it said.

“In other words, the Substation will no longer be the Substation as we know it.”

The NAC responded to The Substation's statement later on Friday, saying the Esplanade "plays a different roles than Major Companies in our arts and culture lanscape and is provided with funding and held accountable for outcomes which are not asked of Major Companies".

"The Substation should appropriately be compared against other Major Companies, some of which also operate premises and arts centres similar to the Substation, but do not rely on government funding to the same extent," it said.

"NAC 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."

Source: CNA/ga(ac)


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