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Economic impact study of Victoria Theatre, Halifax
March 2014
Introduction
Appendix E
The Victoria Theatre is a Grade II listed building, located in Fountain Street, Halifax and
recognised as a flagship cultural venue in the Calderdale and surrounding districts.
Victoria Theatre was opened in 1901 as a private concert hall. In 1960 it was acquired by
the Local Council and has remained under their control ever since. The Theatre is not a
statutory service and there is no requirement for the Council to operate the venue.
The Council have carried out numerous refurbishments and improvements over their
period of ownership but the Theatre currently requires further funds to bring it up to
modern standards.
The Theatre is currently financed by a combination of audience ticket sales, stage and
room hire, property rentals and subsidies from Calderdale Metropolitan Borough Council
(CMBC).
What is economic impact?
Victoria Theatre makes a contribution to the worth of the local economy in two ways:
direct and indirect. Its direct impact is made up of straight local spending; for example,
the amount spent on purchasing supplies locally, or the amount spent on resident staff
wages, which is then spent on items such as accommodation, food, and clothes locally.
The indirect impact takes into account the ‘knock-on’ effect which is generated by the
direct impact, where money spent results in more money being spent. An example of this
includes the purchase of supplies from a local company, which results in that company
spending on their staff wages and purchasing other supplies. All that expenditure is
constantly circulating around the local economy, helping to preserve jobs, and boost
economic growth.
The formula for calculating economic impact
The following formulae were devised in 2004 by Dominic Shellard of the University of
Sheffield to calculate a theatre’s economic impact, and to measure the economic impact
of theatre across the UK. This formula has been used by Theatres across the UK to
establish their economic impact on local and national economies
This report uses two main ways of defining economic impact:
The first formula defines economic impact as being purely what a theatre contributes to
the local and national economy and ignores turnover and other earnings.
Formula 1: Calculating economic impact
(Additional visitor spend + salaries + subsistence allowances + goods and services
bought locally) x 1.5
(The multiplier takes into account the knock-on effect in the local economy.)
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Economic impact study of Victoria Theatre, Halifax
March 2014
Formula 2 can be used to define economic impact as the total economic activity
generated by a theatre (in other words, what economic activity an area would lose in total
if the theatre was not there). This second, more comprehensive formula, also includes
turnover (income).
Formula 2: Calculating the economic impact of theatre venues including turnover
(Turnover + overseas earnings + additional visitor spend + salaries + subsistence
allowances + goods and services expenditure) x a multiplier of 1.5
(The multiplier takes into account the knock-on effect in the local economy.)
Including turnover in this formula establishes the scale of the economic activity related to
the theatre, and economic impact is viewed as inputs and outputs, rather than profit and
loss. So, for example, turnover is made up of money from customers, funders and
businesses, and produces a specific economic effect, while a theatre’s expenditure on
wages and supplies produces a completely separate economic effect. It is not a strictly
linear model.
This defines economic impact as what a theatre contributes to the local and national
economy.
Components of the economic impact of Victoria Theatre
1. Additional visitor spend
Additional visitor spend (AVS) is the money spent by people attending a performance at
the theatre, in addition to the cost of the tickets. It covers transport costs, domestic costs,
e.g. babysitters, and any food and drink purchased outside the home.
Although the survey carried out as part of the “Pre-feasibility Assessment” shows an AVS
of £57 on the day of their visit and £34 on meals, it is not clear whether this is per person
(unlikely) or for a group of person (family of 4?).
The Sheffield University report in 2004 calculated an AVS of £7.77 per audience
member, which, given an increase in Retail Prices Index of 32.8% over the last 10 years,
equates to £10.32 currently and this appears a reasonable figure per person to use in
this report.
The number of tickets sold in 2012/13 was 82,990 which would give an AVS of £856,457.
An additional survey covering all aspects of AVS would be required to quantify more
accurately the spending patterns of visitors attending performances. Such additional
survey should cover areas of transport costs and modes of transport, domestic costs and
food and drink.
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Economic impact study of Victoria Theatre, Halifax
March 2014
The AVS can be affected by the Theatre location and the connection with the night time
economy, none of these factors are specifically considered in this report.
2. Salaries
£405,579 was spent on salaries in the 2012/13 year.
3. Subsistence allowances
Subsistence allowances are paid to some performers and support staff, who visit Victoria
Theatre with each production, to cover the cost of travel, accommodation, food and other
living expenses. In the year 2012/13, no subsistence allowances were paid.
4. Goods and services bought locally
Supplies purchased locally totalled £322,114. This figure includes Local Council central
costs recharged to the Theatre which would be re-circulated within the local economy
either through Council wages or supplies & service bought locally.
Calculation of the total economic impact of Victoria Theatre
Formula one
By feeding the above components into the formula, it can be seen that the total economic
impact of Victoria Theatre in the year 2012/13 on the local economy was: £2,422,188
((£856,457 [AVS] + £405,579 [salaries] + £352,756 [goods and services]) x 1.5)
Formula two
If the turnover of Victoria Theatre of £1,803,958 is included, the total economic impact in
the year 2012/13 was: £5,128,125
((£1,803,958 [turnover] +£856,457 [AVS] + £405,579 [salaries] + £352,756 [goods and services]) x 1.5)
Conclusion
This study has demonstrated, therefore, that Victoria Theatre is not just a major
cultural presence but a significant economic power in Halifax and Calderdale, as
well as West Yorkshire generally.
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Economic impact study of Victoria Theatre, Halifax
March 2014
Risks and limitations
 No measure of the social or cultural benefits of the Theatre’s activities is factored
in.
 No in-depth analysis of the Theatre’s expenditure has been carried out, due to
time constraints and the inherent limitations of the pre-feasibility study.
 The 2014 survey of additional visitor spend does not directly support the figure
used due to limitations in the survey.
 Turnover includes all sources of income on the basis that these would all cease
should the Theatre not exist. Certain income streams (e.g. property rents) would
probably continue and other new income streams generated.
 In May 2012 a report for the Arts Council – “Measuring the economic benefits of
arts and culture” – was carried out and considered the various models for
assessing the economic and cultural impact. This report acknowledged that the
“Shellard” model was widely used by UK Theatres. It did, however, conclude that
the following areas were not taken into account in the standard model:
o displacement and substitution effects – money spent on the Theatre would
divert funds from other local venues
o leakage – not all funds are spent in the local area
o deadweight – some spending would occur locally anyway; this mostly
applies to local residents
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