The Labour leader of Cardiff council explains why he helped launch the Cultural Cities Enquiry.

Within living memory, the landscapes of Britain’s core cities have been transformed. Once smog-filled bastions of heavy industry, they have faced down the spectre of managed decline, and emerged as vibrant hubs, dominated by the knowledge economy and services. While each city responded differently to the challenges of deindustrialisation, the role of culture in regeneration has been a consistent theme.

Glasgow’s European City of Culture programme in 1990 was a turning point for that city, as it was for Liverpool in 2008. In Cardiff, sports and culture were brilliantly and inventively used to transform the city – culminating in our hosting of the UEFA Champions League Final and being named the UK’s first Music City. Across our cities, a buzzing cultural scene has become a major part of what makes our cities such great places to live, particularly for the young, creative people who are so vital in the 21st century economy.

As a result of this transformation, modern Britain is a global creative powerhouse. Go to any country in the world and you will meet people who listen to music, play video games, read books, watch films and plays created in our cities. The creative economy is one of our most important export industries, accounting for almost 10 per cent of the UK’s GVA and around 2.5m jobs.

Building creativity into our education system, as we are doing in Cardiff, creates children who are able to think differently to adapt and to invent, who will be able to respond best to challenges like automation that are already disrupting the jobs market.

But the benefits of culture are not restricted to the balance sheet. Culture is about people and the places they live. It brings us together. It creates shared experiences and strengthens bonds between people and communities, so important when there are some – a tiny, tiny minority – who are trying to do the opposite, by creating division and spreading hate.

Culture and the arts can make a massive positive difference across all aspects of city-life, culture – but this is now under threat. A decade of austerity has left the financial model which underpins culture in British cities creaking at the seams.

It will soon be in crisis. New solutions and radical changes are needed, recognising the simple truth that the traditional approach to funding and supporting culture in the Core Cities is broken.

Organisations like the one I lead are contending with spiraling demand and shrinking resources. Public sector investment has long been the backbone of UK cultural provision, but after a decade of austerity we cannot fund it the way we used to.

The challenge is compounded as technology changes the way culture is consumed, and the persistent blight of inequality leaves a significant proportion of our most disadvantaged communities with limited access to the arts.

That is why the time is right for the Cultural Cities Enquiry. The enquiry will bring together cities, UK arts councils, and leaders from a range of sectors to consider how we can ensure our cities remain world-leaders for culture and creativity.

Our aim is to create a set of practical recommendations that will enable city leaders and cultural institutions to make the best use of available resources and set up new channels of investment.

Successive governments haven’t yet provided the tools to realise the economic potential of cities and they haven’t fully unlocked their cultural potential either.

Given the right policy levers, cities can add to the UK’s formidable reputation as a creative powerhouse. We know that greater local flexibilities are key to success – yet UK cities currently control only 5-7 per cent of their tax base. This is five times less than the OECD average and ten times less than US cities.

The Basque city of Bilbao, for example, secured the Guggenheim Museum because its city government had freedoms on local spending and tax retention that UK cities can only dream of.

In New York the development of leading cultural institutions – Including the Museum of Modern Art and the Metropolitan Museum – were carried out through a local trust. This allowed for culture bonds, triple tax-exempt debt and borrowing to fund growth.

Our cities are already experimenting with new approaches. Newcastle recently helped Live Theatre build a new headquarters by offering a loan at preferential rates; Bristol struck a new deal with funding agencies; while Nottingham and Sheffield both invested in creative industries quarters, stimulating the local economy. But, given the scale of the funding challenge, we are a long way from where we need to be.

This enquiry, that will report its findings this autumn, is the vital first step on a journey towards a new and sustainable way of funding culture in our major cities – where creativity can flourish, and where the transforming power of the arts can be enjoyed by all our citizens.

Cllr Huw Thomas is leader of Cardiff council. To find out more about and submit evidence to the Cultural Cities Enquiry, click here.