Save up for a night at the opera: A seat in the gods now costs pounds 27.50, and the Royal Opera House has a budget deficit of pounds 3m. Will the Government bale it out? Not likely, says David Lister

This summer's annual dinner of the Association for Business Sponsorship of the Arts at the Tate Gallery was, as usual, a jolly occasion. The after-dinner speaker was David Mellor, the Secretary of State for National Heritage, who said it was too hot to make a long speech and looked as if he was simply going to utter a few pleasantries.

Then he suddenly said: 'I feel a great deal more comfortable listening to great art in the company of a good cross-section of the British people, rather than just a few who can pay outrageous prices in order to experience it. Art is not going to flourish if it becomes ghettoised among the super rich.'

No one was in any doubt about the institution to which he was referring. Mr Mellor does not like the way the Royal Opera House is being run. Above-inflation price rises and the ending of the policy of not increasing prices of the cheaper seats do not fit well with the idea of a classless society. And Mr Mellor is not alone. An Arts Council appraisal team headed by Baroness Warnock, due to report next month, will criticise management style, artistic planning and budgetary policy.

The ROH's problems are many. It receives a smaller proportion of its funding from the state than any other European opera house (it gets 38 per cent of its income from the Arts Council and has to generate 62 per cent itself); it has a deficit of more than pounds 3m; it is committed to a pounds 250m development plan, hoping, with great optimism, to raise the money in a recession; its industrial relations are poor, with the last few years seeing the Royal Ballet and the musicians of the orchestra taking unprecedented strike action; it does not have a sponsor for a single opera next season; and average seat prices for opera are nearly pounds 50, with even a seat in the gods costing pounds 27.50.

Those problems are exacerbated by a barely disguised personality clash between Jeremy Isaacs, general director of the Royal Opera House, and Mr Mellor, who dislikes Mr Isaacs' public complaints of underfunding. It is unclear how the clash originated; but there are reports that Mr Mellor was annoyed by an incident when he was Arts Minister two years ago. Due to a mix-up at the Royal Opera House, his wife was not welcomed officially to a gala evening and was left to find her own way to her seat, getting into some difficulty because of the dark and her poor eyesight.

Though neither man is foolish enough to allow mutual antipathy to obstruct discussion about the future of the Royal Opera House, it clearly is not to the institution's advantage. Mr Mellor goes out of his way to praise the English National Opera, and, as Chief Secretary to the Treasury, secured money for it to buy the freehold on its home, the London Coliseum. He never seems to praise the ROH.

There is speculation that the price of any government rescue may be Mr Isaacs' head when his contract runs out next year. But the denigration of Mr Isaacs may be a simplistic reaction to the problem of what should be the Royal Opera House's role.

Mr Isaacs' achievements are not negligible. When he arrived, the ROH was overstaffed; union agreements prohibited television and piazza relays of operas; the Royal Opera chorus took a commendable anti-ageist policy to extremes, giving Carmen admirers old enough to be her great uncles; and the Royal Ballet operated an even stranger anti-star policy of Buggins' Turn, which seemed to result in anyone in a tutu having a shot at Coppelia.

Over the last four years, the Royal Ballet has nurtured or imported genuine international stars; the Sadler's Wells Royal Ballet has been successfully transplanted to Birmingham; the staff has been cut; the opera chorus has been drastically improved. The appointment of Nicholas Payne, of Opera North, to head the Royal Opera company from next year has been widely welcomed. And already, after a few mixed seasons, the ROH has begun to find its own house style and has just had one of its best seasons for years.

The problems are bigger than Mr Isaacs' personality or managerial style. As Graeme Kay, editor of Opera Now, says: 'Whether or not Isaacs' head rolls is irrelevant to the problem that faces the Royal Opera House, which is the problem of the building and the financing of the operation.' He adds: 'There's no doubt that it's more and more difficult for opera lovers to get into the Royal Opera House. People either say they don't go any more because they can't afford it so they go to the ENO, or that whereas before they used to go six times a year, now they go only once.'

Pricing is a vicious circle for Mr Isaacs. Insufficient subsidy means having to put prices up. That means angering the Arts Council and the Government and risking a minimal grant increase, so prices have to be raised still further.

Mr Isaacs denies that high prices make the Royal Opera House an elitist institution. It is expensive but not elitist, he says. People should save up to go to the opera, as he did when he was a young man. His argument is outdated, for accessibility in the Nineties is not equated with saving up for a treat.

There seems no easy answer to the Royal Opera House's problems, barring a major funding increase after the Autumn Statement, which looks unlikely. One interim solution, which Mr Isaacs would resist but which merits consideration, is to postpone or scrap the development plan, aside from the most urgent health and safety improvements. For all the millions of pounds spent, there will be only a handful of extra seats at the end of it. Most of the work will be on improving backstage facilities. Granted, these are old fashioned, but there has been no outcry from opera singers.

Spending pounds 250m essentially to improve backstage facilities is a luxury. The national lottery may well provide the money for such a scheme. But for now the urgent need is that whatever money the ROH can raise should subsidise ticket prices. The pounds 100 seats in the stalls for the wealthy and for businesses to entertain guests are irrelevant to the main issue, which is keeping enough seats below the pounds 15 mark to encourage a love of opera among the young, even if it means fewer productions.

This, of course, is no substitute for proper public funding, and - crucially - a public statement from government and Arts Council on pricing policy, and how it should be funded, and on whether the ROH needs to be developed and how that, too, should be funded. If Mr Isaacs and his institution are left to stew, and the price spiral continues, then the Royal Opera House might be forced to go private.

The prospect of a privately run ROH, a Glyndebourne in London, would once have been greeted with horror. But, as Mr Isaacs admits, it is no longer a remote possibility if public funding is not improved.

(Photograph omitted)