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ARTS COUNCIL ENGLAND ANNOUNCES FUNDING DECISIONS AND NEW NATIONAL PORTFOLIO OF ARTS ORGANISATIONS

30 March 2011

Today Arts Council England unveiled its National portfolio of funded organisations, following its landmark decision in 2010 to introduce a new funding system and framework for the arts in England, and the 29.6% grant in aid (GIA) cut to its 2011-2015 budget from government. 14.9% of this cut has been passed on to the budget for portfolio organisations.

  • Reduced grant in aid budget (down 14.9%) in context of wider public sector cutsArts Council cuts strategically – no ‘equal cuts for all’
  • National portfolio of 695 organisations replaces previous RFO portfolio of 849
  • 110 new organisations brought into the mix
  • Focus on excellent organisations and exceptional individual talent, with decisions shaped by a 10-year vision for the arts
  • Touring receives major support with £18 million Lottery a year earmarked for portfolio organisations
  • £10.5 million Lottery a year also targeted at work with children and young people, to ensure vital educational work continues
  • Extra £12 million Grants for the arts Lottery money freed up for small organisations
  • Regret as good applications turned down, including 206 existing regularly funded organisations

The new National portfolio comes into operation in April 2012, and will be shaped by an ambitious 10-year strategic framework against a challenging economic backdrop.

Dame Liz Forgan, Chair of Arts Council England, said:

‘This is about a resilient future for the arts in England. We have taken the brave path of strategic choices not salami slices which has meant some painful decisions, and it is with great regret that we have had to cease funding some good organisations.

‘But we will still be supporting excellence, exceptional talent and successful risk-taking; helping organisations to get their great work out far and wide; backing strong leadership and cultural entrepreneurialism; supporting resilient organisations that can thrive as well as survive; and encouraging work that really enthuses children and young people – because that’s where it all begins.

‘We have tried to go about this difficult process collaboratively, and with honesty and clarity of purpose. We have been helped enormously by having a 10-year shared vision for the arts, which has focused our minds’.

Alan Davey, Chief Executive of Arts Council England, said:

‘There have been some really hard choices as we had so many good applications – more than we were able to fund. In advance of the Spending Review, we said “cut us, don’t kill us”. Well, with the help of Lottery income, for which we are grateful, we’re alive and kicking. But we do regret that we have been unable to fund perfectly good organisations, and I know this will be taken hard by those affected.

‘After a thorough process, we believe we have achieved a balance of continuity and change, and of local and national. And we’ve enabled artists and arts organisations to continue to create the great art from which so much springs. This is a collection of decisions that will mean the arts will not retreat from the important part they play in our national life’.

A vision-led National portfolio

The portfolio has been shaped by a set of five shared goals, developed through a major consultation with all those working in the arts, and detailed in the Arts Council’s 10-year strategic framework Achieving great art for everyone.

These goals are focused on: supporting excellence in all its forms; extending audiences and deepening their experiences; ensuring we have leaders from all backgrounds and developing skills through collaboration; increasing the resilience of organisations; and ensuring that every child and young person experiences the richness of the arts.

The portfolio consists of a rich variety of organisations across the country, reflecting the real quality and excellence of the arts in England. Strenuous efforts have been made to ensure that ambition, artistic exploration and pioneering spirit are kept alive, that great work can continue, that inspirational leadership is developed and supported, and that a vibrant countrywide ecology is, as far as possible, maintained. Many artists and organisations will be entering for the first time, bringing a fresh source of energy and renewal.

In making its decisions, the Arts Council has endeavoured to support and protect:

  • a wide range of risk-taking and innovative organisations (eg Manchester International Festival; Artangel; Kneehigh)
  • the great flagship organisations, encouraging them to take on wider responsibilities (eg National Theatre; Royal Opera House and its Thurrock operation)
  • the backbone of regional theatre (increased by 1.1% in cash terms)
  • the iconic new modern and contemporary arts galleries in the regions (eg The Hepworth Wakefield; Turner Contemporary)
  • symphony orchestras music (limited to 2.3% cash cut) – but also smaller adventurous music ensembles (eg Birmingham Contemporary Music; Psappha, Aurora)
  • poetry, new writers and literature in translation (eg Faber and Faber; Arvon Foundation)
  • great choreographic talent (eg Wayne McGregor; Hofesh Shechter; Siobhan Davies)

An open and transparent process

For the first time in the Art Council’s 65-year-old history, the portfolio of funded organisations has been created through an open application process. This replaces the continuous system of funding (Regular Funding) that had, over the decades, led to a relatively static portfolio with limited entry points.

Arts Council England received 1,333 applications to join the National portfolio, submitting bids for a total of £1.4 billion. The available GIA budget for the portfolio for the same period was £950 million. Of Arts Council England’s current 849 regularly funded organisations (RFOs), 791 chose to apply and 585 were successful. Of the 542 new organisations that applied, 110 were successful. The full list of 695 National portfolio organisations can be found here.


Decisions and judgement

Funding decisions have been made on a consistent basis across the country, against published criteria, and drawing on detailed regional knowledge, artform expertise and a national overview.

The decision-making process involved two distinct stages: 1) an assessment of each application on its own merits and its ability to deliver against the goals set out in Achieving great art for everyone; 2) a balancing of the entire portfolio to achieve the best result for the arts overall. The final decisions were taken by National Council and the nine Regional Councils.

Fewer funded, with wider reach

The new portfolio consists of 695 organisations (154 fewer), but its vision for the future is undiminished.

This is because the Arts Council has taken a decision that, even in times of real constraint, the arts should progress (with all the benefits that they accrue for the country), as opposed to languishing or going into decline. As a result there have been some really hard choices.

Using published criteria, the final decisions made by National Council and the nine Regional Councils have resulted in a portfolio that shows the Arts Council is:

  1. supporting, rather than holding back, excellent organisations who have just got into their stride – or have made quantum leaps – enabling them to deliver to their full potential and achieve the long-term vision for the arts in this country

  1. maintaining, rather than destabilising, organisations who have just reached the point of becoming artistically and commercially resilient

  1. offering portfolio funding for the first time to a number of exciting new organisations, many of which have come up through the Grants for the arts Lottery programme and deserve to be put on a proper footing

However – and with enormous regret – the Arts Council was not able to fund a number of organisations, many of which have been doing a good job.

Each organisation has received the level of funding judged appropriate to its individual circumstances and to the programmes set out in their applications, rather than applying a policy of ‘equal pain for all’. For example, many are receiving increases due to a major transformation of their organisation (eg The Hepworth Wakefield); because they will greatly expand their programmes of activity (Stratford Circus); or because they provided a compelling vision in their application (Farnham Maltings). Others will be receiving decreases that may require them to refocus their work.

A small number of organisations (eg Artangel) have been offered a longer funding period, stretching beyond 2015, in response to their particular applications and to test the potential of a more flexible funding approach. These organisations will be part of a pilot project so that the benefits of longer funding periods can be properly evaluated.

There has also been a strategic decision to reduce the number of intermediate organisations that the Arts Council has traditionally funded, such as audience development agencies and membership umbrella groups, although there has been valuable work in these areas. The Arts Council will be looking into ways in which it can build on this work, but the focus will be on programmes of activity and reduced overheads.

All existing regularly funded organisations (RFOs) who were unsuccessful in their applications have 12 months of remaining Arts Council funding to allow them to explore alternative sources of support or adapt their business plans.

National Lottery funding deployed alongside Grant in aid

Following the Government’s welcome decision to increase the share of Lottery money to the original four good causes, the Arts Council’s Lottery income is forecast to rise over the settlement period from an estimated annual figure of £149 million in 2010/11 to £223 million in 2014/15.

Lottery money cannot be used to directly substitute for Grant in aid, but two distinct investment areas have been indentified to support the National portfolio.

Major support for touring

£18 million a year has been immediately earmarked to support the portfolio in the priority area of touring – an area that has been identified through the application process as requiring direct intervention.

This will be used, in line with Lottery directions, to help ensure that more people have access to first-class artistic experiences wherever they live in the country. It will also safeguard and develop vital work relating to reach and engaging broader audiences.

Since the October Spending Review, inflationary forecasts have been revised upwards, meaning that the 14.9% real terms cut to funded organisations (‘real terms’ factors in the eroding effect of inflation) is now closer to 17%. Local authority cuts and cuts to higher education are also beginning to have a major impact on arts provision, and the developing picture is looking extremely grim. This strategic injection of Lottery money means that organisations will be able to maintain their touring offer, despite a combination of declining public funding, escalating costs and no inflationary increases.

Targeting work with children and young people

£10.5 million Lottery a year will be allocated through the National portfolio to a group of ‘Bridge’ delivery organisations, who will provide a direct connection between the work produced by arts organisations and schools and communities in their area – a gap left by the winding up of the £38 million Creative Partnerships scheme. This is work that is also particularly vulnerable at a time of public sector cuts. Some of the organisations undertaking this work, such as the Royal Opera House’s Thurrock operation and Sage Gateshead, will also take the lead – along with Youth Music – in implementing the recommendations in the Henley Review on music education.

Sharing leadership and expertise

Over the next 6 months, tailored funding agreements will be negotiated with each organisation. In the course of this process, we hope to identify a small number of ‘Leadership’ organisations, chosen for their ability to take responsibility for the development of the arts beyond their organisations, not just for the work they do. This is a new idea, designed to generously spread expertise – for example, in fundraising, digital skills and talent development – to organisations who have less resource and capacity. These ‘Leadership’ organisations would be at both a national and a local level and would share the Arts Council’s responsibility for developing the sector. They will be announced in September 2011.

Notes to editors

A full list of all the organisations included in the new National portfolio can be found here

How the budget works over the four-year settlement

Following the 29.6% real-term cut to the Arts Council’s GIA budget for 2011 to 2015, announced in the Government’s Spending Review, Arts Council England decided to limit the cut to the budget for funded organisations to 14.9% real terms (6.5% cash) over the four-year period. This 14.9% cut represents the impact on the spending power of organisations.

Lottery income, in contrast with the declining grant in aid from government, is projected to rise over the same period (by £5 million in 2011/12, £29 million in 2012/13, £7 million in 2013/14 and £2 million in 2014/15). This money will be used, in line with Lottery directions, to fund projects that are additional to core government spending. Together, National portfolio funding and Lottery income will be used to complement each other, ensuring that investment goes where it is most needed.

From April 2012, Lottery funding will be allocated against three areas, ‘Strategic’, ‘Capital’ and ‘Grants for the arts’, so that it can be used in the most targeted way. The National portfolio application process is Lottery compliant so that Lottery can be earmarked, where appropriate, to support the portfolio.

2011-12

For 2011-12, the Arts Council delivered an across-the-board cut of 8.7% in real terms (6.9% cash) to the majority of its organisations, providing a quick decision so as to give time to plan (announced 25 October 2010). However, in order to minimise this cut, funding was stopped for the two largest non-arts producing organisations: Arts and Business and Creativity, Culture and Education (the latter following the decision to end the Creative Partnerships scheme), giving them a year’s notice on 50% funding. In the larger context of the 29.6% overall cut, the Arts Council also cut its Development funds by 64% and was asked to reduce its operating costs by a further 50% (to be implemented in 2013/14). The costs of administration are already low, standing at 3.4% using the current Charity Commission definitions.

2012-13 to 2014-15

2012-13 to 2014-15 will see a further real-term cut of 6.2% to the budget for funded organisations, and this is the starting point for the new National portfolio.

Strategic Lottery funds attached to the portfolio

In the past, an estimated £20 million of Lottery income a year was used to support the portfolio of organisations – either for transitional awards relating to major new buildings, or for repeated Grants for the arts awards as a means of extending the arts programme.

From April 2012, £18 million of Lottery income will be attached to the National portfolio and earmarked for touring. A particular focus will be on areas and communities across the country that have little or no access to high quality arts.

A further £10.5 million a year will be used to establish and fund 10 delivery organisations who will bridge the gap between arts organisations and schools and communities.

National portfolio organisations will no longer be eligible to apply for the Grants for the arts programme, which will give the small, the new, the community-driven and emerging artists a better chance of success.

Total investment picture

Strategic funds (budget £202 million)

The list of priority areas for the strategic Lottery fund, aligned against each goal in Achieving great art for everyone, includes: touring; audience development; children and young people: leadership and organisational development; digital innovation to broaden reach (building on the recent partnership announced with the BBC Academy); talent development; and philanthropy (a £50 million match-funding scheme has recently been announced).

The Arts Council will use these strategic funds in partnership with others, commissioning key development work from organisations on behalf of the sector (National portfolio organisations will be eligible), providing a shared approach to the delivery of these priorities, and helping to position the arts sector within the wider creative and commercial economies.

Capital programme (budget £200 million)

The capital programme will be focused primarily on maintaining the built infrastructure of the arts in England, and on the development and enhancement of existing facilities, including making galleries and venues more sustainable and energy efficient. There may be a few ambitious projects (there is currently an action research programme assessing the value of different approaches to capital investment) but we will not see the large-scale capital building programme that has been a feature of the last 15 years and that has had such a major regenerative effect on the landscape.

Grants for the arts (annual budget £48m)

The open-application Grants for the arts scheme, which is currently one of the best ways for exciting initiatives to get off the ground, will be extended and reserved for projects outside of the portfolio. As portfolio organisations are no longer eligible, it is estimated that £12 million a year will be freed up, making it readily responsive to new ideas, and to spotting and nurturing new talent. Some good organisations or artists’ companies who were unsuccessful in their portfolio bids may find that this is more suitable to what they were proposing as it is focused on specific projects.

Arts Council England champions, develops and invests in artistic and cultural experiences that enrich people’s lives. We support a range of activities across the arts, museums and libraries – from theatre to digital art, reading to dance, music to literature and crafts to collections. Great art and culture inspires us, brings us together and teaches us about ourselves and the world around us. In short, it makes life better. Between 2010 and 2015, we will invest £1.9 billion of public money from government and an estimated £1.1 billion from the National Lottery to help create these experiences for as many people as possible across the country. www.artscouncil.org.uk