From April 2012, a new funding system will replace the current Regularly Funded Organisations system (RFO), which provides regular funding to 850 arts organisations in this country.
The system goes live today with the launch of an open application process, to which all existing organisations are invited to apply. New organisations will also be eligible for funding.
Decisions will be made in the context of a clear set of strategic priorities and the reduced resources available. The Arts Council is limiting the real-terms cut to the budget available for funded organisations over the next four years to 14.9%. It also has to operate within a much reduced overall budget of 29.6% over this period.
Not all organisations will be successful; some may receive more money, and some may receive less. The new portfolio will be smaller than the current one, with the potential loss of more than 100 organisations by 2015. But, by the end of the process, the Arts Council will be able to unveil a portfolio of organisations that has been shaped by an ambitious ten-year plan. This is preferable to maintaining a large portfolio that will be progressively debilitated by cuts over the course of the settlement.
Liz Forgan, Chair of Arts Council England, said:
“While the funding cuts will have a severe impact on our budget, they will not dent the shape of our ambitions for the arts and audiences in this country. We are determined to take a long-term view, and to achieve the goals set out in our new ten-year strategic framework.
“Salami slicing our portfolio of organisations would never have been an appropriate long-term response, regardless of our settlement. That is why a vision for the future is so important to us.
“We want to build a portfolio where organisations, large, medium and small, are able to prosper as well as survive.”
The new funding approach arises out of a major consultation – with all those involved or interested in the arts – around the Arts Council’s ten-year strategic framework, Achieving great art for everyone. This endorsed a move to a more flexible and focused system of funding around a set of five shared long-term goals (see Executive Summary). The system has been designed to be transparent, efficient and fair – producing the best results for the arts overall.
The four major changes from the existing RFO system are:
- The new system will be based on an open application process for all organisations, rather than a continuous system of funding that has led to a relatively static portfolio
- Funds awarded will be for a fixed term of normally three years, but there will be the flexibility to have variable funding terms of as little as two years or as much as six years
- The funding agreement with individual organisations will be tailor-made, based on the delivery of shared goals and the fulfilment of clear criteria, rather than the box-ticking targets of the past
- The funding agreements will be based around ‘strategic’ and ‘programme’ relationships with organisations, rather than a ‘one-size-fits-all’ relationship
Lottery monies will continue to be used alongside for some limited investment in capital projects, for strategic opportunities, and for Grants for the arts – the open-application Lottery scheme that is focused on funding artists and developing talent. Grants for the Arts will have more money made available for the new and the innovative.
‘Strategic ’and ‘Programme’ organisations
The new approach envisages two types of relationships with arts organisations:
- There will be a small proportion of ‘strategic’ organisations
- There will be a larger proportion of ‘programme’ organisations that are funded on the basis of their programmes of work.
The former are those organisations with whom the Arts Council will form a strategic alliance. These organisations, which form the backbone of the arts in England or who have an important strategic role, will take responsibility for the development of the arts beyond their organisations, not just for the work they do. They will be expected to demonstrate excellence and leadership at a national or local level.
The latter are those organisations and individuals who deliver outstanding artistic work in their field, and are also part of the creative lifeblood of the arts in England.
Together they will form a portfolio that is dynamic and resilient, and that encourages talent to thrive.
All Arts Council’s current RFOs have been given a funding cut of 6.9% for 2011/12, to provide a degree of stability and to allow the change to be managed in the most effective way, within a clear intellectual framework. This follows on from the lessons learnt in the McIntosh Review (2008).
As a result:
- Organisations who will no longer be part of the portfolio from April 2012 will be given 12 months notice
- Decisions can be made on a consistent basis across the country, drawing on regional knowledge and a national overview
- Decisions can be made in discussion with co-funders, in particular Local Authorities, to ensure that the cumulative effect of public sector cuts is managed in the best possible way
- Key cultural assets are, as far as possible, maintained in this challenging environment
The Arts Council’s investment decisions will be governed by clear criteria, and will be taken in the policy context of its 10-year strategic framework, Achieving great art for everyone. The decision-making will be in two distinct stages.
The first stage will be an assessment of the application itself and the organisation’s ability to deliver against the Arts Council’s strategic goals. The second stage will be about balancing the overall portfolio that the Arts Council wants to support to achieve the long-term vision.
A balanced portfolio will need to have the right mix of ‘strategic’ and ‘programme organisations’ with an outstanding track record or potential of producing excellent art or outstanding potential. It will also need to embrace:
- a proper range of art forms
- organisations of different sizes and strengths, all of whom have a real engagement with audiences
- real partnership working in order to achieve maximum resilience
- work that reflects the rich and diverse cultural landscape of contemporary England
- the broadest geographical spread so that everyone has the opportunity to experience the richness of the arts
Application timetable for new funding system for National Portfolio Organisations (NPOs)
- Applications open: 4 November 2010
- Applications close: 24 January 2011
- Decisions announced: March 2011
- New NPO system goes live: April 2012