ACE unveils “biggest transformation of arts funding for a generation”

Published Thursday 4 November 2010 at 12:00 by Alistair Smith

Arts Council England has today unveiled the ten-year strategy that will inform a complete overhaul of the organisations it funds in early 2011, leading to as many as 100 companies being cut.

ACE chair Liz Forgan described the changes as “the biggest transformation of arts funding for a generation”. Meanwhile, ACE chief executive Alan Davey said that the new process would be “unbureaucratic” and would move away from criticisms of the old system, which he said some had viewed as “mysterious” and a “closed shop”, continually funding the same companies.

The new system will abolish the single stream of regular funding for organisations, replacing it with new “National Portfolio Organisations”.

There will now be an open application process and all companies that receive core support from the arts council – or new companies wishing to receive core support – will have to apply from scratch for funding under a revamped, “more flexible” system. ACE will then allocate organisations into one of two different types of subsidy.

The first stream – “strategic funding” – will be subsidy for organisations that ACE regards as being strategically important to the sector at large.

It is expected that this will feature major institutions such as the National Theatre, although ACE has not ruled out smaller companies also being awarded “strategic” status. These companies will be required to take on greater responsibility for the wider sector and will be expected to embrace initiatives such as the NT’s recent offer to share its back room facilities with other theatres in London.

The second stream of funding – “programme funding” – will come with less responsibility attached and will focus on an organisation’s own artistic output. It is in this category that the majority of funded organisations will fall.

Under both streams, companies will be able to apply for funding periods lasting as long as six years, or as short as two, although most companies will still receive three-year settlements.

Money for both streams will come from ACE’s Grant in Aid funding – the money it receives from government to regularly fund arts organisations.

ACE’s existing Grants for the Arts funding stream, which offers smaller grants from Lottery funding, will continue.

However, it is understood that the new system has been designed so that Lottery money could be diverted to them in future.

Applications open today, November 4, and will close on January 24, 2011. Decisions on the 2012/13 and 2014/5 funding levels will then be made by March 2011. Over this period, the overall funding pot will be reduced by 14.9% in real terms.

According to ACE chair Liz Forgan, the decisions made in March 2011 will mean “some organisations will cease to exist – or at least cease to have their funding from us. Others will have their funding cut, and some will have their funding increased”.

ACE has said that the new portfolio will be smaller than the current one, with “the potential loss of more than 100 organisations by 2015”. According to ACE “this is preferable to maintaining a large portfolio that will be progressively debilitated by cuts over the course of the [funding] settlement”.

The new funding system was announced as ACE unveiled its new ten-year strategy, Achieving Great Art for Everyone. The strategy has been formulated following a consultation process that began in 2009. More than 2,500 people took part in the consultation, with many calling for more flexible funding streams and an increased focus on excellence.

Forgan commented: “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 application system is available online at