The Stage

ACE warns funded organisations to plan for 10% cuts in 2011

Published Tuesday 13 July 2010 at 10:25 by Alistair Smith

Arts Council England chief executive Alan Davey has written to all regularly funded organisations telling them to prepare for at least a 10% reduction in their subsidy next year.

The warning comes soon after ACE was itself told by the Department for Culture, Media and Sport to model for cuts of either 25% or 30% to its funding over the next four years. ACE has said that the bulk of these cuts will not be handed over to RFOs immediately, but they should still expect a minimum cut of 10% to their 2011/12 grants.

In the letter, Davey explains: “In June, along with all DCMS funded bodies, we received a letter from [culture secretary] Jeremy Hunt asking us to model reductions of 25- 30% over four years to our funding programme. This shows just how tough this spending review will be, but these figures are not set in stone. The arts council is arguing to minimise the cuts ‚Äì and we will argue that any cut needs to be managed intelligently, and in a way that protects the achievements of the last 15 years. In particular we need to be sure that whatever cuts we do get do not all take place in the first year of a four-year cycle. This would be doubly damaging.”

He added: “Given the economic climate, and the fact we have been asked to model a reduction of up to 30% over four years, we are now asking you to model prudently for a minimum of a 10% reduction in your funding for 11/12. This figure is not final, but we suggest it is a reasonable figure for you to address at this point.”

Meanwhile, Davey also said that ACE would be looking to make its funding decisions in two waves - the first would address the 2011/12 grant and the second would cover from 2012/13 to 2014/15. It is this second batch of decisions that is expected to include the most painful funding decisions.

Davey explained: “There is much detail still to be decided, but we need to be clear that cuts of up to 30% would mean significant change. We would no longer be able to fund many organisations in the way we have been to date.

“We want to give organisations at least 12 months’ notice of significant changes to their funding future so we will run the next funding process in two stages: investment decisions for 2011/12 (year one) will be separated from years 12/13-14/15.”

The cuts will be in addition to the 0.5% cuts to RFOs 2010/11 budgets which were announced last month. If ACE is hit with a 30% cut, this would equate to around £135 million lost from its budget every year.

For more see this week’s print edition of The Stage.