ACE takes the big hit

In the wake of the Spending Review, Arts Council England’s (ACE) grant in aid budget for 2011/12 to 2014/15 will be set at £1.49bn, a real terms cut of 29.6%. ACE is being required to cut its own costs by 50% and the DCMS has asked ACE to ensure that regularly funded organisations (RFOs) are not cut by more than 15% in real terms over the next four years. It accepts that “…this may mean total withdrawal of funding in some cases”.

In a letter to ACE Chair Dame Liz Forgan, Culture Secretary Jeremy Hunt has given further details of his expectations as ACE responds to the cuts. ACE’s own administration and management costs must meet a budget of £23m in 2011/12 and fall to just £12m in 2014/15: operating costs for 2009/10 totalled more than £45m. ACE will have to pay for any restructuring costs from within its new budget, which will place further pressures on the organisation. The previous restructuring, which aimed to slice £6.5m off its annual costs, ran to nearly £8m.
ACE’s ‘programme’ costs, including grants to RFOs, are also having to be reduced, but ACE has more flexibility as to how this will be achieved. In 2009/10, ACE spent £417m on arts programmes, of which £345m was allocated to RFOs. ACE’s total arts programme budget for 2011/12 has been reduced to £352m, and this must then fall by a further 8% to reach £325m by 2014/15. The DCMS has acknowledged that some of ACE’s own programmes will be among the casualties of the cuts, including spending on supporting artists from minority groups. It has made a commitment to publish formal equality impact assessments for new areas of policy as they emerge.
A range of other stipulations have been made by the Government to secure and build on specific areas. A top-slice of £225k a year will be earmarked for the Taking Part survey, which generates ongoing evidence of public engagement in the arts. ACE is also being required to give support to strengthen private investment in the arts, including “match-funding programmes [that] would boost private sector support and investment in culture”. The Cultural Leadership Programme is specifically mentioned as needing to evolve into a broader “organisational development resource for culture and the creative industries” which needs to “deliver better value for money and have more impact” in the arts sector and beyond, with a specific focus on developing fundraising capacity. ACE is also expected to play a leading role in implementing the outcomes of the review of music and cultural education which is already underway, to continue the Cultural Olympiad programme, and to support international cultural exchange, prioritising work with China, India, Brazil, the Gulf States, Russia and Japan.