The Department for Culture, Media and Sport has announced that all grant recipients will receive a 3% funding cut this financial year as part of the government's attempt to cut the public sector spending deficit. Arts Council England will lose a further £5 million funding on top of the 3%.
Jeremy Hunt, the Culture Secretary said: "I have been clear that all parts of DCMS’s areas would need to play their part in meeting the challenge of reducing the deficit. I will be doing all I can to help our sectors through the next few difficult years, and want to do all I can to ensure that never again are our sectors as vulnerable to sudden booms and busts in public funding."
He added that more money for the arts and sport would become available through funds raised by the National Lottery.
In a press release, Dame Liz Forgan, Chair of Arts Council England said:
"We all knew this year would be tough. We do not understand why we have received a higher percentage cut than other DCMS funded bodies.
“Making cuts within the financial year is very difficult. We will now need to carefully assess what this figure of £19m means. The Arts Council has already trimmed its own budgets by £4 million in 2010/11 so this takes our total reduction this year to £23 million.
“We will do our utmost to minimise the impact on the frontline but we cannot guarantee that there will be no effect. Only £23m (5%) of our overall grant-in-aid budget goes on running costs so the vast bulk of our income goes straight to art. It would therefore be impossible to meet a cut of this size from running costs alone. Use of our historic reserves, which the Department has not allowed us to use to date, will have to be agreed with our Trustees and the Charity Commission and their use will need to be in the best interests of the arts.
“What is most important is that we do our best to protect art and artists and that we get our decisions out as quickly as possible to give our organisations a chance to plan. We have a tough Spending Review ahead so we need to work closely with our Ministers and our arts organisations to make the best possible case.”