On the day that Birmingham City Council have slashed financial support for the arts, passing an 18% reduction in funding on to Birmingham Repertory Theatre Company, the organisation's artistic director Rachel Kavanaugh has announced she will step aside early next year to pursue a freelance directing career. The move also comes ahead of The Rep leaving their Centenary Square home, spending two years presenting work off-site, before taking up residence in the new Library of Birmingham joint development come 2013.

Kavanaugh, who has been the creative leader of the theatre since 2006 and has played a significant part in the plan to integrate The Rep with the new Library of Birmingham, has directed a broad range of work during her tenure including Philip Pullman’s His Dark Materials, The Wizard Of Oz and David Edgar’s Arthur & George. Her recent directing projects outside The Rep include Love Story, which transferred to the West End's Duchess Theatre following a sold-out run at Chichester Festival Theatre.

Speaking about her departure, Kavanaugh said in a press statement: "As The Rep is soon to enter an exciting phase of development, with a fully refurbished theatre and a new studio space built by 2013 it feels like the right moment to hand over to a new artistic director who can build on our current successes, look to the future with a real sense of optimism and excitement and lead the company into a new era."

Birmingham City Council today (14 December 2010) announced plans to reduce its local arts funding by £2 million a year over the next three years with companies including Birmingham Royal Ballet and The Drum losing between 9% and 23% of their support. Arts companies including Stan’s Cafe, Birmingham Contemporary Music Group and Big Brum have been told they will lose all of their funding. Birmingham Rep’s grant will be reduced from £1.103 million to £908,000 from next year.

The local government funding cuts come shortly after the Coalition Governement's settlement for local councils was released on Monday, with funding reduced by 12%. Arts Council England have also imposed 6.9% blanket cuts to all Regularly Funded Organisations, prior to an overhaul of its funding structures which it has warned will see over 100 organisastions lose their ACE funding.

Kavanaugh's final production will be Notes to Future Self, a new play by Lucy Caldwell commissioned by The Rep which the company will be producing at Midlands Arts Centre (MAC) in March 2011. MAC has also been told its grant from Birmingham City Council will be reduced from £756,000 to £650,000 next year.