Cuts: 100+ Arts Orgs Lose ACE Funding by 2015

As part of the new system and so-called Achieving Great Art for Everyone strategic framework – designed after a lengthy industry consultation and reacting to the more immediate demands of last month’s Comprehensive Spending Review, in which ACE’s budget was slashed by 29.6%, from an annual grant of £449 million to £349 million by 2014 – no “National Portfolio Organisation” (the term which will replace RFO) will see more than a 14.9% reduction in their subsidy; indeed, some may receive increases.

However, the slimmed-down portfolio will mean that more than 100 current RFOs will lose funding completely, in order to make way for new applicants and to bring the overall total down.

Speaking at a press conference at ACE’s Westminster-based offices today, ACE chair Dame Liz Forgan, “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.”

ACE chief executive Alan Davey added that the more targeted funding approach was a conscious effort to avoid the mistakes of the 1980s when subsidies became “too thin, audiences voted with their feet and a lot of organisations got into trouble”. “We don’t want to enter that downward spiral again,” said Davey, nor face the future costs of putting the situation right, as happened in the 1990s.

Four key changes

From today, the “open application” process has gone live on the ACE website. Each application will be assessed in two stages: first, according to its ability to meet and deliver on at least two of ACE’s five newly outlined goals (talent and artistic excellence; inspiring more people to experience the arts; demonstrating sustainability, resilience and innovation; a diverse and highly skilled leadership and workforce; and granting access to children and young people); second, in terms of keeping a “balanced portfolio” overall in terms of art forms, genres, project sizes and geographical spread.

Such open applications are a move away from the continuous funding system which has led to a fairly static group of organisations receiving regular funding, with some arrangements virtually unchanged over the six decades of the Arts Council’s existence – a situation which has led to the perception of funding being a “closed shop”.

The three other key changes away from “box ticking” and the existing RFO system are: fixed funding terms, normally of three years, but with scope to vary to as little as two years or a maximum of six; tailor-made funding agreements with individual organisations; and two tiers of relationships, “strategic” or “programme”, with NPOs.

The small proportion of “strategic” relationship organisations – identified as leading “citizens” of the arts world which from the “backbone of the arts” in England – will be expected to take on extra responsibilities, such as talent-spotting, collective fund-raising and sharing of backoffice resources with smaller organisations. It’s a model similar to that already proposed by the Royal Court as a means of sharing resources between the National and London’s other main subsidised houses.

Though neither Davey nor Forgan would comment on any possible individual funding decisions, they did say there will be much less emphasis in future on capital projects. “The age of enormous building enterprises in the arts is over,” said Forgan. “It was very much needed and huge benefits flowed from it” at the time, but “now that estate has to be maintained”.

Dates & transitions

Current RFOs have already been guaranteed their funding for the 2011/12 financial year, with the across-the-board cut of 6.9% announced last week. Applications to become NPOs from 2012 on will close on 24 January 2011, with funding decisions announced in March 2011 ahead of going live in April 2012. Organisations who will not become part of the new portfolio will therefore be given 12 months’ notice to arrange alternative funding.

Council cutbacks

As part of its Department of Culture, Media and Sport (DCMS) settlement, ACE was also ordered to cut its own administration costs by a whopping 50% – which comes on the heels of a major operating restructure over the past 18 months that has already seen the organisation shave £6.5 million from its operating costs and lose 21% of its staff (131 jobs).

Speaking to journalists today, Davey explained that the 50% cut will come in the last year of the current four-year settlement, giving them “two fairly clear years” to get the current job done. There’s also an “ongoing discussion” about the implications of the 50% and, more particularly the definition of “administration”. DCMS, as opposed to other government departments, has taken the harshest definition – demanding that ACE halve its total operating costs, from £22.2 million to £11.1 million.

If that definition holds, there is, said Forgan, real “concern” whether “we are going to be able to fulfil our statutory responsibilities” on such drastically reduced resources. The “narrative is unfolding” as ACE seeks to make the powers-that-be understand that ACE acts not only to hand out grants but also as a true “development agency for the arts”, serving as “active enablers, entrepreneurs and impresarios” within and for the benefit of the sector overall.

Both Forgan and Davey stressed, however, that come what may, the choice will never be “between cutting our costs or cutting funds to arts organisations”; the latter, they said, would always be the priority.

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