Cuts: DCMS £1.1bn Leads to Arts Council Slash

Chancellor George Osborne stated that 41% savings will be made in the department’s administration costs, including the abolition or substantial reform of a total of 19 of DCMS’s 55 existing quangos (quasi non-governmental organisations), including the UK Film Council and the Theatres Trust (which will continue as an independent charity). The end result to “frontline” arts organisations would, he said, be limited to 15% cuts over the next four years.

While theatre specifically was not mentioned in his statement, Osborne did commit to completing capital building projects for the Tate Gallery and the British Museum and to continuing the policy of free entry to the country’s museums and galleries.

Apart from DCMS losses, nationwide the arts may also come to feel the knock-on effects of the Chancellor’s announced 7% budget reduction to local governments, which often contribute to the costs of arts projects in their regions.

The Chancellor said that, across all departments, his decisions had been based on three principles: reform (cutting out all waste), fairness (we are all in this together) and growth (prioritising areas most likely to support future economic growth). “To back down and abandon our plans would be the road to economic ruin,” Osborne warned. Instead, we must collectively follow “a hard road but it leads to a better future”. Today, he said, “is the day when Britain steps back from the brink” and confronts the bills and other consequences of “a decade of debt”.

Arts Council receives nearly 30% cut

Following the Chancellor’s statement, DCMS has, in turn, confirmed that its settlement to Arts Council England (ACE) has been cut by 29.6% – ACE had been preparing for scenarios of either a 25% or 30% cut. ACE distributes government money to its 850 arts RFOs (regularly funded organisations), amongst them more than 200 subsidised theatres and theatre companies. For 2010/11, ACE received a grant in aid of £449.5 million, which would have risen to £480 million for the next year with the usual inflationary increase. As a result of today’s settlement, that will go down, in real terms, to £350 million.

In a letter to its RFOs, Arts Council chief executive Alan Davey said: “These cuts will inevitably have a significant impact on the cultural life of the country.”

The cuts will be progressively increased year-on-year for the four years the CSR covers, as follows:

• For 2011/12 – down to £387.7 million
• For 2012/13 – £359.2 million
• For 2013/14 – £351.6 million
• For 2014/15 – £349.4 million

Davey continued: “The Secretary of State has indicated in his settlement letter that he would like to keep the overall effect on the budget to regularly funded organisations to 15% over four years. This is a reflection of the number we indicated to the Chancellor as a tipping point for the arts.”

The rest of the ACE’s savings will need to be found through further cuts to “resource and capital”. This will necessitate a whopping 50% reduction in operating costs – 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). Grants to bodies that don’t qualify as regularly funded organisations, including various development programmes and potentially activities surrounding the 2012 Cultural Olympiad, are also under threat.

ACE’s National Council will meet next Monday (25 October 2010) to “consider the overall position”, including how its reduced funds will now be allocated across its RFOs. Davey said “it is still our intention to try and limit any cut in the first year to less than 10%” in order to allow companies time to find alternative sources of funding. It’s expected that, in future, all RFOs will be required to reapply to maintain their status.

In a press statement, David added: “We will now be analysing the details of the settlement and the consequences for the arts in this country as a whole. We will announce how we will be implementing the cuts shortly after, and will then get on with the job in hand. It will be a tough task, but we are determined to manage the cuts in the best possible way for the benefit of the whole arts and cultural sector.”

More number crunching

The CSR is a complete reassessment of the Government’s spending and a reallocation of resources for the next four years from 2011-2015. At the last CSR, the Arts Council received an inflationary increase. Had its settlement increased in line with inflation (at 2.5%), they would have received £495 million in year four of this period (2014/15).

Over the four years, in real terms ACE will lose a total of £457.4 million (equal to £71.3 million in year one, £110.4 million in year two, £130.2 million in year three, £145.4 million in year four). Stay with us now… At current prices, 2014/15’s £350 million settlement is actually more like £309 million – which is £2 million less than ACE received in the 2000/01 funding year. Effectively then, today’s announcement wind the clock back 13 years in terms of arts funding.

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