Watch this space: Arts funding cuts emerge

Frontline public funding for arts will be cut by some 15 per cent over the next four years, said the Chancellor George Osborne today, as he announced a cut of almost half in the Department of Culture, Media and Sport budget, from £1.9 billion to £1.1 billion. Arts Council England's funding will be cut by almost 30 per cent over that period, starting with a 14 per cent reduction for next year.

The bulk of the DCMS figure will be met by 41 per cent savings in the department’s administration costs, and 19 quangos will be abolished or substantially reformed, including some in film, library and heritage sectors.

However, the Chancellor said frontline arts would suffer by some 15 per cent over the next four years, less than the 25-30 per cent feared, but enough to cause a seismic shift in the arts landscape.

The biggest stories are the freezing of the BBC licence fee for six years, and the retention of free admission to museums and galleries.

The BBC will be required to accept not only a licence fee freeze but also take inside the £272 million cost of the BBC World Service, which this morning Sir John Tusa, former World Service managing director, welcomed.  Until now the service was funded by the Government via the Foreign Office. The effect overall will be a notable reduction in BBC overall plans till 2016.

Arts organisations had already been warned to start making 10 per cent cuts in advance - to come down to 15 per cent over four years is a further squeeze that could cost the existence of several organisations.

On Monday the Arts Council will meet to decide how to allocate next year's budget cuts. ACE chief executive Alan Davey said this afternoon: "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."

The ACE currently receives £449.4 million from the Government - an equivalent of around £7.50 per year per head of the British population. Davey said this budget will sink to £350m in real terms by 2014, by stages of 2011/12 £387.7m, 2012/13 £359.2m, 2013/14 £351.6m and 2014/15 £349.4m.

The subsidy goes to around 850 “regularly funded organisations”, from orchestras and galleries to agencies and special-interest arts education projects, but a new system of funding is due to come in next year which will shrink the number.

Culture Secretary Jeremy Hunt has asked ACE to protect arts frontline spending so it reduces by no more than 15 per cent over the period. Although the ACE calculates that it spends only 5 per cent of its grant on costs, accusations of waste were levelled at the Council's chief executive last week by members of the MPs’ Culture, Media and Sport Select Committee.

Davey was accused of a culture of waste - including capital buildings funded by the Lottery that did not open (a £54 million West Bromwich arts centre in an echo of the flop of the £15 million Sheffield Pop Museum - this is now a university students' union), a £100,000 redecoration of Arts Council offices, an ACE Christmas party in 2008 that cost £20,000, and an over-spend of £2.5 million on recent re-organisation, due to redundancy costs.

Davey replied that ACE would make “small percentage” cuts across the board for 2011/12, followed by a major reorganisation of Regularly Funded Organisations for 2012-15. Details of this will be revealed next March. However, he told the MPs committee that some organisations would lose all their grant.

Likely to be as significant in effect on the future shape of arts activities are the cuts of 40 per cent in higher education and 30 per cent in local authority funding. Higher education cuts and charges will affect the number of arts students and courses; council cuts will impact savagely on local arts centres and facilities.

According to the BBC, auditor KPMG predicts the spending cuts will "severely test the financial viability of some councils". Its local government head Iain Hasdell says: "In order to survive, councils will need to be ruthless in urgently deciding on frontline service priorities and ending the delivery of lower priority services."

Andrew Neil commented on BBC News that only a few years ago the DCMS was a £7 million department - now to be cut back to just a seventh of that. He remarked: "You wonder whether it's worthwhile keeping a department at all that's that small."

Quangos to go include the UK Film Council, bodies advising on Libraries and Historic Wreck Sites, and the Theatres Trust will become an independent body.

Watch this space as we add more information. Please send in information about your organisation to info@theartsdesk.com.