Spotlight on empty stage at theatre with red seats

Table of contents

On 15 December 2022, the House of Lords is due to consider a debate moved by Lord McNally (Liberal Democrat) on the regional distribution of Arts Council England funding and its impact on regions outside of London.

1. Improving access to arts and culture beyond London

The government has said it wants to improve access to culture and arts across England. In February 2022, the government set out its plans as part of its levelling up agenda. This included a commitment in the levelling up white paper to “significantly” raise cultural spending outside of London. The aim, the government said, was to generate more regional jobs in arts and culture and improve access to cultural activities across England.

Arts Council England (ACE)—an arm’s length body of the Department of Digital, Culture, Media and Sport (DCMS)—is the national development agency in England for creativity and culture. It invests money from the government and the national lottery in arts and culture organisations across England. ACE has recently acknowledged that its investment in certain parts of England has historically been too low and has committed to a fairer distribution of funding.

To achieve the government’s aim of improving access to culture and arts across England, the DCMS said cultural investment by the government through ACE to places outside London would rise to almost £250mn by 2025. This increase and redistribution of investment across England would see some arts and culture organisations become ‘national portfolio organisations’ (NPOs) for the first time. NPOs are organisations chosen by ACE as part of its funding portfolios that receive guaranteed funding over a specified time frame.

To support its levelling up aims for arts and culture, the government asked ACE to do several things. This included requiring ACE to help London-based culture organisations expand or move out of the capital. Additionally, the government asked ACE to ensure its funds were more evenly distributed across London boroughs.

2. Arts Council England’s latest funding announcement

ACE announced its 2023–26 investment portfolio in November 2022. This set out which museums, libraries and arts organisations across England would become part of ACE’s new national portfolio of funded organisations from April 2023 until March 2026.

More than 1,700 organisations applied to become part of the 2023–26 portfolio. Of these, 990 were successful and set to receive a share of £446mn over three years. This includes 276 organisations joining ACE’s portfolio for the first time. Of the 990 organisations, 950 have been awarded NPO status. The remaining 40 organisations have been designated ‘investment principles support organisations’ (IPSOs). IPSOs are required to provide creative and cultural activity that delivers against ACE’s investment principles, set out in its strategy for 2020–30: ‘Let’s Create’.

The 2023–26 portfolio will replace ACE’s 2018–22 portfolio, which ends on 31 March 2023. The 2018–22 portfolio was originally due to end on 31 March 2022, however ACE granted a one-year extension for 2022/23 as part of its response to the Covid-19 pandemic.

2.1 Regional spread of 2023–26 funding

According to its 2023–26 portfolio factsheet, ACE said it would provide 21.8% more investment outside of London in 2023/24 when compared to 2018/19. London has been awarded the largest amount of funding over the 2023–26 period and is set to receive around £152mn each year (one third of ACE’s total 2023–26 investment). Additionally, it said 78 levelling up for culture places (LUCPs) were set to receive an annual share of £43.5mn from 2023 until 2026. LUCPs are areas identified by ACE and the DCMS as places of historically low cultural engagement and spending. There are currently 109 areas designated as LUCPs—all outside of Greater London—that are the focus of additional ACE engagement and funding. Across these 78 LUCP areas, there are 89 newly funded organisations that will join the portfolio for the first time.

ACE’s dataset categorises the 2023–26 investment portfolio into five geographical regions. The total annual investment for each region for 2023–26 is shown in chart 1:Arts Council England funding 2023-26 by ACE area

Chart 1: Arts Council England 2023–26 total annual funding by region (£)

These 2023–26 regional investment totals (chart 1) when compared to the investment totals in the 2018–22 portfolio and the 2022–23 extension year are shown in table 1:

Table 1: Arts Council England total annual investment per region since 2018 (not adjusted for inflation)
Region 2018–22 (£mn) 2022–23 extension year (£mn) 2023–26 (£mn)
London 144 147 152
North 99 101 128
Midlands 67 68 84
South-east 35 36 46
South-west 25 26 37
Total* 369.2 377.5 446.3

*Please note, the totals may not sum due to rounding. Additionally, the 2018–22 and 2022–23 extension year figures are averaged totals and do not include investment received by organisations that have left the portfolio. Figures for the 2018–22 investment and 2022–23 extension can be found on ACE’s website.

2.2 Supporting organisations to move out of London

Of the 990 organisations awarded funding for 2023–26, 24 organisations (18 NPOs and six IPSOs) plan to relocate away from London as part of ACE’s transfer programme. Whilst applying for 2023–26 funding, London-based organisations were asked to confirm whether they wished to ‘opt in’ to the transfer programme. A total of 24 organisations opted-in and are referred to as ‘transfer organisations’.

The transfer programme runs in parallel to the 2023–26 portfolio. Whilst both programmes share the same aims, the transfer programme provides two years business funding to London-based organisations that are willing to establish a main office outside of London by 31 October 2024. ACE has set the overall budget for the transfer programme at £8mn per year: a total of £16mn over the two-year programme period from April 2023 to March 2025. The aim is for transfer organisations to use the funding period to consider their options for relocation and move if they wish.

ACE said that any organisation that has established a main office outside of London by the deadline would be eligible to apply for ring-fenced investment programme funding for 2025/26. Applications would be made through a separate programme scheduled to launch in autumn 2024.

As of 4 November 2022, the 24 transfer organisations remained in discussion with ACE about relocation. Transfer organisations include Orchestras for All, Paraiso School of Samba and Libraries Connected.

3. Reaction to 2023–26 funding

3.1 Arts and culture sector

ACE’s latest funding allocations received a mixed reaction from the arts and culture sector. Some successful organisations expressed relief, whilst other organisations (both successful and unsuccessful) raised concerns about either a reduction of overall funding or the removal of funding all together.

Brass Bands England—an organisation based in Barnsley that works to encourage, support and promote brass bands across England—spoke positively of its increased funding award and IPSO status. Chief Executive Officer Kenny Crookston said the investment would mean the organisation could deliver its full programme of opportunities and operate at full capacity for at least three years.

Some organisations receiving national portfolio status for the first time also spoke positively of their 2023–26 funding award. This included the Leeds-based children’s reading charity BookTrust, which has been awarded NPO status. The charity said the funding would allow it to “continue to bring […] the transformative benefits of reading to children across the UK, with a new focus on families most in need of support”. Another organisation new to the portfolio, Unlimited, a Yorkshire-based, disabled-led arts charity, said the funding would allow it to work towards its vision of “commission[ing] extraordinary work from disabled artists until the rest of the [arts] sector does”.

However, concerns have been raised by organisations whose funding has either been reduced or removed completely. In total, over 700 applicant organisations did not receive NPO or IPSO status and funding. This included the Hereford-based 2Faced Dance Company who had received ACE funding for the previous 10 years.

In London, several organisations which have had their ACE funding removed completely have raised concerns. For instance, the artistic director of Hampstead Theatre, Roxana Silbert, quit her role because of financial constraints that have been attributed to ACE’s decision not to renew the theatre’s annual funding. One of the biggest controversies was the removal of English National Opera’s (ENO) NPO status, meaning that ENO will not have guaranteed funding over the course of the 2023–26 programme. Instead, ACE said it had offered ENO a total of £17mn to support its remodelling and relocation outside of London. This is part of ACE’s transition programme that aims to support 2022/23 NPOs that were unsuccessful in their 2023–26 application to either wind down or move towards a new operating or funding model. The ENO has launched a petition to reinstate its ACE funding.

The organisation set to receive the largest amount of ACE funding during 2023–26 is the Royal Opera House. It was awarded around £22mn of annual funding over the three-year portfolio period. However, this is a reduction in funding when compared to the 2018–22 portfolio and represents a “real terms cut of around £4.7mn (19%) to […] core funding”, according to a Royal Opera House statement.

3.2 Parliamentary commentary

ACE’s funding allocations and its impact on leading cultural institutions such as the ENO has recently been considered in Parliament.

In response to the government’s answer to her question in the House of Commons on 1 December 2022 about ACE’s funding decisions, Sarah Green (Liberal Democrat MP for Chesham and Amersham) said how some ENO professionals had felt “blindsided” by ACE’s recent funding decision, with some now at risk of losing work if an ENO relocation took place. Julian Knight, the chair of the House of Commons Digital, Culture, Media and Sport Committee, said that ACE funding had been “too London-centric” for too long. However, in correcting this imbalance, he raised the question of whether ACE should be required to ensure that established institutions had protections in place to cope with the reduction or removal of funding. The shadow DCMS minister Barbara Keeley said she supported a fairer distribution of arts funding across England, but noted that levelling up “should not be about pitting arts organisations against one another”.

On behalf of the government, the parliamentary under secretary of state for DCMS, Stuart Andrew, said he supported ACE’s funding decisions to regions outside of London. He also noted that London was still receiving the largest share of ACE funding. On the ENO specifically, the minister said ACE remained committed to supporting core cultural institutions and had awarded transition funding to the ENO to support a relocation.

The House of Commons also held an adjournment debate on ‘Performing arts: English National Opera’ on 5 December 2022. Moving the debate, Sir Robert Neill (Conservative MP for Bromley and Chislehurst) described ACE’s decision to remove the ENO from its portfolio as “disgraceful”. Sir Robert spoke of the risk of redundancies to ENO’s chorus, orchestra and creative staff if it relocated outside London. He warned: “They cannot move out of London, because they have families, so they will be made redundant and the chorus and the orchestra will be destroyed”.

About levelling up, Nickie Aiken (Conservative MP for Cities of London and Westminster) said it was important for leading institutions such as the Royal Shakespeare Company to maintain a London flagship alongside a regional base. Sir Robert agreed, stating that it “should not be an either/or”. Harriet Harman (Labour MP for Camberwell and Peckham) said that ACE’s withdrawal decision for ENO should be reviewed, reshaped and “should not go ahead”. Other MPs outside of London from across several parties also agreed that ACE’s decision on ENO should be reversed.

In response, culture minister Stuart Andrew said he was unapologetic about the shift to support more organisations across England. He referred to places such as Blackburn which had previously received no ACE funding but now had four funded projects for 2023–26. On the ENO specifically, he acknowledged that some MPs would disagree with ACE’s decision, but noted that ENO had received other support from ACE. Overall, the minister said the government’s focus was on spreading opportunities for artists around England, whilst also remaining committed to London as a “leading cultural centre”.

3.3 House of Commons Digital, Culture, Media and Sport Committee report

On 2 November 2022—two days before ACE released its 2023–26 portfolio funding allocations—the House of Commons Digital, Culture, Media and Sport Committee published a report with recommendations to the DCMS on how the government should address geographical funding imbalances across arts and culture to fulfil its levelling up agenda.

The committee raised concerns that areas beyond London and the south-east were not receiving the necessary investment to support their own arts and culture organisations. It noted that grassroots organisations in deprived areas of London and the south-east were also experiencing “serious financial risk”. The committee said this was due to a minority of national cultural organisations receiving significant proportions of public funding.

To address these issues, the committee said the government and ACE should reconsider how they allocate funding by regions. It recommended a new funding model: one that would have the national cultural institutions which receive the largest levels of investment allocated their funding separately from local and regional institutions. The committee said this would:

[…] allow for better comparisons between genuinely grassroots organisations and ensure those organisations in regions where there is a high concentration of national cultural institutions are [not] indirectly negatively impacted by well-meaning attempts to rebalance spending across the country.

The government has two months to respond to the committee’s report. At the time of writing, its response has not been published. Further detail on the committee’s recommendations can be found in the Lords Library’s article, ‘Arts and creative industries: The case for a strategy’.

Following the 2023–26 announcement, the committee said it would investigate ACE’s 2023–26 funding decisions. It has called on ACE to provide context to its recent funding allocations and discuss its future strategy. Darren Henley, the chief executive of ACE, is due to attend a committee evidence session on 8 December 2022. Some organisations announced that they welcomed the committee’s investigation. This included the ENO.

4. Other Arts Council England funding programmes

ACE has launched several other development programmes in recent years that aimed to support local arts and culture across England’s regions. This includes:

  • Creative Local Growth Fund: This is a place-based programme that works across local enterprise partnerships, arts organisations and other partners to support initiatives designed to help culture contribute to local economic growth. Successful applicants to the latest funding round will be notified in March 2023.
  • Cultural Development Fund: This place-based fund provides local enterprise partnerships and others with investment for “transformative place-based creative and cultural initiatives”. The fund’s purpose is to “unlock local growth and productivity, promote economic and social recovery from Covid-19, and regenerate communities”. ACE delivers this programme on behalf of the government. Successful applicants to the latest funding round are due to be announced in March 2023.
  • Great Place Scheme: Launched in August 2016 in collaboration with the National Heritage Lottery Fund, this programme awarded funding to 16 projects from a range of rural, urban and seaside areas. ACE said it aimed to ensure that local investment in arts and culture could make the biggest impact on the economy, jobs, education, community cohesion, and health and wellbeing in those areas. All Great Place Scheme projects were completed on various dates between May 2019 and September 2021.
  • Cultural Destinations Programme: Delivered by ACE and Visit England (from national lottery funding) between April 2017 and January 2021, this programme invested in local projects across England to encourage collaboration between the culture and tourism sectors.

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Cover image by Marc Fanelli-Isla on Unsplash.