Arts Council England sets aside money to allow National Portfolio Organisations to close their operations or adopt a new business model, amid record demand for investment.
National Portfolio Organisations (NPOs) that are unsuccessful in securing funding from Arts Council England (ACE) for the next three years will be eligible for short-term financial support while they find new forms of income or "wind down", it has been announced.
ACE has received more than 1,700 applications to 2023-26 programme, requesting a total of more than £2bn over the three-year period - more than double the existing number of 828 NPOs it funds at the moment.
Applications are being assessed with results due in October, but ACE has said it is "likely that we will be unable to fund many good applications", including those from organisations currently in the National Portfolio.
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"Given the levels of demand and our ambitions to build a more representative portfolio, it is likely that a number of current NPOs will no longer be part of the portfolio from 1 April 2023," an email providing details of the Transition Programme, sent to NPOs by Arts Council England Deputy Chief Executive Simon Mellor, said.
"In order to help them manage their exit from the portfolio... we’ve published guidance for a Transition Programme, which will be open for any current NPO (or Sector Support Organisation) who is not offered funding as part of the 2023-26 Investment Programme."
ACE said the programme is designed to "assist [NPOs] to wind down or move towards a new operating and/or funding model in a managed and orderly manner".
Limited planning time
It said a driving factor behind the new support is the fact that the decisions on the National Portfolio will be announced in October, rather than the usual date of July, affording organisations "less time to plan for their exit from the National Portfolio".
Under the scheme up to three months’ funding will be available for NPOs, or those that were funded outside the National Portfolio through Business Plan funding, that are unsuccessful in securing 2023-26 funding.
This equates to 25% of the total ACE funding they recieved as an NPO for the year ending 31 March 2023 - so an NPO that is receiving £600,000 for the current financial year would be eligible for up to £150,000 in transition support.
Funding will also be available for NPOs that receive a conditional offer of funding in October 2022, subject to details on predicted outcomes and investment plans, but are unable to reach a funding agreement with ACE.
These organisations will be eligible for six months of funding - up to 50% of the total ACE funding they are receiving as an NPO for the current financial year.
Clear need for funding
ACE has said eligible organisations must demonstrate a "clear need for funding". They may apply for costs to support moving towards or adopting a new business model, or the orderly winding down of elements of the organisation’s activity, or the entire organisation, "should the board or equivalent determine that the activity cannot continue without Arts Council investment".
Funding can also be used to cover the cost of activity during the year ending 31 March 2024 for which forward commitments have been made, such as contracts for freelancers, or planned cultural ativity.
Applicants will be required to submit a plan and budget setting out how the funding applied for would be used and what public benefit would accrue.
Organisations will not be able to apply for new creative or cultural activity, and will be ineligible for funding if they are facing insolvency.
Mellor's email sent to NPOs states: "There is no action required at this point, but we hope that for those organisations that need it, this will be a welcome mechanism to help organisations transition out of the portfolio."
The application process for transition funding will open on Tuesday 7 November 2022 and close on Tuesday 28 February 2023.