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Arts Council England has failed to adhere to its own policy giving step by step guidance as to how it should treat RFOs facing possible disinvestment. Sean Egan believes this gives many organisations good grounds on which to challenge ACE?s decision to cut their funding.

Amidst the furore over ACE funding decisions, voiced at the Equity open meeting last Wednesday, a number of organisations who are down for cuts voiced specific concerns about the way in which the whole process has been handled. I am advising numerous companies facing funding cuts and each has an alarming tale to tell. The common factor is that not one considers that it was given advance notice that their continued funding at approximately the same level was seriously in doubt.

If you are a company whose funding is under threat I would urge you to read the Arts Council document "procedural guidance - disinvestment from regularly funded organisations". This was on the ACE website until two weeks ago and was only reinstated last Wednesday. The reasons given by ACE for its removal do not stand up and some may suspect it was reinstated only as its existence had become too well known. This document sets out detailed step by step guidance as to how ACE will treat possible disinvestment in RFOs.

The document itself sets out what can be seen as a reasonable and transparent basis for decision making, but from all the cases I have seen it has not been adhered to in important respects. ACE commits to providing full reasons and copies of all documentation supporting the proposed decision. This is to enable organisations to have all the requisite information on which a proposed decision is to be based so that any response can be based on the facts. From what I have seen no RFO has received the required documentation and in many cases the reasoning for the cut is not properly explained. Organisations as a result have been seeking to rely on Freedom of Information Act requests rather than receiving the information that they should have received under ACE's own guidelines. In addition ACE states that where there is a proposal to disinvest and there is less than six months to run of the funding agreement "an additional period can be offered to allow the organisation to manage the process". To my knowledge the vast majority of cuts made are effective on 1st April and transitional funding has not been proposed.

Any organisation proposing to challenge the intended funding cut should have an improved case by demonstrating that ACE is in breach of its own guidelines.

I write from the legal perspective but quite how a publicly funded body can seek to justify 190 funding decisions which contravene its own procedural guidelines I just don't know.

Find ACE's funding policy here: http://www.artscouncil.org.uk/funding/regularfunding.php

Sean Egan is head of Theatre and Arts at Bates, Wells and Braithwaite solicitors, for further information see www.bwbllp.com. To receive regular email updates in charity law, arts law, employment and property law, email Mona Rahman at m.rahman@bwbllp.com