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Funding increases of at least 2.75% and above for the majority of Arts Council England?s regularly funded clients in the three-year period to March 2008.

A funding strategy that will ?ensure a degree of budgetary stability for arts organisations? has been announced by Arts Council England (ACE) for the next three years, with 60% of regularly funded organisations (RFOs) receiving inflation only increases of 2.75% in 2006/07 and 2007/08. However, larger pay-outs will go to a further 20% of ACE clients, including those that have recently had major capital investment. Thirty-four new organisations will be given regular funding for the first time, but 54 will see their funding reduced or pegged, and a further 121 will lose their RFO status altogether. The minimum value of RFO agreements has been raised to £20,000, and some organisations that have hitherto received less than this will now have to apply for project funding instead.

Big winners in the latest budget round include Opera North, which will see an increase of 5.5%, worth £450,000 in 2006/07, to support its forthcoming move into a new opera centre within the Leeds Grand theatre development. The Baltic in Gateshead will get a further £1m a year by 2007/08 and The Lowry in Salford will see an increase from £75,000 to £1.1m, to help cover core costs. Among the losers are Arts & Business, where a £6m annual grant has been frozen, and the diversity and inclusion agency Momentum Arts, which will see cuts of £100,000 a year by 2007/08. Managing Director John Wroe said, ?...many of our projects are already receiving national recognition and we are confident these will attract new funding in the next few years. We will continue to work with ACE to lobby for the work of inclusion and diversity within the arts sector.? Youth music venue Roadmender, which has received almost £2m of Lottery funding since 1998, has lost its £111,000 funding and rural touring company, The Common Players is losing £88,000, a figure which rose from £20,000 as part of the 2003 Theatre Review.

Because ACE?s grant-in-aid from Government has been fixed at £412m, significant savings will have to be made to fund the planned increases. By far the largest single cash cut will fall to the Creative Partnerships (CP) programme for young people, for which an annual budget of £45m a year will drop to £32m in 2005/06 and £35m in 2006/07. The CP programme, which has yet to roll out across all the planned regions, will be extended more slowly than originally intended, and the projects within the schools involved in each area will be more contained. The £2.5m a year contributed by the Department for Education and Skills and ring-fenced to enable the learning and practice from CP to be spread more widely across the education sector, will not be affected by the cuts. In a further cost-cutting move, ACE has also pledged a three-year freeze on its own administration costs, which were £42.3m in 2003/04. A partial freeze on recruitment may contribute to the savings, though there are no plans to freeze staff salaries. Figures recently disclosed in response to a Parliamentary Question reveal that staff costs averaged £34,800 in 2003/04.

Commenting on the new budget, Chairman Sir Christopher Frayling described ACE as having had to make some ?hard choices in a tough financial climate?. He said, ??stability is fragile and cannot be sustained beyond 2008? If there is not a better settlement in the 2006 Spending Review it will mean real cuts to more arts organisations. We must work together with our partners in the arts and in government to make the case for the arts as strongly and effectively as we can.?