A £2.1m fall in the national funder’s annual NPO contingency budget means its ability to respond to requests for financial intervention will be reduced.

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A budget shortfall is forcing Arts Council England (ACE) to cut back on the financial support it provides to arts organisations in emergencies.

The national funder budgeted a contingency of £5.5m per annum throughout the 2015-18 funding round, but has decreased this to £3.4m per annum for the 2018-22 period. An ACE spokesperson told AP its ability to respond to requests for financial intervention “will inevitably be reduced” as a result.

Interventions are available to National Portfolio Organisations (NPOs) facing challenges that put them at risk of closure, including damage to buildings, unexpected reductions in earned income and additional staffing costs.

Revealing the new position during a meeting of the South East Area Council last December, senior ACE officials stressed the importance of robust business plans for NPOs and re-iterated access to the portfolio was conditional on submitting such a plan.

The move is a direct result of the collapse in Lottery funding, which forced ACE to cut its proposed strategic budget for 2018-22 by £39m per year.

Programme contingency

The national funder spent an average of £1.5m a year throughout the 2015-18 funding round on financial interventions for NPOs, around a quarter of the programme contingency.

An ACE spokesperson said the funder does not budget for financial interventions and instead makes decisions on a case-by-case basis. But if the current ratio holds, arts organisations would have access to just over £900k on average per year for such interventions – around £600k less per annum than during the previous funding round.

“We will continue to consider and respond to requests on a case by case basis, and will seek to work with organisations to support them in finding ways to achieve stability,” the spokesperson added.