ACE yet to recoup £1.3m of withdrawn Covid-era grants

Arts Council England (ACE) is yet to recover £1.3m provided to arts and culture organisations through Culture Recovery Fund grants that were subsequently withdrawn, Arts Professional has learned.

The funding body has confirmed that 31 grants were revoked for a variety of reasons, including breaches of ACE’s terms and conditions, organisations winding down and organisations declining funding due to changes in circumstances.

The original awards totalled £3.78m, with £1.65m of that paid out and just over £2m declined by recipients.

To date, ACE has recovered nearly £229,000 and has live processes underway concerning the remaining £1.34m.

The outstanding figure includes a £400,000 grant awarded to the now liquidated Primary Event Solutions (PES) that was reneged last month following concerns raised about the extent to which the organisation – called Primary Security until October 2020 – operated within the culture sector before applying to the government support scheme during the pandemic.

ACE said its investigation into PES, which was co-founded by former Greater Manchester night-time economy advisor Sacha Lord, found the company breached a clause relating to wrong or misleading information being supplied on the grant application “either by mistake or because you were trying to mislead”.

However, ACE has previously told Arts Professional: “We are not required by this clause to determine whether the misleading information was supplied deliberately.”

Reasons for withdrawal

Of the 31 withdrawals, only the grant to PES is recorded as breaching that particular clause.

The majority of the grants, 13, were revoked due to a failure to comply with reporting conditions, two of which were also in breach of a clause that required applicants to provide, when requested, clear and accurate accounts that cover the period of their plan, which may include proof of expenditure or losses.

Meanwhile, 12 of the grants were declined or not claimed, and two were withdrawn due to the organisation closing. There was also one instance of an organisation becoming insolvent following the award of a grant.

Most withdrawals, 11, occurred in 2021/2022, followed by nine in 2022/2023 and eight in the last year.

A £1.6bn support package

Announced by the Department for Culture, Media and Sport in July 2020, the Culture Recovery Fund (CRF) was a £1.6bn support package designed to help the cultural sector survive the economic impact of the pandemic and, when possible, reopen.

The scheme offered three rounds of funding, administered by ACE, with final grant offers in March 2022. In total, 7,185 unique organisations applied for grants from CRF – excluding capital applicants subject to stricter eligibility rules – with 4,473 (62.3%) successfully receiving funding.

ACE said that across the whole CRF programme, it made more than 6,000 separate funding awards of between £50,000 and £3m.

As of 31 January, Arts Council England has received 357 third-party objections and 88 allegations of fraud across the whole CRF programme. There has been one confirmed fraud, and two cases continue to be investigated.

ACE confirmed that the Primary Event Solutions case is no longer being investigated.

Burnham calls for Lord to be ‘applauded’

Since the now liquidated PES had its grant withdrawn, Manchester Metro Mayor Andy Burnham has criticised ACE for its “narrow” investigation of the organisation’s grant application and said that Lord should be “applauded” for doing “the honourable thing”.

“I think it’s very unfair what’s happened to Sacha Lord,” Burnham told Manchester Evening News earlier this month.

“This was a grant application in that very unprecedented time. Sacha Lord said we should be doing more to help people in the creative world that lost their income overnight. He came up with the idea of putting Greater Manchester content online [with] United We Stream.”

He added, “The grant was £400,000. Because there was a donate button on, Sacha Lord then raised funds for venues that had been shut down or people struggling in the night time economy.

“It raised £600,000. It entertained a lot of people, it got eyes on Greater Manchester culture at a time when everything was shut, and it raised a significant amount of money.

“Yes, there were inaccuracies in the actual application that was made, and absolutely, the Arts Council has a job to say there shouldn’t be.

“I personally don’t think it was fair for them just to look at the application in the narrow sense and not look at the wider things achieved. I would say this is one of the more successful grants the Arts Council has given.”