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Arts Council England is tightening up its funding conditions for larger NPOs, which will face sanctions if they fail to contribute to centralised data-gathering or miss diversity targets.

Photo of fireworks over Thames

Dominic Alves via flickr.com (CC BY 2.0)

National Portfolio Organisations (NPOs) will be the main beneficiaries of a boost to Arts Council England’s (ACE) funding budget for 2018-22.

A budget of £622m per year across Lottery and Grant in Aid will be shared between ACE’s three main funding streams: NPOs, open access grants and strategic funding. A record £409m will be allocated to the National Portfolio – £341m of this from Grant-in-Aid and £68m from the Lottery.

Of this, £37m will be earmarked specifically for:

  • increasing the proportion of the NPO budget spent outside London by four percentage points;
  • the integration of museums and libraries activity;
  • bringing new, small and diverse organisations into the portfolio.

Portfolio restructure

Announcing its funding plans for 2018-22, Arts Council England (ACE) confirmed that the designation ‘Major Partner Museum’ (MPM) will be dropped when these organisations are subsumed into its National Portfolio. From 2018, arts organisations will be in competition with museums and libraries for all funding for the first time, including the open access Grants for the Arts funding stream, which is being re-named ‘Grants for the Arts and Culture’. The budget for this will increase by £10m a year to a total of £87.5m.

ACE is extending its funding commitment to NPOs from three to four years, to give organisations “more stability and to allow them more time to put their business plans into action”.

The budget has been based on a predicted standstill settlement from government, supplemented by Lottery reserves that will be drawn down. When the next NPO funding round is announced in June next year, ACE will only confirm levels of funding for 2018/19 and 2019/20, with plans for the following years subject to a future grant in aid settlement from government and fluctuations in National Lottery income.

News of ACE’s new funding framework confirms details published earlier this year, when ACE first announced major changes in its approach. The National Portfolio, including former MPMs, will comprise three categories of organisation based on annual funding level: up to £250k; £250k-£1m; and over £1m. There will be a separate category for Sector Support Organisations, which includes Bridge Organisations, Museum Development Providers, umbrella and networking organisations, and strategic library and museum partnership bodies.

Requirements and monitoring

A ‘Relationship Framework’ sets out ACE’s expectations of its NPOs, including an increased emphasis on plans and policies relating to business strategy, diversity and equality, audiences and engagement, governance, self-evaluation and risk mitigation. NPOs that receive the most funding will be required to do more to meet ACE’s strategic goals, while the administrative burden on those receiving less funding will be lower.

In tandem with the new requirements, ACE is stepping up its NPO monitoring. Its Annual Survey will continue to collect details about audiences, staffing, touring, income, expenditure and digital content, but ACE is warning that “organisations should be committed to ensuring their data reporting is accurate and verifiable”. It will be checking the accuracy of the data, as well as publishing it company-by-company, and will be reporting on organisations’ ratings in relation to the Creative Case for Diversity.

Despite unrest in the sector and doubts expressed by incoming Chair Sir Nicholas Serota, all NPOs receiving over £250k a year will have to participate in its controversial ‘Quality Metrics’ scheme for benchmarking artistic quality as a condition of their funding. These organisations must complete “an agreed number” of quality evaluations each year. ACE makes it clear that an NPO will be “ineligible for strategic funds if it has broken the terms and conditions of its National Portfolio funding agreement”.

ACE is also threatening to withhold funding from NPOs that fail to meet diversity objectives, and those that fail to sign up and “regularly contribute” to the proprietary Audience Finder data-reporting service and principles, or enter into data-sharing agreements with other NPOs.

Announcing ACE’s new budget, CEO Darren Henley said: “We’ve planned a budget that lets us reach more people in new ways. We’ll increase investment outside London without damaging the capital; fund more new, small and diverse organisations. And museums, libraries and arts organisations will apply to us on a more level playing field.

“Everybody deserves to benefit from Arts Council investment, wherever they are, whatever their background. Our plans through to 2022 show we mean it when we talk about great art and culture for everyone.” 

Liz Hill