Worcester City Council has restored direct funding for the arts following a campaign by the Worcester Arts Council.
The local authority gave a £3,000 annual grant to the council until 2018, when it decided instead to run a community grants scheme in house.
It has now returned to funding Worcester Arts Council with the support of city council Chief Executive David Blake and council leader Marc Bayliss.
Worcester Arts Council estimates 5,000 people benefitted from its small grants programme in the year preceding the pandemic.
“I am delighted that Worcester Arts Council can once again support local arts organisations," Chairman George Squires said.