By Marcus Leach

The Arts Council England unveiled its National portfolio of funded organisations, following its landmark decision in 2010 to introduce a new funding system and framework for the arts in England, and the 29.6% grant in aid (GIA) cut to its 2011-2015 budget from government. 14.9% of this cut has been passed on to the budget for portfolio organisations.

The new National portfolio comes into operation in April 2012, and will be shaped by an ambitious 10-year strategic framework against a challenging economic backdrop.

Dame Liz Forgan, Chair of Arts Council England, said:

"This is about a resilient future for the arts in England. We have taken the brave path of strategic choices not salami slices which has meant some painful decisions, and it is with great regret that we have had to cease funding some good organisations.

"But we will still be supporting excellence, exceptional talent and successful risk-taking; helping organisations to get their great work out far and wide; backing strong leadership and cultural entrepreneurialism; supporting resilient organisations that can thrive as well as survive; and encouraging work that really enthuses children and young people — because that’s where it all begins.

"We have tried to go about this difficult process collaboratively, and with honesty and clarity of purpose. We have been helped enormously by having a 10-year shared vision for the arts, which has focused our minds."

Alan Davey, Chief Executive of Arts Council England, said:

"There have been some really hard choices as we had so many good applications — more than we were able to fund. In advance of the Spending Review, we said “cut us, don’t kill us”. Well, with the help of Lottery income, for which we are grateful, we’re alive and kicking. But we do regret that we have been unable to fund perfectly good organisations, and I know this will be taken hard by those affected.

"After a thorough process, we believe we have achieved a balance of continuity and change, and of local and national. And we’ve enabled artists and arts organisations to continue to create the great art from which so much springs. This is a collection of decisions that will mean the arts will not retreat from the important part they play in our national life."

Following the 29.6% real-term cut to the Arts Council’s GIA budget for 2011 to 2015, announced in the Government’s Spending Review, Arts Council England decided to limit the cut to the budget for funded organisations to 14.9% real terms (6.5% cash) over the four-year period. This 14.9% cut represents the impact on the spending power of organisations.

Lottery income, in contrast with the declining grant in aid from government, is projected to rise over the same period (by £5 million in 2011/12, £29 million in 2012/13, £7 million in 2013/14 and £2 million in 2014/15). This money will be used, in line with Lottery directions, to fund projects that are additional to core government spending. Together, National portfolio funding and Lottery income will be used to complement each other, ensuring that investment goes where it is most needed.

From April 2012, Lottery funding will be allocated against three areas, ‘Strategic’, ‘Capital’ and ‘Grants for the arts’, so that it can be used in the most targeted way. The National portfolio application process is Lottery compliant so that Lottery can be earmarked, where appropriate, to support the portfolio.