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Arts Council issues recovery fund guidance

Despite a wave of announcements designed to rescue the arts sector devastated by the coronavirus pandemic, there are fears the £1.57bn recovery package is too little too late.

4th Aug 2020
Sports business reporter
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£1.57bn support package for arts venues slow to arrive
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AccountingWEB columnist Philip Fisher, also the London editor of britishtheatreguide.info, said that after “wowing people with a big number” the government’s delay in getting tangible help to the industry shows a lack of understanding and interest in rebooting the arts.

“With every week that goes by more venues are closing or making people redundant,” said Fisher, adding that the business rates holiday and furlough scheme are not enough for some venues to stave off collapse.

Just this week the Ambassador Theatre Group confirmed 1,200 staff redundancies, with a further 130 announced by Nimax Theatres.

“The amount is inadequate once distributed, a tiny fraction of what is needed. A much bigger bailout is the only solution,” he added.

The Culture Recovery Fund to safeguard the future of museums, galleries, theatres, independent cinemas, heritage sites and music venues promises £880m in grants and £270m of repayable loans.

But details about its distribution only emerged on Wednesday 29 July, fuelling confusion and anxiety across an arts industry in crisis.

Available funds

Of the grants pot, £622m will be distributed in phase one, with Arts Council England administering £500m. The fund includes £2.25m in emergency support for grassroots music venues to save around 150 venues “at imminent risk of collapse”. 

There’s also £30m grant support for independent cinemas and another £92m to protect heritage sites. A separate £500 m scheme aims to revive the UK’s film and television production industry.

After the Department for Digital, Culture Media and Sport (DMCS) announced its £1.57bn arts venue support package a few weeks ago, Chancellor Rishi Sunak said the cash was “vital” to safeguard the survival of a sector that employs more than 700,000 people. Yet it took more than four months for the Arts Council England to launch its application process and set out the criteria to access grants and loans.

At a time of dire need for the arts industry, the remaining £258m of grants is being held back until later in the financial year “to meet the developing needs of organizations”, according to the DMCS.

Arts and cultural organisations based in England registered at Companies House and/or the Charity Commission and able to produce at least one year’s full independently certified or audited financial statements can apply for funding ranging from £50,000 to £3m.

According to Arts Council England, “Organisations must have been financially sustainable before Covid-19 but are now at imminent risk of failure and have exhausted all other options for increasing their resilience.”

The fund aims to provide support over a six-month period to ensure they can reopen by 31 March 2021, or operate on a “sustainable, cost-efficient basis until they are able to reopen at a later date”.  

Swathes of guidance

Under-pressure arts bodies and venues, already trimmed to skeleton teams, will have to navigate their way through swathes of Arts Council of England guidance to tailor their applications. The arts body expects to allocate 75% of the £500m grants in the first of two rounds, which have application deadlines of 21 August and 4 September.

Successful applicants requesting up to £1m will be notified no later than 5 October; nearly two weeks later for those seeking more. Round two applicants will receive notice from mid-October to early November. But there’s no certainty of how quickly after that funds will reach bank accounts.

Arts bodies cannot apply for grants and repayable finance. The DCMS is stalling on details of its £270m loans programme, saying only that any organisation requesting £3m or more must apply to this pot only. Loan terms are expected to include repayments for up to 20 years, with an initial repayment holiday of up to four years, and a 2% interest rate per annum.  

A Culture Recovery Board will advise on the largest grant and decide the beneficiaries of the repayable £270m finance package. 

The DCMS insisted that successful applicants will need to have an innovative plan for how they will operate and be sustainable for the remainder of this financial year, and be able to demonstrate their international, national or local significance. “Smaller organisations must show how they benefit their local community and area,” the department added.

Still under threat

While marquee arts bodies and venues may expect to be among the winners, there will be plenty of losers. The future of some mid-size and smaller theatres and music venues is under threat. And the grave concerns go much further.

Creative Industries Federation CEO Caroline Norbury laid bare the challenges in her response to how funding will be distributed: “The majority of the creative industries ecosystem is made up of freelancers, microbusinesses and SMEs and there remains an urgent need for direct support for the self-employed, particularly for those who will be much later to return to work.”

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