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Seventies band 10cc once sang “Art for Art’s sake, Money for God’s sake, ” which is a pretty good summary of the perpetual situation of the British cultural sector. Now thePipeLine can reveal that, in spite of interventions by senior executives of cultural bodies, including museums and galleries, going public with their fears for the financial sustainability of the sector over the coming winter, the apparent paralysis in Government regarding the offer of any amelioration, let alone solution, to the approaching double whammy of rising inflation and huge hikes in energy costs, now apparently extends England’s main public cultural funding body, Arts Council England [ACE].

In a move which can be interpreted as going on point to highlight publicly a potentially existential issue facing organisations across the cultural sector, Julia Fawcett, Chief Executive of the Lowry, told the Guardian on 17 August that the landmark Salford based theatre and gallery faced a threefold increase in energy costs, which would now likely exceed their entire annual award from ACE of £860,000.

With even cultural charities treated as businesses by energy providers and thus not subject to the energy caps which are supposed to shield domestic energy users from the worst of the price rises, Ms Fawcett added,

“We believe this is a major challenge that will be felt across our sector,”

At the same time Hannah Prowse, CEO of the Portsmouth Naval Base Property Trust, said on Twitter, that the Trust’s costs had risen from £92k to a projected £644k and stated that this was simply not sustainable.

It should also be pointed out that the current crisis could not have come at a worse time for many organisations in the cultural sector.

With the footfall at theatres, museums and galleries beginning to recover after the Covid pandemic, and many, including the Lowry, still recording financial losses, ACE is currently engaged on its National Portfolio Round, where organisations are required to submit complex funding bids, including detailed financial projections and plans putting into practice the Arts Council’s four Investment Principles: Ambition & Quality; Dynamism; Environmental Responsibility; and Inclusivity & Relevance.

The prize of success in the NPO funding round is measure of financial stability as a National Portfolio client .

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The unspoken threat voiced by these significant individuals and institutions in the culture sector is that the lengthy and stressful process of making an NPO bid will be rendered essentially useless because, while the bids are already in, the financial assumptions underpinning those bids seem to be changing almost daily and generally for the worse.

Adding to the uncertainly, the Arts Council has stated that it will make public its decisions on NPO applications by the end of October [2022], at a time when a Truss or Sunak Government is likely to be issuing an emergency budget and spending plans and struggling to find an effective response to the crisis.

In the light of this thePipeLine decided to ask Arts Council England whether it could reassure concerned organisations and their staff, that the body would be supportive and that it was alive to the possibility it might have to adjust timetables and priorities, particularly of the current NPO round.

Why, we asked in particular, is there no comment or advice for ACE clients responding to the ongoing energy crisis on the Arts Council England website landing page?

We also asked if ACE is engaging currently with clients such as the Lowry, and with Government, to develop strategies to ameliorate the impact of rising energy costs on clients, particularly building based clients, including entertainment venues, museums and galleries?

Finally we asked, if ACE expected it will need to adjust its programmes, including the current NPO round, to take account of the current hikes in energy costs which are likely to be sustained into 2023 and could well render earlier financial projections useless.

However, rather than address any of these issues, a spokesperson for the Arts Council told us simply,

“The impact of the energy crisis is affecting everyone in the country and we aren’t able to speak for the current Government on this.”

Of course, while the statement suggests that the Arts Council does not see its role as intervening proactively to help the cultural sector respond to the growing economic crisis, it is highly likely that Darren Henley, the CEO of ACE and the senior leadership of the Arts Council, is making it clear to the ministers who remain in Government precisely what kind of financial and cultural disaster may be coming down the track, if the predictions of Julia Fawcett and Hannah Prowse are correct and are replicated across the museum and gallery sector.

Contacts with the permanent civil servants in Whitehall, who provide the continuity between political administrations, will be especially important as it is they who will have to brief ministers as soon as a new Government is formed.

Some people familiar with the sector suggest also that the senior managers at ACE may be looking at the National Portfolio programme and scoping contingencies whereby, if the Government fails to provide additional funding to offset at least some of the inflationary and energy price hikes, the scheme can be reconfigured to free up money to support clients. Perhaps particularly those in the regions.

However, nobody expects any solution based on the National Portfolio round would be entirely without pain for the sector and could come at the expense of the big ticket London based organisations.

This is an outcome some voices in the arts and culture sector have been calling for for some time.

Others will argue that the most important objective is to maintain the status quo in so far as is possible, pointing out that it would be a sign of failure, not to mention a colossal waste of public money, if any of the over 5000 organisations across the UK which have been supported through the worst of the Covid-19 pandemic, to the tune of £1.57 billion in direct Government support and recovery funds, were allowed to go to the wall barely months later.

For now, in the absence of a functioning Government, and with the two candidates for the leadership of the Conservative Party offering no hint of how they will deal with the cost of living crisis, let alone their policies towards the cultural sector, nobody knows how the National Portfolio dice will fall and what will be the wider context for cultural funding after 5 September when the new Prime Minister is named.

In those circumstances the Arts Council’s failure to offer even the mildest statement of support to its existing clients, can only add to the sense of uncertainty, isolation and fear of a sector facing an unprecedented financial crisis, both personal and institutional during what is already a stressful period, especially for those applying for NPO funding.

As one source in an organisation which is the recipient of an Arts Council grant told thePipeLine wryly,

“If they don’t prepare for this, it may be that we get to the end of next year to find that the Arts Council’s entire budget has been spent on paying the cultural sector’s electricity bill.”

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thePipeLine is an independent news publication that investigates the place that heritage, politics, and money meet.

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