Restore the Arts: impact, precarity, and action, in National Portfolio Organisations 2023-2028

15 years of austerity-era standstill funding for NPOs is hobbling public programmes, thwarting ambition, holding back sector development and business model investment, while negatively impacting working conditions for staff and artists

In May 2025 Artquest surveyed leaders of all current NPOs (983 of 990 funded in 2023: 7 organisations from the 2023-26 portfolio have closed), and analysed public NPO annual reporting data. We heard back from 248 (25%).

In the run-up to the 2025 Spending Review after an unprecedented period of standstill core funding for arts organisations, we wanted to find out about the issues faced by organisations in receipt of regular funding from Arts Council England (ACE): national portfolio organisations, or NPOs, across all artforms, and across the whole of England. ACE itself gets Grant-in-Aid funding from the Government via the Department for Culture, Media and Sport (DCMS), along with a share of Lottery funding, and other forms of income.

The 2025 Spending Review for culture: more cuts to come

The 2025-29 period, covered by the Spending Review, has further cuts to culture.

DCMS total budget in 2025-26 is £8,445m, around 0.35% of total government spending. The department is facing expenditure reduction of 1.4% (£118m) between now and 2029-29. The department’s administration budget (in 2024, this was £194m) will be cut by 15% (around £29m) by 2030.

These are cash terms cuts – inflation predicted by the OBR will likely take an extra £11m in real terms to 2029.

The Spending Review also announced an extra £132.5m to support youth access to culture, arts, sport and safe spaces.

In a related note published by the Office for Value for Money, “DCMS and its public bodies will deliver efficiency gains of £52m per year by 2028-29” in workforce, grants, digital, communications and estates.

How DCMS will decide where to cut the organisations it funds – including Arts Council England – and what to spend additional funding on, including the split between arts and its other functions, are expected in due course.

Overview articles of DCMS impact:

• The Art Newspaper: UK department of culture faces cuts following government spending review
• Museums Association: Spending review reveals cut to DCMS budget
• Campaign for the Arts: What did the 2025 Spending Review mean for the arts?

We can’t keep going on like this, something has to give. The Government must invest in the sector now, or I fear the sector will be run by, and ultimately for, the rich

NPO leader

Key messages

1. All arts organisations agree that ACE NPO funding is vital to get all forms of other income – whether from public or private sources, across all artforms, and everywhere in England
2. Standstill funding since 2010 means NPO grants have lost 58% of their value. Even those organisations who joined the portfolio in 2023 will have lost 17% of their grant by value to inflation by the end of this funding round in 2028
3. 93% of all NPOs have tried to increase their income since 2023, but
   • resist passing on costs to audiences who are feeling the pinch, and
   • are hampered by core standstill income to innovate and invest, and
   • are spending and earning more money, but because of inflation 38% still had to reduce programmes since 2023, with 34% planning further reductions to 2028
4. As a result, over half of NPOs are in a precarious financial situation, with deficit values for the whole portfolio rising by £89m, about as much as inflation has devalued grants.
5. As a result, 62% of NPO leaders feel more stressed than 12 months ago, while 51% are taking less leave and 69% are working longer unpaid hours. The arts are relying on the continued goodwill of senior staff to keep the show on the road. A significant source of stress is ACE’s funding reporting requirements.

Recommendations: #RestoreTheArts

Standstill funding has sucked about £100m from ACE NPO supported organisations, leading to an £89m increase in deficits across the portfolio.

To urgently stabilise the sector to invest in its future and innovate for more commercial income, the arts need an urgent restoration of core, public funding, offsetting losses to inflation and price rises during the cost of living crisis of recent years. Though ACE NPOs on the whole have show themselves to be innovative and resilient, without adequate core funding, around half will face continued, severe financial challenges. Up to 7% are at risk of closure before the next NPO funding round.

Full recommendations and all anonymous survey data and more information about our methodology is below.

While its technically only 20% of our income, to lose our ACE funding would effectively be like pulling the pin from a grenade. We would struggle to survive

NPO leader

1: ACE provides keystone core income that is vital to raise money in other areas, whether private, public or earned

An unambiguous majority of NPO leaders – 81% – say that Arts Council England funding is key to bringing in other public funding. Interestingly, 73% also see ACE funding as important to bringing in contributed income too – from sponsorship to donations, tickets to fundraising, having a core of ACE support unlocks more investment.

This opinion holds across NPOs from all cohorts, whenever they joined the portfolio, and across all regions of England, and for all artforms.

Arts Council funding is essential to our existence. We wouldn’t be able to work if we didn’t have it, simple as that. They’re the only funder that supports and respects artists to deliver. Arts Council NPO funding secures as much again from many other public sources for us. As a small business, two thirds of our turnover goes back into the local economy, on wages, services, and materials

NPO leader

Evidence that this attitude is based in reality can be found in the NPO Annual Data Reports.

Every year between 2015 and 2025, ACE NPO grants were less than 25% of total income across the portfolio. Even at the height of Culture Recovery spending, support from ACE from all sources (including NPO and all other ACE grants) did not rise above 40% of total NPO income. NPOs, on average, are mostly funded from outside of ACE support.

Given the highly challenging funding environment and Government austerity since 2010, NPOs have been very successful at keeping ACE income to a minority of their income, providing excellent value for money in return for public support. Without this core ACE support, other income would be near-impossible to earn.

ACE need more funding: Let’s Create is a brilliant strategy. Arts and cultural organisations and local authorities need more money: arts and culture should run through all the public services, embedding the raft of benefits they bring everywhere. But we will always need funding

NPO leader

2: By 2028, NPO grants will have lost 68% of their value since 2010

Arts organisations who joined the National Portfolio in 2010 have so far lost 58% of their grant value due to inflation. By the expected end of this funding round, using Office for Budget Responsibility (OBR) projections, grants will have lost 68% of their value.

This impact on NPOs has been unevenly distributed, with NPOs who joined the portfolio longer ago facing steeper loss in value due to inflation than those who joined more recently. But even those NPOs who joined the portfolio in 2023 will lose 17% of their grant’s value to inflation by 2028.

The latest [NPO] extension year means we again have to stick to our 2018 budget and our 2022 activity plan

NPO leader

Despite the negative impact of inflation loss to standstill funding, there is overwhelming support for the NPO programme and ACE in general:

We need the NPO to continue and for ACE to receive better resource from the government. ACE is vital to the cultural infrastructure of the UK, which, at these trying times, is a much needed source of learning, education, inspiration, hope and comfort to the British public

NPO leader

Standstill funding since at least 2010 is affecting older organisations with the most collective experience and, often, the longest-serving staff. 77% of surveyed leaders represented organisations founded before 2010, with 43% joining the portfolio before 2010. Only 9% of NPOs surveyed were founded since 2022 and joined the portfolio in the 2023 cohort.

Why haven’t ACE increased NPO funding?

ACE annual reporting since 2016 shows how successive governments have near-frozen ACE grant-in-aid contributions via DCMS. ACE’s NPO spend has broadly tracked its own standstill DCMS Grant-in-Aid income closely.

Ignoring pandemic Culture Recovery funding to look only at business-as-usual spend on NPO grants makes ACE’s standstill income clear. Lottery funding has also remained virtually static through this period.

With the increase in NPOs from 676 in 2016 to 990 (983 remaining) in 2024, the average grant per NPO dropped from £420k to £350k between 2016 and 2024.

Although the COVID-era Culture Recovery fund (roughly 2020-23) saw significant, and welcome, support to the sector, Grant-in-Aid has since returned to levels similar to those pre-pandemic in cash terms. Had ACE’s DCMS Grant-in-Aid income risen by inflation since 2016, it would have been worth £592m in 2024 instead of £495m: a real-terms drop of £97m over 8 years.

Did any NPOs get increased grants?

In each funding round since around 2010, ACE has instructed NPOs not to apply for more funding than they received in the previous round, passing on the income freeze from DCMS.

In a few exceptional cases, additional funding was provided to some NPOs for specific additional projects – not for rising core costs, but for extra work.

At the point at which a company joins the portfolio, you become ‘stuck’ at the figure that you start on, which, ten years down the line, makes little sense in the context of the rest of the portfolio. We have unsuccessfully asked for an increase in previous rounds, knowing that if we were granted one we would have to justify it with more activity, leaving the same income gap to fill

NPO leader

3: Since 2023, NPOs have taken action to mitigate real-terms cuts: increasing commercial activity and cutting programmes that don’t generate income

NPOs who have been in the portfolio since 2010 had already lost 39% of their grant’s value to inflation by the start of this funding round in 2023.

They were most likely to have taken steps to increase income and decrease expenditure. But across all cohorts, 93% of NPOs have taken action to increase income since 2023. 7% of NPOs have not increased income since 2023.

• Most popular income generation attempts were commercial and fundraising activity (81%), and applications for project grants from public (75%) and private sources (64%)
  • An increased focus on commercially viable projects was seen by some as eroding the public value of the funded sector, making some less likely to produce more risk-taking projects or nurture artists earlier in their careers
• Applications for core funding were less popular (48% public sources, 42% private sources), reflective perhaps of there being very few such funds available outside of ACE NPO grants.
  • Project funding is inherently less stable and more labour-intensive, meaning NPOs have had to work harder for more precarious funding.
• Increased costs to audience members are generally resisted, with raised ticket prices (33%) and friends / members schemes (13% starting such a scheme, with 19% raising the cost of an existing scheme) being less popular ways to increase income

We cannot and will not pass cost increases on to those who we work with. As they are the hardest hit by the current financial circumstances, we therefore have to seek more and more creative ways of bringing money into the organisation

NPO leader

Some respondents identify multiple challenges to generating income which, taken together, begin to be overwhelming and insurmountable. Many mentioned the forthcoming proposed changes to the Access to Work scheme as likely to have a detrimental effect on disabled artists’ livelihoods and employment prospects:

The challenges we face are not only standstill funding: we are in the midst of a poly-crisis. Sustainability requires investment; audiences want new or more innovative work for less, or for free, yet it costs more to produce. Hard costs are going up, driven by inflation and global unrest; access provision is costing more (and rightly so), and audiences generally have less money to spend. We are ever more commercially reliant, which causes mission drift and puts our public funding at risk. However, we approach our challenges in a positive vein, and have ridiculous optimism that we will soon see a shift

NPO leader

Others link income challenges to wider social problems caused by the austerity policies of previous governments:

We see the effects of austerity, not just internally but in the audiences we work with – sometimes people come in not to see the exhibition, but to keep warm, or want to talk to our front-of-house staff because they just want to talk to someone. We have had children attending projects who had not been fed in the morning. The arts used to provide the dressing on the salad, but now there’s no more salad

NPO leader

For yet others, potential income is limited by target clients and partners who have been similarly underfunded or face challenges to their own income:

Despite all the energy we’ve put into developing new partnerships over the past 18 months, plans are failing … as those sectors, industries, and places face their own hard times

NPO leader

Ironically, NPOs have been quite successful in raising extra money between 2015 and 2024, through a mix of:

• commercial activity (up £190m, 15%),
• sponsorship, donations, fundraising, and trusts (so-called ‘contributed income’ in ACE NPO reporting terms, up £99m, 31%), and
• other public funding (such as grants from local authorities, up £170m, 48%).

But since inflation is rising faster, spending power is not increasing enough to stave off increased risk and precarity. Crucially, core costs, often those provided by NPO funding, remain stagnant, meaning increases in income are linked to increases in more-or-less short-term projects.

Reducing spending: action since 2023

Since 2023, 74% of NPOs have tried to lower their spending, making savings across back-office costs and processes, programmes, staffing and buildings. 26% of all NPOs report not reducing spending in this period, mostly organisation who joined the portfolio in 2023.

51% of NPOs surveyed had made efficiencies in their back-office administration, with reduced permanent (37%) and casual staffing (33%) also popular strategies. However, fewer staff is having a real impact on capacity to deliver, invest, and innovate business models, as well as on increased stress:

We are continuing to deliver, but what isn’t seen is the impact of cuts and reductions on those staff that remain – who are working at, or beyond, capacity to ensure programmes continue because they feel a responsibility to the community who rely on the programmes to support their wellbeing

NPO leader

Some organisations are reporting that further staffing cuts are no longer possible:

It is becoming impossible. We cannot be leaner – we are now down to a core team of two co-leads and two … trainees. In real terms, funding has reduced from ACE (it has basically been at standstill since 2007) and funding from our [host] partner is increasingly pressured

NPO leader

Some other options to holding costs to standstill level are also approaching a tipping point. Hardly any NPOs have reduced artist fees (6%) or staff salaries (8%), but many have been unable to increase payments in line with inflation.

We remain a small, exhausted, underpaid team, who year upon year are expected to do more with less. There is no room or time to catch our breath; no money to restabilise, there are no more sources of unrestricted / core funding left for us to explore. We run a lean organisation, there is nothing else to trim

NPO leader

Our artistic excellence will suffer if we further pare back investment in production to reduce costs. One very well known funder openly said a bid was rejected – after months of work – as the project management (staffing) costs were too high

NPO leader

Reductions in artists employed are most seen with more established NPOs – those who have been regularly funded by ACE since before 2010 – with 20% reporting reduced artist employment. This could be reflective of the need for deeper cuts as a result of the longer-term value loss to inflation in their NPO income, and follows from 38% of NPOs saying they have reduced programming since 2023.

There has been additional impact on buildings-based organisations, with 16% reducing their opening hours, while 14% moved or left their building.

The organisation left its site of 50 years at the end of April 2025. We are now non-building-based

NPO leader

Some comment on the bind they face – needing better, larger, or additional premises to combat high utility bills and reduce emissions to tackle the climate crisis, while operating on real-terms reduced NPO core income:

We have a good level of reserves and are embarking on a capital project to move our engagement activity into premises with better potential for income-generating activity and community engagement. But we will need to run this additional premises with similar staff to cover increased short-term overhead costs. We have [also] identified risks associated with our current heritage … building, which is in need of significant capital investment

NPO leader

4: The view to 2028: no more cuts possible and running out of options

We asked NPO leaders about the period to 2028, when the current NPO round is expected to end.

The current round of NPO funding was originally intended to end in 2026, but has been extended to 2028, likely in response to the Hodge Review, and the later-than-anticipated Spending Review. Standstill NPO funding will remain in place until at least March 2028. As a result, a substantial proportion of NPOs will experience real-terms standstill funding of almost 20 years.

While a small handful of NPOs sent positive messages about their individual organisations, almost everyone else told us they expect a highly volatile future for their organisations and the funded arts sector.

Hearteningly, only 2% are not at all confident that their organisation will still exist, with a further 5% not very confident – up to 16 current NPOs who have little or no confidence they will continue to 2028.

While 32% (79 NPOs) are optimistic that their organisations will largely continue as they are now (26%-37% across all cohorts), 55% (136 NPOs) anticipate doing less or different things than now.

Of note, the most confident are those organisations who were established since 2022, with 33% totally confident they will continue largely as now.

Same income sources from 2023 to 2028

Potential income sources in the period to 2028 remain very similar to those since 2023, as NPOs struggle to innovate business models on shrinking funding:

NPO funding has transformed our ability to develop long-term relationships with underserved audiences. We are really proud of what we have delivered through such a challenging time financially. But standstill funding means less and less is possible every year, both in terms of programme delivery and organisational development for increased income generation

NPO leader

NPO leaders again plan to continue to increase commercial and fundraising activity, and make more project grant applications to public and private funders at much the same rate as the period to 2023. There is virtually no change in income strategy except increases in applications for core funding outside of ACE, lessening its role as England’s national development agency for creativity and culture.

Some NPO leaders comment that standstill funding is hampering their ability to respond quickly enough to changes in the funding environment, particularly with the change in focus from previously arts-supporting trusts and foundations:

There is a massive crisis within the arts funding world. The trusts and foundations who have been the mainstay of our income for years have largely withdrawn from the arts … We cannot change our business plans fast enough to respond while still delivering work: without funding to deliver the work we will close, as ACE funding covers only 35% of our core costs

NPO leader

Reducing spending to 2028: nothing left to cut

In contrast to income expectations, projected reductions in spending will look quite different in the period to 2028 when compared to those since 2023. Many NPOs are changing tactics in saving money as spending, unlike income, is more directly under an organisation’s control.

The graph below shows the difference in NPO spending plans between 2023 and 2028.

5% of NPOs do not expect to increase their income at all to 2028.

Given the cuts NPOs have made since 2023 and current difficulties in operating on reduced staffing, this could indicate that no further cuts are possible.

Fewer NPOs state they can make further efficiencies in expenditure, in particular:

• energy bills (12% less),
• administration (21% less), and
• reductions in permanent staff (19% less)

are less likely in the next 3 years as the last 5.

In general, the fewer NPOs with plans for further cuts to expenditure hints at a recognition that there are no more economies to be made. Of note, only 6% continue to see reductions in artists fees as possible in the period to 2028. As seen in the period from 2023, NPOs will continue to resist passing on income generation to tickets or membership schemes.

We don’t pay artists and freelancers well enough and I cannot see a way to improve this

NPO leader

34% of NPOs say that (further) programme cuts are likely but there is skepticism among NPO leaders as to how long reducing programmes will continue to be acceptable, particularly as expenditure on programming is diverting money that should be spent on other vital activity:

ACE suggests doing less, but are they really going to pay us 25% more for doing 25% less? That’s the reality. If we were really serious about EDI [equality, diversity and inclusion], we would be doing 50% less and spending realistic money on access. … Organisational resilience is low, so we live on a wing and a prayer that there are no unforeseen challenges that will lead to a higher risk rating and jeopardise our chances of future funding

NPO leader

Programmes to cut could include front-of-house events like exhibitions, performances and other general audience-facing activity, but in comments some NPO leaders mention cutting programmes based on income generation potential instead of need. Commercial income is starting to trump organisational purpose when looking at areas of saving.

Learning programmes have all but gone as they are expensive and unfunded. Our team of freelancers has reduced a lot as we do less work, less outreach, and so require a smaller pool

NPO leader

We asked NPO leaders what they need most right now: overwhelmingly, they say more public funding. This holds true across all cohorts, artforms and regions. NPOs who have joined since 2012 show an appetite for support on business models innovation, and there is a low but constant desire for simpler ACE funding reporting.

5: Up to 521 NPOs – 53% of the portfolio – are in a precarious financial position

To help gauge precarity in the portfolio we tracked budget deficits from 2015 to present using public data, and asked NPO leaders to share their predictions for financial years ending in 2025 and 2026.

Organisations are acting to reduce expected deficits from this to next financial year. 47% of surveyed leaders expect a deficit in their financial year ending 2025, or have already posted one, with 39% expecting a deficit next year.

The number of NPOs reporting deficits (when the impact of temporary COVID funding is removed) have risen from 36% in 2015-16 to 47% (predicted by NPO leaders) in 2024-25. But the cash value of deficits for the whole portfolio has risen £89m, from £29m in 2015-16 to £118m in 2023-24. This is almost the same amount as inflation has reduced grants in this period. NPOs deficit value is worth almost exactly what standstill funding has eroded from income.

Looking at the NPO Annual Data Reports, organisations now find themselves in the paradoxical situation of more cash spending on smaller artistic programmes. Expenditure on artistic programme rose 30%, from £856m in 2015 to £1,116m in 2024, but 38% of NPOs leaders reported reducing programmes in the past year. As discussed above, NPOs are also getting more and more money from sources other than ACE, but still having to cut programming.

Deficits have increased despite contributed income increasing almost £100m and earned income by almost £200m in the same period across the whole portfolio. Even though NPOs are making much more money than before, the trend in deficit value continues to rise during the period to 2028, largely due to standstill funding.

Interestingly, there seems no correspondence between risk rating and deficit experience – only one organisation stating they were seen as a major risk by ACE, the highest level, was expecting a deficit in 2026. Of organisations posting or expecting deficits in 2025, none were seen as a major risk.

Using certified values reported for the previous year, public NPO data can be tracked back to financial year 2015-16. We examined NPOs based on the typical rule of thumb in the charity sector to hold at least 6 months’ expenditure in unrestricted, undesignated funds and cash.

Excluding the distorting effect of the years of COVID Culture Recovery funding (2020-2023), there has been a drop in the number of ‘precarious’ NPOs from 65% in 2015 to 53% in 2025. While encouraging news, this suggests that more than half of all NPOs – up to 521 – are in a precarious financial position.

The situation for NPOs hosted by Local Authorities (LAs) or Higher Education Institutions (HEIs) is more acute. It is hard from public records to identify exactly how many hosted NPOs there are, but we estimate around 66 NPOs, 7% of the total. All hosted NPOs who responded to our survey stated that lost income would not be replaced by their host institution, and that they would either have to make do with reduced budgets or close down. This puts further pressure on exactly those NPOs who are already highly supported by a partner. It is an unintended quirk of the system that NPOs who are most supported by partnerships are at even more at risk of closure or grant reduction by value to inflation. The well-documented challenges to university and local council budgets since 2010 do not allow scope for funding to be topped-up by these sources.

Museums (in particular civic museums) rely upon core ongoing funding and have done a huge amount to commercialise opportunities. But we’re at huge risk of closure due to lower local government funds, and the pressure to divert those that remain to deliver statutory services. This places all non-statutory services such as museums and culture at risk. The ability for local authorities to support their local cultural sector is severely compromised in many areas – particularly outside of London

NPO leader

6: Stress on NPO leaders: 62% are more stressed, 51% are taking less leave, and 69% are working longer unpaid hours

Neither myself or my peers have experienced such fearful and stressful times in our 30+ year careers. Things are now far worse than during the pandemic, and continue to get worse every day

NPO leader

Work-related stress is an important predictor of potential sickness absence, staff turnover, and reduced wellbeing in other areas of life. To avoid a lengthy, intrusive survey, we asked NPO leaders about only three broadly indicative stress markers:

• changes in leave taken,
• feelings of work-related stress, and
• changes in unpaid hours worked.

Across all 3 markers, NPO leadership is showing the impact of stress. Although stress markers are prominent in all NPO leaders, the greatest reported stress is in NPO leaders who joined in 2023 and those who joined before 2010.

Almost half of NPO leaders are taking less leave, and nearly 70% are working more unpaid hours than 12 months ago. Over 60% report feeling more stressed, 45% significantly more.

The last years have been an increasing uphill struggle. Increased accountability, increased work, increased stress, having to work with fewer staff, working harder and harder to stand still or retrench. … I think we are reaching a tipping point where many organisations will just not be able to make it and that will be a huge loss

NPO leader

NPO leaders in our survey reported a median of 5 FTE employees (over 6 actual staff members) in their organisations, suggesting little capacity to spread workload to other staff. We were told that reducing permanent staff was a popular in action taken since 2023 to reduce expenditure. As a result, the data suggests that NPO leaders in shrinking teams have taken on more responsibility and workload in the past 12 months.

I am very close to burnout. I’m mobilising everything I can to protect my team and the future of the organisation but it continues to come at great cost to myself

NPO leader

Some fear for the future of a sector where low pay and long hours are a structural feature:

The impact on cultural leaders is severe; I have so many friends in the sector who are burnt-out in their 40s and early 50s, and younger generations are far less willing to flog themselves as I was (and quite right too!). For me, working in the arts was a vocation. For successor generations, it’s only a job. While that’s OK, the biggest subsidy in the arts sector for decades has been the unpaid overtime put in by staff, and without it I cannot see how we can continue to function

NPO leader

Funding reporting is seen as inappropriately complex, onerous and overwhelming

NPO leaders report strong support for the amount of contact with their relationship manager, but struggle under reporting requirements for grants, which are widely seen as inappropriate to their resources and amounts received – an issue already identified by ACE as a priority for future funding rounds. However, given the current stress issues impacting NPO leaders, and the lack of other staff to spread the workload, ACE should prioritise more appropriate funding reporting now, within the extension years to the 2023-26 NPO round.

The NPO reporting is killing us. Resourcing reporting are costing us in real terms around £15k a year. The Investment Principal structure makes our board bored and uncreative

NPO leader

Recent attempts by ACE to simplify reporting have inadvertently made the process more difficult, since new templates require more work to reinterpret:

Changing the formats to simplify the requirements, as has now been done twice, actually creates more work because we can’t copy data over from one year’s templates to the next. … We need to be using our time productively

NPO leader

Some leaders express concern for other ACE reporting, such as Illuminate, and question if data required by ACE to monitor its investment could be gathered in a more streamlined and ongoing way, reducing stress around annual deadlines:

As a smaller arts organisation, we would appreciate if our reporting to ACE was in line with the size of our organisation. We also believe that the Illuminate portal is still not fit for purpose. Some of the data for the Annual Survey could be collected via our quarterly reports rather than doubling up reporting at the end of the year

NPO leader

Of most concern seems to be that the templates used in reporting are not fit to get across the nuance of different activity, meaning ACE is missing rich detail of NPO activity which could support their own work, research, and campaigning:

Whilst the ACE reporting templates are usable, they feel irrelevant to the output of our organisation – we have forced them to fit, but would welcome more organisation-specific reporting. I haven’t heard any NPO peers say that the templates align with their work

NPO leader

ACE reporting templates are a waste of our time and not helpful for grant-funded [organisations] who … cover a completely different range of … activities to performing and visual arts. Our board finds the templates useless for information, guidance or governance

NPO leader

We are a very small organisation (2 core staff) and the reporting requirements from ACE are the same as the larger organisations who have much more resource and capacity. Almost all the ACE Investment Principles relate to the work we do, but there are some areas where we feel like we’re doing extra work to please ACE, rather than doing what genuinely works for our organisation and mission. I think some extra thought around the reporting requirements for large v small organisations would be really beneficial

NPO leader

Some organisations, however, see a positive impact in ACE NPO reporting, as it makes them look at their activity in what feels a more professional manner:

The stability that being an NPO has provided has had huge benefits – we’re able to do much more of the work we love, employ wonderful freelancers, actually be paid at all for the work we do (before NPO funding, lots of work was unpaid and stressful and we couldn’t afford to take holidays without worrying about periods of no income at all). Yes, the reporting and having an Advisory Board for the first time is a lot of admin BUT it’s also meant we have data for the first time, have to think about all the ways our work is sustainable, inclusive, dynamic and the best it can be, as well as having wonderful people feeding their expertise into our work regularly. Overall, I’d said the NPO funding has been hugely positive for us! I personally struggle to switch off and find a good work / life balance – but that was ever thus. Being an NPO has meant that we are infinitely more stable, better resourced, have greater capacity and are able to grow, thrive, and help others to too

NPO leader

There were no comments from NPO leaders saying they did not approve of any reporting to ACE – all NPOs take the responsibility of the trust they have to spend public money and support the need to account where this is spent. ACE would be well advised to engage with the NPO sector at large, particularly with samples of activity in different artforms and scales of organisation, to create more effective reporting that helps organisations and informs ACE on the health of the sector.

Recommendations

We operate in a political environment that continues to favour cuts, promote competition between equally important priorities, and primarily understands the arts as a way to shore up the loss of other key support. Despite this, the only recommendation our research indicates is: the arts need an urgent increase in core, public funding.

Standstill funding … is not enough. We need increased funding; inflation rises do not cover everything that has increased. We need more funding to cover the decrease in funds available from Trusts and Foundations, the increase in artist / freelancers fees and expense minimums, the cost of set builds for example. You can’t have the arts as part of ‘social prescribing’ and not fund it appropriately

NPO leader

Apart from a small Combined Authority grant we don’t receive any other regular grant funding and are entrepreneurial by nature. ACE’s NPO funding takes some pressure off us to recoup overhead costs from project contributions, often set by the client. This reduces the need to aggressively seek core income, or to slim down creative expenditure in order to create enough overhead income. It reduces the need for staff to overwork and deliver high targets against more static resources, and it helps the creative vision and ambition of the team to flourish. As this NPO funding reduces proportionally over time, those stresses become more exposed. I am confident that we are maximising our output and our income generation – we are intensely hard working and efficient and monitor this closely. Room for manoeuvre is minimal

NPO leader

As a target figure, NPO grants could be reinstated to the value they have lost to inflation and seek to stabilise NPO deficits to boost resilience. As noted above:

• ACE DCMS Grant-in-Aid funding has been depleted by £97m since 2016
• NPO cumulative deficits stood at £118m in 2023-24, an increase of £89m since 2015-16

Adding £100m in NPO funding to the current portfolio would have a number of positive knock-on effects which NPOs are ready and willing to deliver.

Safeguard employment for artists, especially those who face additional barriers to career entry and progression:

Our biggest single threat is diminishing audiences and the public’s ability to spend money on anything other than the household bare essentials. Our earned income is taking the biggest hit and, by diminishing our opportunities for artists, affecting their ability to continue their creative careers

NPO leader

The impact of standstill funding is negatively affecting our capacity to take talent to the next level and create opportunities for more people from diverse backgrounds to really develop their portfolio and gain more robust, longer term sector experience

NPO leader

Restore programming to audiences in the most need, positively impacting everyone:

Arts Council England funding is crucial to ensuring the arts in the UK continue to exist. We work with young people and audiences from backgrounds where they would find it difficult to, or just wouldn’t, access the arts. The arts are an essential part of every society and Government funding is crucial to keeping the arts alive and central to the well being, joy and humanity of the nation

NPO leader

It is incredibly difficult and uncertain working in the sector at the moment. The participants we support through free creative activity are experiencing challenges with mental health and wellbeing, poverty and limited access to services. The uncertain future landscape causes a lot of stress for staff within the organisation

NPO leader

Unlock more strategic and innovative business models in the publicly funded arts sector:

We’re always having to do more with less, which can of course lead to additional creativity of thinking and approach, but it feels that we are beyond this. We’re trying to maintain connections through the creative arts without sufficient resource to do so

NPO leader

We have been on standstill funding for many years. Most new NPO’s came into the current portfolio on three times the investment we receive. Yet we are an organisation which delivers excellence and has ambition. We’re chomping at the bit to take our ambitions forward: standstill is an issue but delay compounds it. We can work in new ways but at the core are staffing costs. There is a limit to the amount of delivery you can cut

NPO leader

We are a non-building based organisation, and we purposefully keep our overheads as low as possible. This means any additional income we generate can go directly into boosting activity. We work so hard to fundraise and earn income through commissions. But ultimately, there is little radical change we can make to our financial picture in the context of the current operating climate. We see so much potential in the creative relationships we have built with our communities and freelance practitioners. It is frustrating to have to continually cut our cloth smaller and smaller, rather than being able to see creative potential realised

NPO leader

Enable a period of stability after the COVID pandemic to allow arts leaders to pause, reflect, move forward and build a new foundation for their organisations:

We have felt stuck and in a constant state of firefighting since 2020. There has been zero let-up or time to rebuild, reposition or restore. Sector-wide, we are all burnt out. As leaders we must remain strong, ‘on the ball’ and innovative, keep our teams energised, empowered and confident, while we put out fires on a daily basis and seek out new ways to earn income to keep the doors open. It is exhausting and unsustainable

NPO leader

NPOs who have been in the portfolio for longer have faced the biggest real-terms cuts, and should be prioritised for reinstatement.

For our core activity we are still at 2012 levels, with no increase for core activity. We received an uplift [in the 2023 round] but this was for a specific new part of our work, whereas new organisations that deliver much less than we do came into the portfolio sometimes at more than 2x what we get. Historic underfunding … needs to be addressed

NPO leader

But the energy and money it takes to make different art forms, regions, and organisations compete for funding they all need is a zero-sum game, as is competition with other government departments and necessities for a functioning, healthy society.

Arts and culture are expected to plug the gaps in educational, social and health provision, but we are not trained for those specialisms. However, we can offer a high quality complement to statutory services

NPO leader

One respondent put it succinctly:

We are grateful for public funding and appreciate that there are choices to be made. But there is vast wealth in our country and globally. Tax the rich, distribute wealth equitably: we could all eat, be healthy, warm, educated AND enjoy first class arts and culture. Government needs to be the leading loudest voice resisting the creation of more billionaires and the increasing poverty and vulnerability at the other end of the scale. … Fund ALL the essentials, including arts and culture. Fund creative education for early years, primary and secondary. Create the artists of the future and pay the artists of the present, or the arts will die and we will all be poorer for it

NPO leader

Campaigns and news

While working on this report we have encountered a number of campaigns to support artists, arts funding and ACE, and list some here. Add to this list by emailing Russell Martin, director of Artquest. We also include a list of recent news reports on ACE NPOs for reference, and will update this in the coming weeks while our report is active.

Campaigns

• Unite: Fair Funding for local councils, vital for arts funding across England
• Tax Relief for Choirs: Making Music and other music sector organisations are calling for the eligibility criteria for Orchestra Tax Relief to be changed so choirs can also benefit.
• Various campaigns around the Government consultation entitled: Pathways to Work: Reforming Benefits and Support to Get Britain Working (consultation closes 30 June 2025)
  • Open Letter to Lisa Nandy (current Culture Secretary) and Liz Kendall (Department for Work and Pensions) on proposals: “Proposals in the “Pathways to Work” Green Paper will reverse decades of progress in the cultural sector.” Covers changes proposed to Access to Work, covering costs for disabled workers to remain in work.
  • Excellent and comprehensive overview of changes and actions we can take on Disability Arts Online.
  • Decode Data report on the realities of Access to Work in 2024-25
  • Statement from Graeae: We Are Working – Allow Us To Continue
  • Statement from Touretteshero: As of today, I’ll no longer be able to do my job as co-artistic director of Touretteshero: solely due to a recent decision made by Access to Work about my support.
• CVAN: Act Now: Write to Your MP to Protect the Future of the Visual Arts – covering a call to protect Grant-in-Aid for ACE, oppose cuts to disability benefits and protect copyright in the age of AI

News

• Arts Professional: String of arts organisations take action to stave off closure (19 May 2025)
• North East Cultural Freelancers: An open letter on the future of Arts funding in England (16 May 2025)
• Arts Professional: Halifax theatre leaves National Portfolio following ACE funding withdrawal (13 May 2025)

Crisis management is the norm. Organisations are doing just about enough to keep going in the short-term. … A more active, interventionist state and leadership is required and real strategic planning as to the needs of audiences and place

NPO leader

Future research

We are working on further research from our NPO leader survey including on:

Socio-economic background of NPO leaders and artists. Socio-economic background has been a driving focus of our work since 2017, tracked via the Applied partnership, and this report will synthesise data from our survey and existing data.

A major concern is the decreasing number of working class young artists being able to survive as practitioners largely due to the cost of housing

NPO leader

On the recent ACE interest in social mobility. My background is something I have hidden in the art world, it has not served me in the past to be open about my upbringing. I have found it refreshing recently to speak more freely about where I am from. My working class background as an artist is completely at the core and success of the work we deliver, it’s who we are as an organisation, and it’s incredibly important in a working class place to be embedded and connected to the roots of the place

NPO leader

Capital funding. Many NPO leaders mention the extreme need for capital funding to address crumbling and underfunded cultural infrastructure, both for energy efficiency to tackle the climate crisis and supporting general maintenance. We will seek out any new insights from our work to add to recent research from Future Art Centres and Julie’s Bicycle, among others.

Ageing buildings and equipment are consuming more of our resources (money and time) to repair or replace, unbalancing the budget

NPO leader

It feels as though the arts is really at a make or break point – there has been under-investment in infrastructure. Without capital investment we will start to see buildings close

NPO leader

Unitary authorities and devolution. Recently announced changes through the English Devolution White Paper proposing to merge smaller district councils with local county councils to create larger unitary authorities have left some NPO leaders unclear of the impact on some of their funding.

All these problems are exacerbated by local authority funding drop-off. The forthcoming reorganisation of local authorities makes everything so unstable

NPO leader

Organisations are doing just about enough to keep going in the short-term whilst the public bodies undertake or undergo yet another review. ACE commission reports on organisations, they are reviewed themselves; local councils don’t plan for the long-term as many are now subject to transformation under local government reorganisation. Devolution emphasises place-based solutions but the establishment of new [unitary] authorities [will] take time to embed. In the meantime our town and city centres are facing declining economic activity as they transition from being retail led. Recovery is not uniform, parts of the Midlands and North are recovering very slowly

NPO leader

Funding reporting and Grantium. As noted above, this is the main issue NPO leaders tell us about their otherwise constructive and supportive relationship with ACE. Although the issues are well understood and ACE have promised change, Grantium in particular is noted as being inaccessible and complex and unreliable to use. ACE’s timeline to address these issues have repeatedly slipped. The sector published it’s own workarounds to Grantium for artists (and artists, and artists, and artists) and organisations looking to make applications, with a cottage industry of consultants offering support to make applications, with their fees further reducing the amount that artists receive. As Grantium is used for application and reporting, accessibility impacts disability-led NPOs to both apply and to report on their progress.

If you are interested in collaborating on future arts sector research, contact Artquest Director Russell Martin.