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Analysis: Arts council’s use of lottery money further erodes principle of additionality

- 10 January 2014

The-National-LotteryArts Council England is turning to the National Lottery to fill in gaps in its revenue funding after the government announced further cuts to all departments. In 2015/16 ACE’s grants to its revenue clients are to be cut by 2%.

But ACE intends to use £60m of lottery money to help its National Portfolio Organisations plan on a three year basis, even though the Treasury has only announced grants for 2015/16, and it will mean an informal breach of the rule against ‘additionality’, the use of lottery funding for statutory government funding responsibilities.

Previously ACE has used lottery money for capital projects, and for individual artists’ initiatives and community projects under the Grants for the Arts stream. The additionality rule was established in the 1993 National Lottery Act and strictly applied by the Major government, but the Labour government was later accused of bending the rule to use lottery proceeds destined for the arts and heritage to help fund the 2012 Olympics.

Meanwhile, as the application process for NPO funding opened on January 7 ‒ arts organisations have until March to apply ‒ ACE has warned that levels can only be guaranteed for one year. The 2015/16 NPO budget is £271m plus £60m from the lottery, and Grants for the Arts is to increase to £70m.

But ACE is to set out a three year investment plan, despite the non-commitment of government funding beyond 2016. ‘At the heart of this investment strategy,’ said ACE’s chief executive, Alan Davey, ‘is the desire to retain ambition, risk, excellence and reach in the arts and culture sector in the next three years.

‘We know that these remain austere times but together with partners we must continue to invest in a way that ensures a healthy cultural ecology all over the country. We must keep the sector resilient and ensure art and culture retain their central place in this country’s way of life, and continue to enhance the quality of life for all.’

The wider use of lottery money has been gradual, however, and has had government approval. In the last funding round ACE has funded touring and work with children from the lottery. Now, some organisations will be funded wholly from the lottery so that more organisations can be included than if there were only the government’s grant-in-aid available.

Some will see it as a pragmatic move to deal with conditions that had not been foreseen 21 years ago. Others will see it as a further compromising of the principle of the lottery profits being used for ‘good causes’ normally outside the government grants system.

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