English National Opera is to have its regular public funding cut by £5m a year, one of the highest-profile losers in a high-stakes day of funding announcements which saw hundreds of arts organisations told of their settlements for the next three years.
It was one of the most important days in the arts calendar as England's theatres, opera and dance companies, orchestras, galleries and museums heard how much Arts Council England would be giving them from 2015 to 2018.
The ENO, one of the five biggest recipients of Arts Council cash, had been preparing for the cut and was not surprised to hear it will have to survive on 29% less money from the council. Its annual funding from the organisation will drop from £17m to £12m.
Other casualties included the Orange Tree theatre in Richmond, west London, the Luton-based UK Centre for Carnival Arts, and the Leeds-based Red Ladder theatre company – just three of the 58 organisations losing their place on the national portfolio. They will lose regular public funding, but will still be able to apply for one-off grants.
For most arts organisations the news was good, or at least bearable. Thanks to an injection of lottery money and a fall in cash for capital and philanthropy projects, the council said it was able to give standstill funding to three quarters of those arts organisations already receiving money.
It also slightly increased the amount of national portfolio cash being given to arts organisations outside London, from 51% to 53%.
The ENO has been on an artistic high, but has struggled to meet box office targets. John Berry, the ENO's artistic director, said: "We have been working for some time with the arts council to develop a new business plan which recognises the challenging funding climate and reduces the cost to the public purse, while also enabling us to create an exciting and sustainable future for ENO and maintain our artistic quality, ambition and reach, nationally and internationally."
The arts council had initially suggested a reduced schedule of performances, something ENO balked at. Instead it came up with an alternative plan which includes generating more money from the cafes and bars at the Coliseum, developing West End musicals and creating a single base for rehearsals, potentially outside London.
Alan Davey, chief executive of Arts Council England (ACE), said there had been no ultimatums. "Whatever happens, the plan which they follow has to be theirs, they have to believe in it and they have to want to do it. It was clear to both parties that the current business model is under strain in many directions and something had to be done."
The decision followed a best-value investment analysis of the big seven opera and ballet companies, who account for 22% of national portfolio funding.
The ENO pill was sugared with a one-off payment – to help in the transition of its business model – of £7.6m.
The drop in funding for the ENO is clearly a significant blow as 48% of its income comes from the public purse, the remainder being box office and private donations. The company stressed that with the transition money the actual reduction in money would be closer to 13% and in line with what it had applied for.
The chairman of ACE, Sir Peter Bazalgette, was not able to discuss or be a part of the ENO decisions because he was chairman of ENO until the end of last year.
Bazalgette said England was in the creative premier league "and this portfolio would keep us on top in an era of tight funding".
The national portfolio, organisations who all receive regular funding, is being reduced from 696 to 670. Among the 42 new entrants are Matthew Bourne's Brighton-based dance company New Adventures and Re: Bourne, which will receive £1.3m, as well as two theatres which lost out in the last round three years ago – the Northcott in Exeter, and Derby theatre, formerly the Derby Playhouse.
The 58 organisations leaving the portfolio included the Orange Tree theatre in Richmond, whose new artistic director, Paul Miller, only started in the job on Tuesday. He was philosophical about the news: "The email came at 8.30am, not the best way to start your first day. In fact I've been looking at the situation for the last six months, both here and nationally, and it seemed clear this scenario was at least a possibility. Change has to happen … something has to give and today we were one of those people."
He said the decision would not close the theatre: "There's no reason why we can't continue to do terrific things." The ACE money represents 24% of its income and Miller acknowledged "we have to do a hefty bit of financial remodelling" which will involve an attempt to raise more private money.
In Salford, the Lowry Centre was given a 21% cut in regular money but was also able to announce it had reached its £5m capital funding target with £3m from ACE and its largest ever private donation of £1m from keen Lowry collectors Andrew and Zoe Law, who will have the main gallery spaces named after them.
The centre's chief executive, Julia Fawcett, said ACE had, in discussions over a long period of time, "clearly signalled that they do not prioritise permanent single artist collections".
In Leeds, the Red Ladder radical theatre company had its funding cut from £162,000 to zero. Its artistic director, Rod Dixon, said: "We are bitterly, bitterly disappointed – but this is not the end. We put in what we believed was a hugely exciting programme of work to 2018, and it is disappointing to know that those plans will not now come to fruition, at least not in the form we envisaged.
"What we do know is that we cannot and will not see this decision as a vote of no confidence, and that we will find a way to continue through our own passion and dedication to making theatre that represents the dispossessed, tells stories of the injustices of our world and changes lives."
Other organisations leaving the portfolio include the Theatre Royal Bury St Edmunds, Northumberland-based Theatre Sans Frontieres, the Academy of Ancient Music and the Wordsworth Trust in the Lake District.
Davey stressed that they would work to find other ways of helping those dropped from the portfolio and announced an increase in the smaller grants for the arts budget from £63m to £70m.
Most of the big companies had been braced for a cut. The National Theatre and Royal Shakespeare Company will receive a cut of 6.7%, while for the Royal Opera House that figure is 6.2%. The Royal Opera House, which receives the largest amount, an annual £25m, has taken a 2.2% cut.
The overall national portfolio budget is not dramatically different: £339.5m in 2015/16 compared with £341.4m in 2014/15. That is largely due to a better than expected comprehensive review settlement and a big increase in lottery money. Without those factors, Bazalgette said, ACE faced having money for only 250 organisations.
Some things had to go. There will be limited money for capital investment and there will be no money for large Catalyst endowment grants, a scheme intended to encourage philanthropy.
In terms of money by art form, dance was the biggest winner. It will receive 9.4% more money, while music goes down 4.3%, visual arts down 2.6% and theatre down 0.4%.
ACE is also now responsible for museums, replacing the Museums, Libraries and Archives Council and announced new funding arrangements for museums in Penzance, Sheffield, Hull, Derby, the Black Country and Penlee House.
