A long-awaited shake-up of the funding landscape has been put off for at least 12 months to try to help stabilise the country’s cultural sector after Creative Scotland said it was “not reasonable” to expect them to have to re-apply for funding in the current climate.
The overhaul has been postponed weeks after the quango warned the Scottish Parliament of a gathering “perfect storm”, which could see one in four companies facing insolvency within months.
The move has emerged despite Arts Council England announcing a huge overhaul of its own long-term funding programmes, which have given companies clarity until March 2026.
Creative Scotland has admitted it is “not able to confidently roll out” new funding programmes for the next few years after being kept in the dark over its future budgets from the Scottish Government.
Its decision leaves venues, companies and events facing the prospect of having to survive on “standstill funding” until the start of the 2025/26 financial year.
More than £30 million a year is shared between 121 different organisations, including the Eden Court, DCA and Macrobert arts centres in Inverness, Dundee and Stirling respectively, Horsecross, which runs both Perth Theatre and Perth Concert Hall, Glasgow’s Celtic Connections festival, the Edinburgh International Festival and the Wigtown Book Festival.
Theatres supported through the Regularly Funded Organisations (RFO) pot include Cumbernauld, Dundee Rep, the Royal Lyceum and Traverse in Edinburgh, Pitlochry Festival Theatre in Perthshire and the Tron in Glasgow.
Creative Scotland told MSPs last month that continuing with standstill funding arrangements was the equivalent of increasing year-on-year cuts due to rising costs across the board. It also described the funding system as “increasingly unviable”.
In its latest announcement, Creative Scotland said it was having to grapple with uncertainties and the “realistic prospect” of Government cuts “for this year, next year and beyond”.
It has suggested it has a duty to “act responsibility” by taking into account the “enormous pressure” on arts organisations grappling with lower audiences post-Covid restrictions, rising energy bills and inflation, and the impact of the cost-of living crisis.
The organisation is hoping to spell out in the next few months how to offer additional support via National Lottery funding for some organisations that have had standstill funding for years. This is expected to be targeted at building-based organisations facing the biggest financial challenges over their energy bills
Creative Scotland has a budget of nearly £100 million a year, around a third of which comes from the National Lottery.
It has raised alarm by warning that “significant” cuts in its support from the Scottish Government are “likely” to be imposed – depute the quango’s core funding representing 0.1 per cent of the overall budget, with culture’s total share representing 0.8 per cent.
The Government signalled in May that overall spending on culture and events was expected to be cut from £177m to £173m next year.
However, Creative Scotland is not expected to have clarity on its finances until mid-next month, when the Government is due to set its budget.
A spokesman from Creative Scotland said: “We are postponing the implementation of our new multi-year funding approach due to the current uncertainty over the budgets that will be available to us next year and beyond.
"Given the significant pressure that cultural organisations are under in terms of spiralling operational costs, rising inflation and continued pressure on audiences, it would not be reasonable to expect those same organisations to go through such an application process at this time.
“In the meantime, we aim to maintain existing funding levels for all regularly funded organisations, while also launching a re-designed open fund for organisations and looking at other ways of offering supplementary support.”
A shake-up of its long-term funding programmes is long overdue after being promised in the wake of huge controversy over its last round, announced in 2018. Several decisions were overturned following an intervention from the Government in response to protests from organisations which lost all their funding.
However, efforts to open up long-term funding programmes to new applicants were delayed by the impact of the pandemic on the cultural sector.
This time last year Creative Scotland was aiming to have new funding deals in place by the spring of 2023. However, further delays were caused by a new wave of Covid restrictions in December and the huge challenges cultural organisations have faced in recent months.
The new announcement from Creative Scotland states: “Scotland’s culture and creative sector is facing significant challenges brought on by long-term budget pressures, increased operating costs, slow post-Covid recovery and falling income.
“Alongside these challenges, uncertainties continue around Creative Scotland’s budgets from the Scottish Government for this year, next year and beyond, with the realistic prospect of serious budget reductions.
"It is clear that change in the sector will be required to ensure that the worst effects of the current challenges can be managed and to help shape a more confident future.
“Put simply, we are not able to confidently roll out a new multi-year funding approach and ask organisations to devote significant time and effort in applying, when we don’t have sufficient clarity or confidence in our future budgets.
“We need to act responsibly in such a complex and uncertain environment, particularly when cultural and creative organisations are under such enormous pressure on many fronts.
“With this in mind, we have looked again at the options open to us to sustain a meaningful funding offer and keep moving forward with our plans wherever possible, whilst revising and adapting these plans and delivery timescales to face the challenges of the current environment and the change required.”