Colchester-based gallery Firstsite has had its proposed 2015-18 funding agreement withdrawn by Arts Council England (ACE) over “serious concerns” about the venue’s sustainability over the three-year term.

The organisation will be placed under special one-year funding arrangement and will lose its National Portfolio (NPO) status.

The announcement was made alongside news that English National Opera (ENO) is also to have its NPO status withdrawn – it will be offered a special two-year funding arrangement.

The new agreement with Firstsite gives the organisation £814,517 for 2015-16 – a slight reduction on its original funding offer – alongside as yet confirmed transition funding to enable it to operate and restructure.

ACE says the decision was taken following a consultation period with key local stakeholders and funding partners, revised financial accounts from Firstsite and an independent analysis of the organisation. The organisation moved to its current purpose built home in 2011, a 3,200 square metre development costing £29m.

Value for money

Speaking about the decision, Althea Efunshile, ACE’s acting chief executive, said: “Arts Council’s role is to ensure that we get the best value for the taxpayer’s money by investing in well run companies who delight audiences with brilliant work. With the very occasional exception, all the organisations we fund do just that.

“No one is doubting that ENO is capable of extraordinary artistic work but we have serious concerns about their governance and business model and we expect them to improve or they could face the removal of our funding. The challenges are similar for Firstsite.

“However, we believe these organisations can inspire audiences long into the future and it is our hope and expectation that this happens.”

ACE will take decisions on the future funding of both organisations following the implementation of the special arrangements.

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Matthew Rowe appointed Director of firstsite Colchester