Earlier this year, one of those late-night kitchen conversations in our house mused on what difference it might make if Grayson Perry and Gareth Malone were in charge of the arts in this country. In fact Grayson Perry is to present this year’s Reith lectures, following in the footsteps of the likes of Richard Hoggart, JK Galbraith and Daniel Barenboim – a bold statement of the intellectual and imaginative significance of creative practice in today’s society, and one to which government needs to pay attention.

Of course neither are in charge and the harsh reality is that the Spending Review delivered a further 5% cut (£17million) to Arts Council England’s budget for 2015/16. This is on top of the 29.6% cut of the 2010 Spending Review and further 1% and 2% in-year cuts for 2012/13 and 2014/15 respectively. ACE has also undergone massive restructuring – the full effects of which on the health of the arts will only become evident over time.

Equally – if not more – worrying is the continuing erosion of money available to local authorities. Their 10% (£2.1 billion) cut meted out in the Spending Review, comes on top of 33% real terms cuts already made. The Local Government Association (LGA) Chair, Sir Merrick Cockell, commented: “This cut will stretch essential services to breaking point in many areas… some councils will simply not have enough money to meet all their statutory responsibilities.”

Culture and leisure are among the services he identifies as having to “bear the brunt.” Local authority budgets are unsustainable with a £14.4bn shortfall predicted by 2020 with, according to the latest LGA analysis, a “black hole” growing at a rate that is £100m a year more than this time last year. Cuts to non-core services could equal 46%.

No hiding place from cuts

There is no hiding from the potential severity, given recent figures extracted by the Labour Party which show that local government support contributes 56% of all government arts spending. Many local authorities, to quote Peter Heslip, ACE Director of Visual Arts, “do understand the vital role artists and arts organisations can play both in economic terms [and] in social terms” but the latter “are much harder to measure.” In being so, there is a tough case to make when up against the merits of quantifiable interventions in housing or social services.

The big question is how will the shrinking Arts Council cake be divided? Maria Miller has attached stringent guidelines to the settlement. The ‘best case scenario’ cut was won on the grounds of the arts contribution to economic growth and this is to be a priority, not as the seed bed for the creative industries, but through the visitor economy. ACE has already announced £3m funding for cultural destinations, enabling “organisations to increase their reach, engagement and resilience by working with the tourism sector.”

There is also to be a focus on the Olympic and Paralympic cultural legacy, international cultural exchange and no respite on increasing earned income. ACE itself is faced with another claw back on administration, plans for which need to be confirmed by October. All in all, fairly prescriptive and predictable.

London’s privileged status

Launching the Labour Party’s One Nation Arts last week, Harriet Harman, Shadow Secretary of State for Culture, cited the vast differential between funding for the arts in London and elsewhere. In 2010-11, more than two thirds of all philanthropic donations went to organisations in London at £59.52 per head of population. The North East comes a laggard second with £4.66 per head. This astonishing difference is partly fueled by the majority of Government arts funding also going to London-based organisations. Of the current 696 NPOs, five mop up nearly 25% of the funding at some £95m with only one of these, the Royal Shakespeare Company, being based outside London.

Nicholas Hytner, Director of the National Theatre, recently commented that the cuts “are not a disaster for [the Nationals] whose privileged status and ability to raise private funds shelter them, but for the majority of other orchestras, galleries and theatres, especially those outside London.” Donna Lynas, Director of Wysing Arts, notes: “The potential for everything coming to a grinding halt is very real… to continue to meet overhead costs associated with running buildings, already stretched commissioning budgets may shrink even further.”

If the National companies represent one sacred cow, the ‘additionality’ status of Lottery funding is another. John Whittingdale, Chair, Culture Media and Sport Select Committee, has hinted that the Government might move temporarily towards greater flexibility in use of Lottery funds. This is a slippery slope and riven with ethical concerns, but one the Arts Council has already begun to explore.

As Lynas suggests, somewhere in this maelstrom of stretching budgets and realigning boundaries, we may need “to re-think what it is we value most and make sure that it is protected, and resourced.”