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UK: Economy and the arts

British government debt officially stood at £950.4 billion, representing a debt-to-GDP ratio of 68.1 percent, according to data released at the end of March by the UK Office for National Statistics (ONS). According to International Monetary Fund (IMF) data, this level of debt will rise to around 90 percent of GDP by 2014, which would significantly exceed that of many lessdeveloped and emerging economies, such as those of Argentina, Brazil, China, India, Indonesia, Mexico and Russia.

In the immediate term, the UK government’s budget deficit for the calendar year 2009 was reported by the ONS to have come in at £159.2 billion. Interest payments on these debts are currently around £42 billion annually.

The dire state of UK public finances has driven the new Conservative–Liberal Democrat coalition government – formed as a result of controversial elections in May – to impose extensive cost cutting in an emergency budget, delivered 22 June. The cuts will see government reduce spending by an initial £6.2 billion across all departments, effective immediately. A Comprehensive Spending Review (CSR) in the autumn is expected to

usher in far more radical austerity measures.

Total cuts to the Department for Culture, Media and Sport (DCMS) in the emergency budget amount to £88 million, representing a reduction of 3 percent for all bodies funded by the DCMS, except for Arts Council England (ACE) – the national development agency for the arts in England – which will have 4 percent cut from its budget. The council is being asked to fund the shortfall from its own reserves.

In a press release dated 24 May, ACE chair Dame Liz Forgan said: “We do not understand why we have received a higher percentage cut than other DCMS funded bodies. Making cuts within the financial year is very difficult… The Arts Council has already trimmed its own budgets by £4 million in 2010/11 so this takes our total reduction this year to £23 million”.

Forgan pointed out the impossibility of meeting such a cut from running costs, which consume a relatively economical 5 percent of the ACE’s overall grant-in-aid budget and amounting to £23 million – exactly the sum being cut from its budget.

According to arts commentators, this will only be the beginning of the ACE’s problems, with speculation the government will slash up to a further 20

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