UK: Economy and the arts
British government debt officially stood at £950.4 billion, repres-
enting 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 less-
developed and emerging econom-
ies, 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
orted by the ONS to have come in at £159.2 billion. Interest pay-
ments on these debts are curr-
ently 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 immed-
iately. 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, represent-
ing 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 per-
centage 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 imposs-
ibility 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 comment-
ators, this will only be the beginning of the ACE’s problems, with speculation the government
will slash up to a further 20 per-
cent from funding later this year after the CSR.
And a crisis of direct funding is not the end of the ACE’s woes. Local authorities, which
ribute significantly to grass roots arts organisations, are being