In July 2020, the Department for Digital, Culture, Media &
Sport (the Department) announced its £1.57 billion Culture
Recovery Fund to help the UK's cultural, arts and heritage
institutions survive the pandemic. Of the £830 million grants and
loans funding awarded to the sector so far, £495 million has been
paid out.
The UK's museums, galleries, cinemas, music venues,
nightclubs, theatres, arts centres and heritage sites were
required by law to close their doors to visitors on 23 March 2020
when the UK entered the first national lockdown. Some were able
to reopen partially in the summer and autumn, but many have
remained entirely or mostly closed for nearly a year. Without
targeted support, the Department expected large scale financial
failures across the sector as organisations ran out of money
around the end of September 2020.
The Culture Recovery Fund (CRF) comprised a mixture of
revenue grants, repayable loans and capital grants, targeted at
different groups of
organisations.1 The
Department aimed to support the survival of 75% of the
organisations in the sector at risk during 2020-21. To determine
how much money would be available, the Department considered
various scenarios. Its worst-case scenario assumed that social
distancing would remain until the end of March 2021 and that
demand would remain at 40% of pre-COVID-19 levels. The current
situation exceeds this worst-case scenario.
From the £1.57 billion of overall funding, the Department
gave responsibility for awarding £1 billion to four arm's-length
bodies (ALBs) in a first phase of funding (which invited
applications up to end of November 2020): Arts Council England
(ACE), Historic England (HE), the National Lottery Heritage Fund
(NLHF) and the British Film Institute (BFI). The ALBs ran their
own, mostly separate, competitions to award funding.
The criteria for awarding funding included that
organisations were financially viable before COVID-19; had
exhausted all other funding options; were ‘culturally
significant'; or were essential to the cultural fabric of a place
or supported the government's wider ‘levelling-up' agenda.
By 19 February 2021, the ALBs had awarded £830 million of
the £1 billion funding, with £495 million paid out to recipients.
The ALBs have until the end of March 2021 to award all funding
although these can mostly be distributed and used by recipients
beyond March 2021. Applications for both revenue and capital
grants were oversubscribed in the first funding phase. Loans
funding was undersubscribed.
The ALBs awarded funding to a diverse range of
organisations. By December 2020, 85% of revenue grants had been
awarded to the arts and 15% to heritage organisations. London
received 31% of total funding, followed by the North West and
South East which each received 12%.
The Department has not yet paid out any funding from its
second phase of funding, totalling £400 million, which it
announced in December 2020, with decisions scheduled to be made
in March 2021. This comprises funding not awarded in the first
funding phase plus £258 million that it held back as
contingency.
In common with other emergency COVID-19 funding,
implementing the CRF has presented risks of fraud, error,
duplication and overpayment, which the Department recognised from
the outset. To minimise these risks the Department required ALBs
to perform fraud risk assessments on applications and post-award
checks. The Department also created the Culture Recovery Board in
July 2020 to provide assurance to the Secretary of State over
funding and approve loans over £3 million. By January 2021, three
reports of fraud relating to two grants administered by ACE had
been received through the COVID Fraud Hotline. The grants,
totalling £473,00 were withheld by ACE and no funds were paid
out.
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Notes for Editors
- The Department's July 2020 announcement
covered five main funding areas: £880 million (56% of the total)
in revenue grants; £270 million (17%) in repayable loans; £120
million (8%) in capital grants; £100 million (6%) extra
grant-in-aid for English cultural heritage organisations and
English Heritage; and £188 million (12%) in grants for devolved
administrations.
