Creative Scotland uses reserves to maintain arts funding levels

Creative Scotland has said it will go into its reserves to maintain current levels of financial support for arts and culture organisations after the Scottish Government announced plans to cut its funding by £7m.

Following a meeting of Creative Scotland's board to discuss the situation, the organisation said that while it fully appreciates the challenging context in which the Scottish Government is in, it is "extremely disappointed by the settlement" – which equates to a 10% funding cut.

It said the move comes "at a time of significant pressures for cultural organisations due to the impact of the pandemic, rising inflation, falling income and spiralling operating costs", adding that the value of culture and creativity to people's lives has "never been more important". 

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In light of the situation, Creative Scotland's board agreed to use some of its National Lottery reserves to maintain funding for Regularly Funded Organisations (RFOs) at 2022/23 levels into the 2023/24 financial year.

"National Lottery reserves are finite and therefore can only be a time-limited solution to address Scottish Government budget reductions in 2023/24," a statement issued by Creative Scotland said.

"As the Scottish Government budget does not give any indication of funding for 2024/25 and beyond, we cannot confirm RFO funding levels for 2024/25.  

"Creative Scotland will continue to act responsibly and pragmatically, however, if Scottish Government cuts continue beyond 2023/24, Creative Scotland will require to pass those on to the sector. 

It added that all other 2023/24 budget areas will be reviewed and published in its 2023/24 Annual Plan scheduled for Spring 2023. 

Creative Scotland's decision comes two months after it warned it is likely to have to cut the funding it provides to arts and culture organisations, suggesting that it may have to cut back the number of organisations it provides long-term funding to in the future.

And last month it announced a further delay to the introduction of its new Future Funding Framework, which is intended to replace its current funding approach for organisations.

Announcing the decision, it blamed financial challenges facing arts organisations, uncertainty around the funding it will get from the Scottish Government and "the realistic prospect of serious budget reductions" for the delay.

April 2025 is the current date given for new arrangements being in place.