Our decision-making was in two distinct stages. The first stage was an assessment of the application itself, looking at organisations and their ability to deliver the programme of work that they proposed. The second stage was about balancing the overall national portfolio of funded organisations that we want to support to achieve our goals and priorities.

For more details of how we made our decisions, see section two of the Guidance notes.

Stage one: assessing the application itself

The first stage looked at individual applications on their own merits and assessed them against the three stated criteria: contributing to our goals and priorities, governance, leadership and management and financial sustainability. At this point, the stage one word scores were given against each of the three criteria and a recommendation was made of whether or not the application met stage one criteria overall.

The stage one assessment was managed by an Arts Council member of staff, usually a relationship manager, drawing on a range of information and views and supported by the relevant senior management team. 

First stage assessment criteria:

1. Contributing to our goals and priorities: we made an assessment of which of our goals and priorities organisations would contribute to and the quality of that contribution.

Organisations had to demonstrate that they would contribute to at least two of our goals. Organisations which would contribute to more of our goals and priorities were not necessarily treated more favourably than applications from specialist organisations which would contribute to fewer. Our assessment took into account the nature of each organisation and the amount of funding applied for.

2. Governance, leadership and management: organisations needed to have appropriate governance, leadership and management to be able to deliver effectively the programme of work that they proposed. Organisations were asked to confirm that their application was supported by the governing body of their organisation.

3. Financial sustainability: organisations needed to be financially sustainable and have appropriate financial controls in place to be able to deliver effectively the programme of work that they proposed.

We considered how organisations had planned their income and expenditure for this funding period alongside their management accounts for 2010/11. Value for money was an important consideration.

Where it was appropriate, we also took into account the extent and strength of support from other partners, such as local authorities.

We understood that some organisations that do not currently receive regular funding from the Arts Council may have found it more difficult to meet this criteria, particularly in terms of financial sustainability. We took that into account in our assessment and made a judgment about each organisation's potential to meet this criteria within an agreed timeframe.

All applications then went on to stage two.

Stage two: balancing the portfolio

The second stage made a judgement about how well an organisation would fit into a balanced portfolio of funded organisations. This looked at a range of areas where we needed to find a balance across our investment in the arts: goals and priorities, diversity, range of artforms, size and type and geographical spread. There was no mechanistic formula for balancing the portfolio - this was a framework against which informed judgements were made.

This stage was undertaken by staff working at regional, area and national level, and culminated in a recommendation to the relevant Regional Council (which took decisions on applications under £800,000) and to the Arts Council's National Council (which took decisions on applications above £800,000). 

Areas where we needed to find a balance across our investment in the arts:

1. Goals and priorities: we looked across the national portfolio of organisations and considered how it is contributing to our goals and priorities as a whole, as set out in Section three, alongside our other investment in the arts.

2. Diversity: we want our investment in the arts overall to create the conditions in which a diverse range of great art is open to all.

3. Range of artforms: we want to support a range of artforms and a range of artistic practice. Artists and arts organisations often work across and between different artform areas. We group the organisations we fund, however, into six artfrom areas in order to help us consider how we are investing in different parts of the arts sector. These are: combined arts (which use multiple artforms to achieve their aims), dance, literature, music, theatre and visual arts.

4. Size and type: there are many interdependencies within the arts sector and we want to invest in an appropriate mix of sizes and types of organisation. This includes, for example, considering an appropriate balance of building-based companies, touring companies, arts venues and other types of organisations. Some of the organisations we will support may not directly produce or present art but may play a role in supporting arts organisations.

5. Geographical spread: we took into account the need to support work by a national portfolio of funded organisations across the whole of England. We kept in mind the fact that some organisations work intensively within their home region, some have a reach and impact far beyond their home region and some tour widely.