While we may be leaving the acute phase of the Covid-19 pandemic behind, the recovery of the cultural sector is not secured. The uncertainty created by the pandemic and changes associated with our exit from the European Union remains high. Future demand from audiences for cultural activity is still unclear, and competition for support from funders is intense: the Arts Council’s latest National Portfolio Organisation process was the most competitive ever and we could not support every deserving application. In addition to the ongoing impacts of Covid–19, cultural organisations have experienced supply chain issues and energy price raises which have caused surging inflation in their cost base. Wholesale energy prices have come down and there are some signs of more positive consumer sentiment, but overall inflation remains high and most economists expect output to fall in 2023.

This uncertainty has challenged the ambition and dynamism of the cultural sector and slowed progress on inclusivity and environmental responsibility. The past two years have exposed financial vulnerability in the sector, particularly of freelance creative and cultural practitioners. In addition, many cultural organisations feel the risk of programming adventurous work is very high. We recognise these challenges, and some of the compromises that may be necessary to navigate the way ahead. There are limits to the support funders like the Arts Council can offer the cultural sector, so part of the response to the current environment must be helping cultural organisations adapt to become ‘fit for the future’. Many of our cultural organisations have already reset their approach, developing new ways of working – and new approaches to creating and distributing art and other types of cultural content – and showing ambitions to embrace further changes. Other organisations, however, need to look again at their mission, methodology and their creative and cultural plans in order to flourish in the future.

The Arts Council will encourage organisations to become more entrepreneurial, to optimise income streams, and to develop philanthropic giving as well as new services and products that bring opportunities to our creative and cultural practitioners, and even greater benefits to their communities, as they recover.

Organisations will also need to develop more flexible and efficient business models, built around closer collaboration with organisations both within and outside the cultural sector, including shared services and joint research projects with, for example, health and social care providers, further and higher education, or the commercial creative industries.

Cultural businesses will need to consider who leads their organisations, what cultures they foster, and how they make decisions. For individuals, change will be about developing new skills, building resilience, and working in new ways to fulfil creative and cultural ambitions.

Through our consultation with the cultural sector on Let’s Create, we developed our four Investment Principles – Ambition & Quality, Dynamism, Environmental Responsibility, and Inclusivity & Relevance. We believe these are even more relevant now given the current environment.

These Investment Principles are intended to galvanise transformational change that will aid the growth of a ‘fit for the future’ sector. They describe what we believe ‘well-run’ cultural businesses need to look like to best serve the public, and we are seeking tangible evidence of commitment to – and successful application of – these principles across all our investment programmes. For our recent National Portfolio investment programme, organisations were asked to apply against our Investment Principles. We will expect every member of the new portfolio to embed these Investment Principles in the way they work, in order to progress and better contribute to the Outcomes in Let’s Create.

The Arts Council will promote the application of the Investment Principles not just with investment, but also through our advocacy and development role. This includes providing a wealth of materials on our Investment Principles Resource Hub which we have recently refreshed so that it better helps a diverse range of arts organisations, museums, libraries and individuals embrace and implement change. We want the resource hub to be an engaging space to learn, develop and share new ideas, and we will continue to evaluate how it is used and what content would be most useful over the coming year.

The way the four Investment Principles will be applied will vary depending on the size and structure of the organisation. Local authority-run services – such as libraries and museums – will need to apply the four Investment Principles in a different way from standalone cultural businesses. For individuals, we believe that they can be used to help develop their practice and build sustainable relationships across the cultural sector. For organisations who have recently joined our National Portfolio, the application of the Investment Principles will involve setting measurable targets at board level and tracking progress. And across the sector, including non-National Portfolio Organisations and individuals, development will be aided by 40 new Investment Principles Support Organisations, and by partners Julie’s Bicycle, Counting What Counts and PwC. Their role will be to support the sector to adopt the principles.

The leaders of our cultural organisations, museums and libraries – regardless of size – must be drivers of this change by working with their boards and oversight groups to champion the Investment Principles and scrutinise the progress they are making. To support the development of boards, we are launching a new Transforming Governance programme to build their capability to support change and grow organisations that attract and develop a wide range of talent. Who our leaders are, what skills and experience they have, and what decisions they take will have a significant impact on progress towards achieving a ‘fit for the future’ sector.

We will also support individuals by continuing to invest in leadership development and transformation. We will support a new generation of leaders from across the country, and from a range of backgrounds, to develop the capability and confidence needed to make change, to develop resilience, and to support the wellbeing of their workforces.

Throughout the pandemic, the Arts Council worked extensively with the government to help cultural organisations weather the worst of Covid–19. We will, over the next year, continue to support organisations and individuals to help them adjust to a new, more uncertain, working environment. Our Digital Culture Network (DCN) will continue to improve digital skills and data literacy across the cultural sector. We will continue to build our partnership with Google Arts & Culture and the Bloomberg Philanthropies’ Digital Accelerator Programme to help develop digital capacity and capability in the cultural sector.

We will continue to support and enhance the sector’s progress on environmental responsibility by partnering with Julie’s Bicycle to offer access to tools and resources that empower individuals and cultural organisations to better understand their environmental impact, and develop and take appropriate action around climate and the natural environment.

In relation to inclusivity and relevance, the pandemic has demonstrated a clear need for organisations to serve all our communities better, and provide access to high-quality relevant cultural experiences for people of all backgrounds – across geographies, across protected characteristics and across socio-economic backgrounds. The Arts Council’s new National Portfolio for the period 2023-26 is more representative of this country, with a significant increase in support for diverse led organisations. We recognise that there is further to go, particularly in supporting more disabled led companies.

We remain confident that by working together, we can build a ‘fit for the future’ cultural sector that is creatively ambitious, inclusive and relevant, better able to respond to the needs of our communities and committed to widening access. It will be more dynamic, confident in its use of data to inform and measure performance, and engaged in more sustained research and development, including in the use of new technologies, in order to adapt to new circumstances. We want it to be world-leading in the way it develops its environmental responsibility and reduces its carbon footprint.

‘Q1, 2, 3, 4’ –  This refers to the different quarters of a financial year

‘Date’ – This is the point when more information will become available. At that point we publish a link to that information under the relevant Action. 

‘2023/24’ Budget’– We only publish budgets in relation to programmes where there is an open application process. The published figure represents the amount of funding Arts Council England has allocated to this Action. This figure may not represent our full investment in an Action. Funding may have been allocated in previous years or may be planned in future years or may come from programmes that are separately budgeted (eg National Lottery Project Grants).