English National Opera will be removed from Arts Council England’s national portfolio funding programme for the next three years and will instead be placed under special funding arrangements because of serious concerns about its governance and business model, the grant-maker has said.
The firstsite gallery in Colchester, Essex, has also been refused national portfolio status for similar reasons.
The decision means that instead of being part of the national portfolio, which consists of 668 arts organisation that will receive a share of £340m of Arts Council funding each year between 2015 and 2018, the two organisations will have to meet a series of conditions in order to receive grants.
If successful, ENO will receive £12.4m in revenue funding each year for two years and £6.1m in transition funding to help it make changes to its business model.
ENO was informed last summer that its funding would fall by £5m a year, from £17.2m, in the 2015-18 funding round. The ENO and firstsite were originally part of the national portfolio list announced in July last year – all those included have to produce satisfactory business plans before final funding is agreed. The final list will be published at the end of March.
The Arts Council said it had identified significant risks with ENO’s proposed business plan, despite the charity having worked hard to address the problems the Arts Council highlighted in its analysis of opera and ballet in 2013.
In that analysis, it told ENO that it needed to radically change its business model to address falling box office numbers and achieve greater stability.
In a statement published today, the grant-maker also noted that there had been uncertainty about ENO’s senior leadership team.
The charity’s chair, Martyn Rose, and executive director, Henriette Götz, both announced in January that they would be leaving the charity this month.
"No one is doubting that ENO is capable of extraordinary artistic work, but we have serious concerns about their governance and business model and we expect them to improve or they could face the removal of our funding," said a statement from Althea Efunshile, acting chief executive of Arts Council England.
A spokeswoman for the Arts Council said that ENO had been told it must recruit a director capable of developing a new business model, strengthen its financial operations and recruit a permanent chair. She said the grant-maker would monitor the charity’s income and expenditure on a monthly basis, as well as looking at its audience figures and progress at recruiting a new chair and chief executive.
A spokesman for ENO told Third Sector: "The Arts Council has been working with us on its concerns about our business model for some time now. It wants us to demonstrate the robustness of our plans to change this model, which we announced last April, and this is why it has granted us exactly what we’ve asked for, although they’ve given us funding for two years rather than three.
"We also need to improve governance in the organisation. We are going to press ahead with appointing a new chief executive."
Matthew Rowe, director of the firstsite gallery, which will receive £814,517 plus transition funding for one year from the Arts Council, said in a statement: "Firstsite acknowledges the need for rigorous milestones to be set and welcomes the opportunity to demonstrate the changes that will successfully deliver these targets during our transitional period."