Hundreds of millions of pounds yet to be paid out from Culture Recovery Fund, NAO finds

The £1.6bn grant and loan fund was set up last year to help arts and culture organisations weather the coronavirus pandemic

The National Audit Office
The National Audit Office

Hundreds of millions of pounds in grant funding and loans has still not been awarded from the government's £1.6bn Culture Recovery Fund, according to the National Audit Office.

Of the £830m grants and loans funding allocated to the heritage and arts sectors so far, only £495m has been paid out, according to a new report by the government's spending watchdog.

The fund was announced by culture secretary Oliver Dowden in August. It is intended to help “culturally significant” organisations recover from the effects of the Covid-19 pandemic.

The funding has been released in tranches, and £1bn was given to several arm's length bodies, including the National Lottery Heritage Fund and Historic England, to be distributed on behalf of the Department for Digital, Culture, Media & Sport.

But DCMS has still not paid out from its second phase of funding, totalling £400m, which it announced in December, with decisions scheduled to be made this month.

This comprises funding not awarded in the first funding phase, plus £258m that it held back as a contingency, according to the NAO.

DCMS aimed to support the survival of 75 per cent of at-risk organisations in 2020/21.

It considered a range of scenarios when determining how much money would be made available.

Its worst-case scenario assumed that social distancing would remain until the end of March this year and that demand would remain at 40 per cent of pre-Covid-19 levels.

The NAO report notes that the current situation exceeds this worst-case scenario.

The last, £300m round of funding was announced in January, when up to £3m was made available to heritage organisations.

An earlier funding pot of £92m had been announced in August.

The arm's-length bodies have until the end of this month to award the rest of the funding, although most can be distributed and used by recipients beyond that date.

A total of 85 per cent of grants awarded by ALBs has gone to the arts, with the rest going to heritage organisations.

The NAO reports that applications for both revenue and capital grants were oversubscribed in the first funding phase, while loan funding was undersubscribed.

In addition, the spending watchdog found three reports of fraud relating to two grants administered by Arts Council England totalling £473,000.

But the grants were withheld and no money was paid out following calls to the Covid-19 Fraud Hotline, the NAO said.

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