4th August 2020
The Culture Recovery Fund grants programme, announced by the Arts Council last week, is indeed a much needed boost to the recovery plans for many arts organisations hit hard by current events. There are two rounds of funding: the first round of applications opens at 12nn on Monday 10 August and closes on 21 August at 12nn, and the second round opens at 4pm on 21 August, with a close date of 12nn on Friday 4 September.
Speed is of the essence for the Culture Recovery Fund applications: the total fund available is up to £500m, but the Arts Council has already indicated that it expects to distribute 75% of the fund in round one, so you only have this week to put in your applications.
The fund is set up to provide grants of between £50k to £3m for those organisations affected by the COVID-19 crisis. It is specifically aimed at those organisations who, without such funding, would not stay afloat, providing them with support over a six month period with the ultimate aim being that they are self sufficient from 31 March 2021.
What seemed like a fund available to all to help quell the downturn, in reality is considerably narrower. For those organisations that may have some reserves, it looks at first glance like they will be expected to exhaust these first before they are able to utilise the grant fund.
For those organisations that do have funds currently, but will likely to run out of reserves before 31 March 2021, you would hope that this fund is still available to you. It is now critical that you are able to forecast cashflow and budget for the period through to 31 March 2021 to evidence your need for such funding, as this will be an essential part of your application.
As part of the same announcement, the Arts Council has also indicated a separate loan fund, details of which are to follow. This fund will make repayable loans where organisations require more than £3m. The loans will be for up to 20 years with a four-year repayment holiday and interest rate of 2%, but organisations cannot apply to both funds, so it is wise to consider carefully which is better suited to your organisation.
As an alternative, the National Lottery Project Grant Fund remains open: there are no deadlines for the £60m fund, and the grants will be available available until March 2021.
Whilst these options provide much needed assistance, for those organisations that require these funds to stay in existence until March 2021, a note of caution that this may not be enough to sign off current year accounts; going concern assessments require evidence of your ability to operate as a going concern for twelve months to be assessed.
What might prove more useful is the Arts Council’s recent announcement to extend NPO and CPP funding for an additional year. Each organisation will have to carefully assess the post-March 2021 period, ensure they have robust business models and have them stress tested before they will be able to sign off the 2020 accounts with a standard audit report. Speak to your advisors as soon as you can in order to assess your specific circumstances as their may be other options to consider – extending your year end to give you more time may be a key tool at this time.