Creative Scotland has warned 2,000 jobs could be at risk after it had to use its reserves as a “one off” to cope when the Scottish Government imposed a last-minute £6.6 million budget cut.
Back in December 2022 the government said they may have to cut £6.6m from their funding to Creative Scotland in 2023/24, before ministers U-turned on this in March 2023.
However Culture Secretary Angus Robertson has now U-turned again to impose the cut, forcing the arts body to dip into its reserves to plug the black hole and make it to the end of the current financial year.
Its chief executive Iain Munro told a Holyrood committee that because the cut is coming halfway through the financial year, it would have translated to a 40 per cent cash reduction on the organisations it regularly funds.
Creative Scotland makes four payments a year to these organisations, and the next payment is due in just a fortnight.
He told MSPs: “In recognition of the devastation that would result from handing on a 40 per cent cut in two weeks’ time, we have acted swiftly and agreed as a one-off to utilise £6.6m of our National Lottery reserves to offset that reduction.
“But that is a one-off - reserves by their nature can only be used once.”
He added that while this cash “stabilises” the situation until the end of the financial year, if this £6.6m cut happens again in the 2024/25 budget they will have “no option” but to pass the cuts onto artists and the creative businesses they support.
Mr Munro said: “The early reaction is far from positive - there is despair, despondency, disillusionment and fear.
“People are exhausted trying to keep the show on the road and this is only adding to the pressures and is not sustainable.
“Those who are financially fragile are now at risk if this perfect storm continues.”
Even with this emergency cash, a third of the organisations Creative Scotland regularly funds are at risk in the next six months, which equates to 900 jobs and 12,000 opportunities for artists, and 1.4m audience members lost.
Mr Munro warns if this £6.6m is maintained next year, half of their organisations would be at risk, which would lead to 2,000 job losses and 26,000 lost opportunities for artists, and 3.5m lost audience members.
He urged the government to go further than just reinstating the budget, as culture funding has now dipped below 0.1 per cent of the overall government budget.
Creative Scotland wants to see this increased to at least one per cent of total government expenditure, as the average in many other European countries is 1.5 per cent.
Lori Anderson, director of Culture Counts, told the committee the reinstatement of the £6.6 million budget cut by the Government “goes beyond disappointing”.
She said: “It will be a massive knock in confidence to the sector and there’s going to be a significant job for the Government to restore trust between the Scottish Government and the sector, in all honesty.
“It shows a disconnect between what’s being said by us and what is being heard, and it ultimately shows that the value of the sector is really not understood.”
The Campaign for the Arts, meanwhile, called the latest funding decision an “extraordinary betrayal” of Scotland’s creative industry and has now launched a petition against the government’s cuts.
Jack Gamble from the campaign group said: “Scotland’s artists and arts organisations need backing, not broken promises.”
The decision has also sparked fierce criticism from opposition parties within the Scottish Government.
Donald Cameron MSP, the Scottish Conservatives’ culture spokesman and deputy convener of Holyrood’s culture committee said: “It is completely unacceptable that ministers who were quick to boast about U-turning on previous planned cuts earlier this year and now set to impose them on Creative Scotland after all.
“This is an insult to Scotland’s struggling arts sector and it is clear the cutting of millions of funding from their budget will have a devastating impact.”
Mr Cameron added Culture Secretary Angus Robertson now has “serious questions to answer” on how thousands of job losses can be avoided on the back of this decision.
Neil Bibby MSP, Scottish Labour’s culture spokesman, said the SNP has “abandoned” the arts “at the worst possible time.
He said: “We are used to the SNP breaking promises but to do so after just seven months is particularly disgraceful - no wonder people in the sector are losing faith in the Scottish Government.
“It’s clear their disastrous incompetence is putting the very future of our creative industries under threat - they are risking jobs, damaging our economy and making culture less accessible.”
Neil Alexander, the Scottish Lib Dems’ culture spokesman, described the move as “cultural vandalism” and called on the SNP to immediately reinstate the funding.
However Culture Secretary Mr Robertson said the government agreed to the £6.6m funding cut after providing £33m to Creative Scotland to compensate for a shortfall in National Lottery funding over the past five years.
He said: “The Scottish Government has an obligation to balance the budget each year and prioritise funding to deliver the best value for every taxpayer in Scotland.
“As a result of rising costs and pressure on budgets across government, made more challenging as a result of rising UK inflation, we are unable to provide funding to support the lottery shortfall this year.
“However, I expect this funding will be able to be provided as part of next year’ budget, subject to the usual parliamentary process.”
He added: “Creative Scotland has built up funding reserves and I am pleased they have agreed to use all the resources at their disposal, including these reserves, to support the culture sector and help protect jobs at this challenging financial time for us all.”