Third of Scottish arts bodies at risk of insolvency, Creative Scotland warns

One in three arts organisations in Scotland is “at serious risk of insolvency in the short term” due to rising costs and standstill public funding, Creative Scotland has warned the Scottish Parliament.

In a submission to Holyrood’s Constitution, Europe, External Affairs and Culture Committee, the public funding body said up to 900 jobs were at risk as a result, as was financial support for more than 12,000 freelancers.

Creative Scotland told MSPs that organisations at risk of insolvency included “major cultural organisations of national and international importance”, as well as “producing companies and venues in the performing arts” and “key nationwide festival infrastructure”.

It said that Scotland’s arts organisations were continuing to struggle with a “perfect storm” of “increased operational costs due to high inflation, increased energy costs and increased costs associated with implementing fair work policies, against a backdrop of standstill funding”.

Creative Scotland labelled public funding for the arts in Scotland, which has been at standstill levels since 2018, as “short-term in nature and precarious in reality”.

It said Scotland’s annual budget for culture was “comparatively low and consistently below the European average” and did not enable arts organisations “to operate effectively or to develop the range and breadth of creative work that the people of Scotland deserve”.

The Scottish government U-turned on a planned 10% cut to Creative Scotland’s budget for 2023-24 in February, but the public body’s funding from 2024 onwards remains unknown.

Creative Scotland said: “We do not know what our budget will be beyond March 2024 and, therefore, neither do the people and organisations that we support across Scotland’s culture and creative sector.”

Creative Scotland is in the process of enrolling a new Multi-Year Funding Programme, which will replace several of its current funding programmes, including its Regular Funding for Organisations programme, in 2025.

The public body reiterated its warning from August that the programme would be heavily oversubscribed, and that it would be forced to cut the number of arts organisations it supports unless it receives more funding from the Scottish government.

The public body told MSPs: “We are clearly communicating that, unless budgets from the Scottish government increase over the coming years, the new Multi-Year Fund will not be able to support as many organisations across Scotland as we currently do.”

It continued: “This means that many organisations currently operating will either need to adapt the scale and scope of what they do or, inevitably and unfortunately, cease operating.”