For its 2010/11 operations, Arts Council England will receive £445m instead of the planned £468m - representing a £23m cut from its original budget. The previous Labour government had announced, in its April 2009, that ACE would see a £4m cut. This has now been supplemented by another reduction of £19m under the current governing coalition.

However, ACE says that it will be able to limit cuts to art organisations by offsetting the budget shortfall using the organisation's historic reserves. "In deciding how best to apportion the latest in-year cut the Arts Council has sought to protect and develop art, and the organisations that enable it to happen, to the fullest extent possible," says the ACE. "The cut to regularly funded organisations’ 2010/11 income from Arts Council will, therefore, be limited to 0.5%."

"This has been made possible only by the exceptional use of £9m of the Arts Council’s historic reserves, access to which was previously blocked by government. Had that not been the case, funded organisations would have sustained a 3% (£10.8m) cut."

The organisation also plans to cut £0.4m from its operating budget. Another £6m have been saved "due to the postponement of a major public engagement project, cuts to our audience development plans, and to funds for partnership working with local authorities and the private sector," it says.

Dame Liz Forgan, Chair of Arts Council England, says: “Some immediate impact was inevitable, and in the longer term the arts sector will also feel the effect of the cutting back of projects that are key to its long term sustainability and development. But I am confident that the decisions we have taken are the right ones – for art, for artists and for the audiences we serve.”

Arts Council England’s budget for the next three years (2011-14) will be decided in the government’s Spending Review, for which results are expected in the autumn.

For more information, visit www.artscouncil.org.uk.