In March 2011, Side Gallery in Newcastle, Pavilion in Leeds, Four Corners Film in east London and the Hereford Photography Festival were dropped from Arts Council England's National Portfolio, losing, as a result, the bedrock of their funding for the following three years. Rhubarb Rhubarb in Birmingham, Photofusion in London, De La Warr Pavilion in east Sussex and Autograph in London also suffered cuts in funding of up to 14 percent, while Focal Point Gallery in Southend-on-sea, Redeye Photography Network in Manchester, Open Eye Gallery in Liverpool, The Photographers' Gallery in London, Impressions Gallery in Bradford, Quad in Derby and Photoworks in Brighton were awarded larger funding envelops from ACE.

Yet, as BJP has found 18 months later, all of these organisations have had to face tough choices to maintain their programme of exhibitions and cultural events at a time when the whole country is facing a double-dip recession.

Speaking to BJP, Side Gallery says it had to implement several strategies in order to survive, including cutting its staffers' wages. "The collective operates on the basis of an egalitarian wage," says Graeme Rigby of Side Gallery. "It's not high, but we can always agree to percentage cuts or paying ourselves for fewer of the days we work. Both methods have been adopted over the last year and a half."

He adds: "We have curated more exhibitions from the archive – they often take more time to develop than new work, but we don't have to pay ourselves for that. At the same time, some photographers, who are deeply supportive of Side Gallery, have been very generous in enabling us to show their work. We haven't been able to generate the range of events we would have liked to organise and it has had an impact on building maintenance."

According to Rigby, although Side has always been supported by multiple funding sources, finding a sponsor to fill the gap created by the Arts Council is proving nearly impossible. "Nobody is going to pick up the tab on a revenue requirement. We're trying to put together a model with a number of funding strands. Some sources might offer relatively reliable alternatives, but in most cases, there will be a need for constant fundraising."

Four Corners Film, a photography and moving image centre based in London's East End was also left looking for core funding after it lost the £52,000 per year it used to receive. Although the organisation was successful in obtaining £50,000 to fund a pilot artist residency programme for three artists, finding substantial funding to run the organisation has proved problematic, according to Four Corners' development director, Carla Mitchell.

"Funding is much more difficult, as we cannot use the Arts Council core grant as match to lever in additional funding. It has definitely affected our short-term sustainability, which, given that our grant was only ever £50k a year, shows the added value that Four Corners was able to draw down as a result of that funding. Unfortunately a number of other Arts Council funding programmes – such as their capital programme – are more or less ring-fenced for National Portfolio Organisations, so it is very difficult to apply for them."

Four Corners has been trying to tackle the lack of outside funding with the development of its own revenues by renting its facilities and equipment. The organisation is also planning to re-apply to become a National Portfolio Organisation in 2013.

According to Mitchell, though, the problem also lies with the lack of art funders taking notice of photography in general. "Interest in photography has expanded hugely in recent years, and arts funders should recognise this and the importance of the art form. But it needs a higher profile – for example in France or the US I think it is taken more seriously."

The contemporary art gallery, Pavilion, also lost £50,000 a year in ACE funding, which according to director Gill Park, produced an atmosphere of instability within the organisation. "We have a project lead structure that's great and we're able to do what we want to do, in that sense we've been able to continue to do what we care about. We don't have the same security as a three-year funding contract, but I don't think anybody has much security in the arts at the moment."

Although the Arts Council continues to provide the majority of Pavilion's funding, the organisation is diversifying its funding sources. "Pavilion has always had a very mixed portfolio of income and we're continuing to fundraise through various different sources and we rely on that mixed portfolio. I'm not sure what [sources] are more successful than others but the arts council continues to be our most important funder."

The Hereford Photography Festival, which also used to receive £50,000 a year from ACE, was not able to put on a festival in 2012 as all of its employees were made redundant as a result of the cuts.

According to Jaime Jackson, the festival's last project director, the board of trustees had no choice in the matter as it did not have the funds necessary to pay the festival's management team. "There's not much money around at the moment to deliver these kinds of projects. Hopefully the situation will change in the long term. It's really difficult to maintain organisations that don't get funding. People can't really work for free as it's not professional. It was just an impossible situation really; there weren't any other ways to get funding so there was nothing they could do."

While there were no editions this year, the organisation continues to operate as a charity, and Jackson is optimistic that if funding is found, the festival will be reinstated. "Arts organisations are quite often set up by artists, so very creative minded people. They're quite proactive in terms of historically managing within a poorly funded sector, so I think that artists and art professionals will find ways to survive."

Side Gallery

Other organisations that remained within the ACE's National Portfolio but with a reduced budget have also been working hard to fill the gaps in funding, BJP has found.

In Brighton, Photoworks, which was forced to merge with Brighton Photo Biennial in 2011, has been struggling with the cost of running two organisations when the Arts Council is only providing enough funding for one. "Whilst successful in securing three-year funding from Arts Council England, the funding is approximately one third less than what both organisations received independently," says director Emma Morris. "As a result, the team was restructured with the loss of two senior posts. We also moved into offices at the University of Brighton, saving on rent and overheads."

She adds: "We cannot deliver what both organisations did in the past with reduced funding and need to focus on a programme of activities, which delivers the greatest impact in terms of quality, audiences, engagement and partnerships. We are also looking at our commercial activities, identifying where we can further maximise profit and which areas are not currently performing. There is considerable emphasis at the moment on individual giving and whilst keen to engage further with this, we are aware that it is a significant challenge for small arts organisations, especially outside of the major cities. We remain ambitious, realistic and pragmatic."

In London, Photofusion, which saw its budget reduced by 6.9 percent, has tried its best to move on from the cuts. According to director Julia Martin, the organisation is working to increase its services in order to create new revenues, as well as expanding its audience. Although some funding streams have been found, these are intended for individual projects. "But that doesn't help with the actual loss of income form the arts council," says Martin.

De La Warr Pavilion, the contemporary art gallery in East Sussex also had 6 percent of its funding cut by the Arts Council in 2011. "We have had to put extra effort into minimising costs and maximising visitor spend," Sally Ann Lycett, director of external relations, tells BJP. "I don't think our visitors have noticed any change in terms of the quality of our programme. For the staff, it's about looking at different, more cost-effective ways of working, and in some cases doing less."

The gallery has also transformed its entire business model by, for example, collaborating more with other arts organisations with the goal of sharing resources and expanding its programme and national profile. "[Cuts] are an opportunity to look at yourself and ask who you really are and how relevant you are to the sector and your audiences," Lycett adds.

Of course, the 2011 round of funding wasn't all bad news for photography galleries and organisations. The Open Eye Gallery, Redeye, Photoworks, Impressions Gallery, Focal Point Gallery and The Photographers' Gallery saw their budgets increased for the years 2011 to 2013. Yet, despite the good news, they have all remained pragmatic.

"It's not actually more money in some respects because we were getting a lot of extra money from different streams of arts council funding, so in a way it hasn't changed that much," says Focal Point Gallery director Andrew Hunt. "Also the increase only happens in the third year of the new NPO agreement. It's not an awful lot more money in the short term."

In London, The Photographers Gallery obtained more than £2.7m in Arts Council funding, representing a 10.4 percent increase over the previous three years. "As a percentage of our overall grant, the increase was modest, so whilst it was most welcome, it did not mean we radically altered our plans in the short term," the gallery's director, Brett Rogers, tells BJP. "It allowed the gallery a measure of stability for our future financial planning, which was especially important for the next three years following our reopening in May 2012. We were also able to finally implement our paid interns scheme."

According to Rogers, the gallery has conducted a risk management exercise to find ways to prepare for a possible decrease in funding in the future. It is also working on diversifying its income streams in order not to rely as much on public subsidies. "ACE encourages and supports us to identify new and inventive ways to source new income streams from online fundraising and crowd-sourcing to diversifying our membership offers," says Brett.

In Derbyshire, Quad, a centre for art and film and organiser of the Format International Photography Festival, received a 3 percent increase in Arts Council funds, giving it a yearly budget of £485,000. "The first thing to say is that whilst there was an increase, the inflation adjusted amount was only 3 percent so this was a modest increase," says director Keith Jeffrey. "In that sense we have therefore carried on with our programme as before, the settlement gave us little scope to substantially expand on our current provision."

He adds: "The NPO settlement was crucial to our long-term future; we cannot offer our programme without ACE support. We have no reason to believe that our funding will not be renewed but we understand the significant funding challenges facing the entire public sector. Our strategy therefore is to work hard to generate new income streams and we have strategies and activities in place to do just that."

Brighton Photo Biennial © Nigel Green

Photography organisations are right to take this pragmatic approach as ACE announced in October that it would be restructuring its organisation as a result of government cuts.

In the coming weeks, staff numbers at ACE will be reduced by 21.3 percent, with four out of the eight executive director positions, which are accountable for delivering strategy, cut. The size of current offices will also be reduced in order to cut property costs by 50 percent. ACE's major offices will be situated in London, Birmingham, Manchester and Bristol, with some smaller offices spread locally to remain close to the arts and cultural sector, and to local government. The Arts Council's current regions and areas will be replaced by five areas covering London, the South East, the South West, the Midlands and the North.

Speaking to BJP, ACE isn't shying away from the fact that nearly half of the arts organisations they are supporting have been affected by reductions in funding. "The Arts Council took a 29.6 percent cut in government funds in 2011/12," says a spokesman. "Following the announcement of our Investment Strategy on 30 March 2011, this meant that there were 261 organisations receiving some kind of decrease in their funding in cash terms compared to their 2010/11 funding. In real terms 308 organisations received some level of reduction."

He adds: "The whole public sector, including the Arts Council, has had to make difficult funding decisions in the face of local authority and government cuts. Despite our funding from government being cut by almost a third in 2011/12, we continue to advocate for, invest in and develop arts and culture."

Although the organisation will be smaller, its spokesman says that ACE will try not to lose sight of its long-term goals by using a more streamlined investment process and more focused set of priorities. This will include a more collaborative way of working with the arts and culture sector, which began earlier this year when they contracted the NGO Julie's Bicycle to help art organisations improve their environmental sustainability.

Despite the cuts, ACE is aiming to support arts organisations the best it can with the resources that it has left. "We are protecting the relationship management and artistic and cultural expertise that we know our colleagues in the sector value and appreciate. We have also protected our ability to have successful working relationships across the arts and cultural sector, and with local government in England. We've protected as many roles, and therefore as much expertise, as possible by keeping other costs low."

And although arts organisations have had a difficult year as a result of ACE's cuts, there is a feeling of empathy towards the government-funded organisation. "ACE has been going through enormous changes itself," says Rigby of Side Gallery. "It's not particularly surprising that the implications of massive and rapidly delivered organisational, policy and funding changes are often only being discovered in the detail of particular applications. The experience of this on the ground is difficult. It feels like the goal posts are constantly changing."

He adds: "Very few people will have wanted the economic crises of the past few years, but the incoming government clearly saw austerity as an opportunity. It provided a narrative of necessity. They wanted to shake things up across the whole public sector. From their perspective it has had all the appeal of iconoclasm. From where we're standing, and not just in the arts, it has looked like simplicities of right-wing analysis in combination with back-of-a-fag-packet planning and reckless pressure on organisations like the Arts Council to deliver. And endless cock-ups. In their different ways, both Side Gallery and ACE are having to deal a bad situation."

Gill Park of Pavilion echoes Rigby's mistrust of the government's motivations regarding the arts sector. "For the arts in general the future is difficult, it's quite frightening the sort of culling of the arts and the critical voice that I think is just being attempted by the current government and I think it's a dangerous position to be in. Yet, I think that in the arts world we're all very determined and resilient, aren't we?"

She adds: "ACE is trying not to pass on these cuts to arts organisations and trying to trim down their own organisation which means it's offering its support," says Hunt of Focal Point Gallery. "In terms of its staff, it is going to be reduced, which is a big thing really. I mean it's okay talking about money but in a way I'm worried about them as an organisation." 

Whatever happens, ACE will continue to advocate public investment in the arts, its spokesman tells BJP. "Given the continued pressures on public spending, we clearly can't rule out the possibility of future cuts. However, the Arts Council has as yet received no indication from the government of further cuts to arts and cultural funding for the current spending period, or a date for the next spending review. The Arts Council will be making a clear case to government for continued public investment in arts and culture and would strongly protest any suggested cuts, which would damage the sector's considerable ability to contribute to economic growth."