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The Welsh arts sector remains “in danger” while struggling to stay afloat with 40% less funding in real terms than 15 years ago, an arts chief has warned.

Dafydd Rhys, head of the Arts Council of Wales, expressed concerns about the Welsh Government’s planned “business-as-usual” budget rising only in line with inflation.

He told the Senedd’s culture committee: “It would be disappointing. The sector is in a vulnerable position and it would have an impact on our ability to provide adequate support… we would have to make some very difficult decisions.”

Mr Rhys described the proposed “standstill” settlement as essentially a cut, with the Arts Council currently operating with 40% less in real terms than in 2010.

He said: “It’s about prioritisation… it does show that arts haven’t been at the top of the list.”

‘Fragility’

The chief executive explained that had funding increased in line with inflation since 2010, the Arts Council would have been sitting on a budget of around £50m rather than £34m.

The former television executive said 90% of this budget was released into the sector but “we would have to look in earnest at what percentage rise we could provide”. He said the council would be forced to consider if it can afford to provide more multi-year funding.

Lorna Virgo, director of finance, warned a flat budget would make the sector more fragile, pointing to the impact of inflation and increases in national insurance contributions.

Asked about the loss of 13 posts due to a previous 10.5% cut, she said: “The staff have done an amazing job to ensure support is still provided to the sector.

“However, it has been very challenging and that’s one of the reasons why – in this current year – we’ve looked to restructure the organisation.”

‘Frustrations’

Mr Rhys added: “Restructuring isn’t an easy thing to do, those restructures do have an impact on morale,” describing the new council as “more fit for purpose for the future”.

Giving evidence today (October 2) as part of the committee’s annual scrutiny, he suggested the Arts Council might need to look at not filling some posts if given a flat settlement.

Maggie Russell, chair of the Arts Council, said the first restructure was imposed by the “brutal” 10.5% cut but a subsequent reorganisation has been “incredibly well received”.

She told Senedd Members it would be “incredibly disappointing” to then not receive the resources to allow the arm’s-length organisation to flourish.

Mr Rhys stressed the need to plan budgets with a longer-term horizon in mind, saying: “One of the frustrations for us, and for those who have made bids and been successful, is that this money has to be spent within this financial year.”

‘In danger’

The chief executive said some arts centres cannot afford to open full-time: “So, there are fewer, therefore, opportunities for the arts for people in the communities that we fund.”

He warned three or four organisations the council funds are in the “crisis” red category.

“They’re in very vulnerable situations,” he said. “But we are working with them… trying to help as best we can. No one in the Arts Council wants to see organisations disappearing.

“But there are organisations that we don’t fund on a multi-year basis which are in danger.”

Warning of “no slack in the system”, Mr Rhys told the culture committee the sector has still not returned to pre-pandemic levels in terms of audiences.

Ms Russell said: “It’s very specifically around finances: the finances are fragile… not always allowing the absolute ambition and talent of the sector to deliver what they want to.”