Reactive Statement: UK Government’s response to Baroness Hodge’s independent review of Arts Council England

Creative UK welcomes the UK Government’s acceptance of all recommendations included in Baroness Hodge’s independent review of Arts Council England (ACE), particularly those that champion a more innovative and future-facing funding ecosystem, alongside the clear affirmation of the arms-length principle.

We have long argued that the UK’s world-leading cultural sector cannot thrive on grants alone. Our submission to the Hodge Review, developed in consultation with Creative UK’s publicly funded arts and cultural members, called for a step-change in how public investment is structured – embracing blended finance, patient capital, philanthropic incentives and catalytic investment to build stronger, more resilient cultural organisations. We are therefore encouraged to see the Hodge Review’s clear recommendation that ACE be empowered to offer a wider range of financing options, including loans, blended finance, social impact investment and equity through a new trading arm, recognising that a more mature funding system will require more than one instrument.

We are also encouraged by the emphasis on stronger evaluation and clearer evidence of culture’s significant contribution to growth, place and prevention – new financial tools are important, but just as critical are better ways of ensuring HM Treasury recognises the full value that cultural organisations create.

The Hodge Review’s proposal for £250 million endowment fund, designed to leverage matched philanthropic giving, aligns closely with our call for new mechanisms that crowd in private capital and diversify income streams across the cultural sector. As such, we warmly welcome the UK Government’s response which commits to working in partnership with ACE to develop innovative finance and fundraising models – an approach that reflects Creative UK’s long-standing view that mixed financial tools are essential to supporting artistic risk, organisational sustainability and community impact.

We also recognise and welcome several other areas of alignment between our submission and the UK Government’s response – from strengthened support for individual artists and freelancers, to reduced bureaucracy and improved access for organisations of all sizes. The clear commitment to major system reform, including simplified processes and a refreshed National Portfolio framework, demonstrates that the views of our members and the wider sector have been heard.

These reforms have the potential to mark a pivotal moment for the UK’s cultural and creative industries – a sector worth £145.8bn in GVA and growing at four times the rate of the wider economy – the test is now delivery. Creative UK looks forward to working with the UK Government, ACE and partners across the sector to turn these commitments into meaningful, long-term change.