The main "flashpoint" for arts funding is the threat to local authority spending, the chairman of Arts Council England has warned.
ACE's annual grant-in-aid funding of £730m has been slashed by a third since 2010, causing painful cuts at the hundreds of arts and cultural groups it helps sustain across the country
But Sir Peter Bazalgette, ACE chairman, told the Financial Times that if councils' £1.58bn annual spending on arts and culture - which includes library services - were also pared back, the body did not "have the funds to replace funding that's withdrawn locally".
He said: "For arts and culture funding the flashpoint is local authorities. They're by far the largest funders of culture - almost twice the contribution of the Arts Council."
Newcastle City Council has cut its arts funding by 50 per cent, while Somerset County Council has axed 100 per cent of arts spending. "[Councils] are under considerable funding pressure and this is a situation that is predicted to continue for some years," said Sir Peter.
The warning over local authorities came as ACE delivered a riposte to accusations of a London bias in its funding, ahead of an inquiry by the culture select committee over whether it distributes arts money fairly across the regions.
The inquiry was sparked by an independent report in October, "Rebalancing our Cultural Capital", which found Londoners received a benefit of £68.99 per head from ACE and direct government spending on arts, compared to £4.58 per head in the rest of England.
As ACE delivered its submission to the culture committee on Monday, Sir Peter said the report was flawed in its "simplistic postcode analysis", which was "no basis for sound arts funding policy".
According to ACE, its London spending was far more equitable when compared with spending in 10 large English cities. Those in a 10-mile radius from the centre of London enjoyed £44 per head spending - compared with £16 in Manchester and Salford, it said. But over a 50 mile radius, the London figure fell to £17 against £10 in the northern city.
Sir Peter acknowledged the dominance of London institutions in the arts, many of which were established there in the 19th or 20th centuries, and said it had been a "personal crusade" to address this historical funding imbalance. But he believed the trend was heading in the right direction, with the proportion of Lottery funding for institutions outside London rising from 60 per cent in the past decade to 70 per cent today.
Touring activities by London institutions was an example of spending in the capital producing an output in the regions, he added. Some 42 per cent of ACE's money for touring went to London bodies, it said, but only 8 per cent of those activities were delivered in the capital.
Sir Peter said: "The clear message is that although London gets a high value of awards, most of it goes elsewhere."
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