Arts Council England must ensure funding is protected from politicisation and simplify its application process in order to regain trust, a damaging report has found.The investigation into the national body for arts funding found there had been a “loss of respect and trust” for ACE among those it backed, in part because of “perceived political interference in decision-making”.The report was written by the Labour peer Margaret Hodge, who recommended that ACE be retained but with the arm’s-length principle strengthened at all levels of government “to ensure that arts funding is protected from politicisation”.She said: “There have been attempts to exert more political control over ACE decisions in recent years and this has to stop.The Arts Council must remain free from political interference.

This matters.It ensures that artistic freedom is protected, that creativity is not stifled and that public trust is maintained.Political interference, even by those with the best of intentions, could lead to political bias, or even censorship.”ACE is a non-departmental public body of the Department for Culture, Media and Sport (DCMS) that distributes public funds to arts organisations ranging from national institutions to community-based ventures.Lady Hodge’s report calls for red tape to be minimised by simplifying the funder’s application process and by replacing its Let’s Create strategy – a set of investment principles and delivery plans – which was supposed to be in place until the end of the decade.

Those who gave evidence said Let’s Create was “a straitjacket … stifling artistic innovation and creativity”; Hodge called for it to be replaced with “a new, less prescriptive” model,Earlier this year, Wigmore Hall voluntarily withdrew from ACE funding, with the London concert venue’s director, John Gilhooly, criticising Let’s Create, saying ACE had “lost its way”,On Tuesday, Gilhooly said the foregrounding of ACE’s “crippling red tape” vindicated what he and other arts leaders had been telling the funding body privately for years,“We hope the government will implement every recommendation of this report, and that ACE abandons its current role as the enforcer and regulator of the arts and becomes our greatest champion, delivering great arts and culture to every citizen,” he said,A straining in relations between ACE and the bodies it gives money to was a theme throughout Hodge’s report.

“People viewed ACE as a command-and-control funding body, rather than a leader and facilitator in the cultural landscape,” it said.Shortly before the report was originally commissioned in March 2024 by the then culture secretary, Nadine Dorries, ACE was forced to amend “reputational risk” guidance that suggested “overtly political or activist” work could break funding agreements.One of the key missions highlighted in the review was the need to reduce bureaucracy, including by “radically” reforming ACE’s application and reporting requirements.It said ACE should reduce the number of its funding streams.It also recommended lengthening the national portfolio organisations (NPO) cycle from three to five years, having a rolling programme of applications, and assuring certain organisations that they would receive at least 80% of their funding in the next round.

It said the government “can and must” find innovative ways of responding urgently to the underfunding that had undermined the arts over the last decade.These include amending theatre tax relief and orchestra tax relief to include the additional costs of touring, which have been exacerbated by Brexit.The report suggested that ACE could meanwhile offer a wide range of financing options by having a trading arm.It also recommended a new mechanism to bring money back to ACE when an NPO has produced a show that is a strong commercial success – either by a return through royalties, or a percentage of profits or a fee.The report said that while decisions about funding for arts organisations of national and international significance should be made by a national panel, other funding should be handed out by new local and regional decision-making boards.

Hodge said ACE was “a vital national body” whose role in “promoting and ensuring access to excellence” was fundamental to its work.The culture secretary, Lisa Nandy, stressed the necessity of access to the arts.She said the review highlighted the strengths of ACE’s work, “but it also challenges us to do better.It sets out recommendations to strengthen support for artists, reach communities more effectively, and ensure that creativity is accessible to all.”ACE said it was heartened to read of the “overwhelming” backing for its principles.

But it said it had also “heard clearly” that the organisation had been too “prescriptive” in how it implemented its Let’s Create strategy.It vowed to give artists and organisations more space to articulate their ambitions and reduce the administrative burden placed on them.The ACE chair, Nicholas Serota, said the report “offers us an opportunity to listen, learn, and improve – so that we can continue to nurture ambition, excellence, and access to excellence in the artists and organisations that we support”.The ACE chief executive, Darren Henley, added: “We want people to spend less time on our paperwork and more time on their creative work.Our mission over the months to come is to roll up our sleeves and make that happen.

”The government will publish a response to the review in the new year, when Serota is expected to be replaced as chair.The Royal Ballet and Opera, which receives the largest single grant from ACE for its core funding, was among the arts organisations that responded to the report on Tuesday.Alex Beard, its chief executive, said Hodge’s proposals had the “potential to be transformative for performing arts organisations”.