Arts Council England is being rebuilt from the inside out. In the span of six months, the body that distributes roughly £460 million in public money annually has scrapped its decade-long strategy, absorbed a damning independent review, welcomed a new chair, and begun redesigning how it funds the sector. The question haunting the culture sector is whether the reforms address structural failures - or merely repaint the façade of an institution under unprecedented strain.
The Hodge Review: Diagnosis of a System in Crisis
The catalyst for ACE's upheaval was the independent review commissioned by the Department for Culture, Media and Sport and conducted by Labour peer Baroness Margaret Hodge of Barking. Published in December 2025, the review was unsparing. Hodge found "a loss of respect and trust" for ACE among the organisations it funds, driven by perceptions of political interference in decision-making and an application process so onerous that it had become, in her words, "incredibly bureaucratic" - one whose processes were "time consuming" and "stifle creativity".
The review documented a sector in financial distress. A decade of austerity had hollowed out local authority arts funding, while the pandemic and its aftermath left business models across the non-profit performing arts sector, as the National Theatre's own research showed, no longer viable. Hodge described the cuts in public funding over the past decade as representing "an existential threat to the health and vibrancy of the arts and culture sectors".
Her central finding was not merely procedural but institutional. "People viewed ACE as a command-and-control funding body, rather than a leader and facilitator in the cultural landscape," the report stated. Larger organisations had hired staff solely to handle ACE applications; smaller ones had outsourced them to a growing industry of funding consultants. In both cases, ACE money was being spent to satisfy ACE's own procedural demands - a circular drain on resources that the review called wasteful.
Hodge issued 40 recommendations. Among the most significant: replace the flagship Let's Create strategy with something less prescriptive; extend National Portfolio Organisation funding cycles from three to five years; introduce a national programme for individual artists; and restore genuine arm's-length independence. She framed the stakes in blunt terms. "It will be a disaster if [ACE] just pays lip service to what we're doing," she told The Guardian in March 2026.
Let's Create Is Dead - Long Live the Strategic Framework
On 28 May 2026, ACE chief executive Darren Henley formally retired Let's Create, the 10-year strategy introduced in 2020 and designed to run until 2030. The strategy had been built on four investment principles, including Environmental Responsibility and Inclusivity and Relevance. It had been consulted on with over 6,000 people and several pieces of commissioned research. Yet almost immediately after its launch, the pandemic struck, and the strategy's prescriptive application criteria became a lightning rod for sector frustration.
Hodge's verdict was cutting: "Though the strategy was named Let's Create, many felt that its implementation stifled creativity and innovation." Charlotte Higgins, writing in The Guardian, summarised the recommendation as "binning Let's Create, the 10-year strategy designed to take ACE all the way to 2030, in favour of a simpler strategy that allows organisations to apply based on their own strengths, rather than endlessly banging square pegs into round holes."
Its replacement, the Strategic Framework 2026, is explicitly described as a "practical, interim guide" - a stepping-stone rather than a destination. It rests on three principles: support excellence, deliver for everybody, and reach everywhere. The framework pledges that "our funding decisions will be made on the basis of the quality of the creative or cultural work you are proposing," reinstating artistic excellence as the primary criterion for investment.
The sector reaction was measured. Anna Shea, policy officer at performers' union Equity, welcomed the "change of direction and abandonment of Let's Create strategy." Trevor MacFarlane, CEO of Culture Commons, praised ACE's "swift response." But critics were sharper. The Arts Professional editorial identified a core problem: the framework "confuses values with objectives. Its three headline 'Objectives' are broad aspirations rather than measurable commitments, offering no indication of what ACE will deliver, by when, or how success will be assessed." Without defining what ACE is fundamentally for, the argument went, it cannot prioritise - and a document that simplifies language is not the same as one that simplifies choices.
The Funding Picture: £1.5 Billion and a Structural Deficit
The financial backdrop is a paradox. In January 2026, Culture Secretary Lisa Nandy announced a £1.5 billion package - the largest capital investment in the arts in over a decade. It includes £425 million for the Creative Foundations Fund, £160 million for local and regional museums, £27.5 million for the Libraries Improvement Fund, and a 5% uplift for over 1,000 regularly funded organisations from 2026/27. An additional £80 million over four years aims to deliver arts activity in every local authority.
Yet the Hodge review argued these sums remained insufficient. Hodge proposed more radical interventions: a £250 million endowment fund modelled on the NESTA model, the ability for publicly funded shows achieving commercial success to return funds to ACE, and the option for ACE to operate its own trading arm. The government's formal response in March 2026 accepted or committed to explore all recommendations, pledging up to £8 million for ACE to simplify its systems. But critics were withering. "£8 million for a new online platform is not reform," wrote one commentator. "This is a systems upgrade, not systems change. The Hodge Review identified structural failures - not IT failures."
Leadership Transition: From Serota to Airey
The reforms arrive at a moment of leadership change. Sir Nicholas Serota, who has chaired ACE since February 2017, steps down on 31 July 2026. His tenure encompassed what he described as "periods of significant change and uncertainty, including a global pandemic, economic challenges and shifts in the way people engage with culture." He acknowledged that "through it all, the creativity, resilience and ambition of the sector have been extraordinary."
His successor, Dawn Airey CBE - a media veteran who helped found Channel 5 - begins her four-year term on 1 August 2026. The appointment, approved by Culture Secretary Lisa Nandy, will be closely watched as the next National Portfolio round (2028–31) takes shape. Airey's mandate is explicit. "The Arts Council has a clear new mandate, informed by the recent independent review - to do more to support, nurture and protect the arts, and to do so transparently, with speed and with a fairer distribution of spend," she said.
Darren Henley, ACE's chief executive, framed the transition as catalytic. "From day one, she'll be a catalyst for change helping us in the next stage of our journey," he said.
The Arm's-Length Question
Running through the Hodge review like a fault line is the question of arm's-length independence. The principle - enshrined in ACE's Royal Charter - holds that political decisions about art should not be made by politicians. Yet the review documented a perception that DCMS had been exerting influence over ACE decisions. Hodge stated: "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."
The government's response reaffirmed the principle: "Under this government, the Arts Council will remain an independent and politically-impartial champion of freedom of expression." But critics pointed to concrete evidence of slippage. Freedom of Information responses showed that DCMS had directed the allocation of the £80 million uplift and that ACE had restricted eligibility for administrative convenience. Neither the government nor ACE responses proposed structural safeguards against future encroachment.
The Writers' Guild of Great Britain captured the tension. While welcoming the commitment to arm's-length independence, it noted that "talk of injecting philanthropy and the introduction of a trading arm into ACE's work raises central questions about the role of Government in funding of the arts and how alternative sources of funding might conflict with the arm's-length principle and artistic freedom."
What Comes Next: A Sector Holding Its Breath
The immediate priorities are concrete. ACE plans to publish details on a "much simpler" NPO process in June 2026, with guidance in September and funding decisions by July 2027 for the portfolio commencing in 2028/29. A new Touring Service will begin rolling out in 2026/27. Work on a Service for Individuals - the national funding programme for freelancers and individual artists that Hodge recommended - starts immediately. The full new strategy is not expected until late 2026 at the earliest.
The sector is watching with a mixture of cautious optimism and deep scepticism. One museum professional told The Art Newspaper that "the revamp is welcome but let's hope that this approach turns out to be far less prescriptive." The broader concern is that ACE's response addresses process while leaving structure untouched - that a smoother application journey into a system with entrenched regional imbalances, no artform-specific policies, and no correction of historic portfolio imbalances merely reproduces the same outcomes more efficiently.
What is undeniable is that the landscape has shifted. For the first time in years, the fundamental architecture of arts funding in England is being openly contested. Whether the reforms prove transformative or cosmetic will depend on decisions not yet made, funding not yet allocated, and a new chair whose mandate is to deliver change that the previous administration could not. The sector, battered by a decade of cuts and a pandemic it has still not recovered from, has limited patience for incrementalism. Hodge's warning echoes: "I think there has to be a radical review in the way that the Arts Council works; how they use the money, their role in relation to the organisations that they support, and also their role in the wider arts landscape." Whether radical reform materialises - or whether the fractured landscape simply fractures further - is now the defining question for English cultural policy.
