Baroness Margaret Hodge’s much-anticipated review of Arts Council England (ACE), published on December 17, 2025, has sent ripples throughout the UK’s cultural sector. Drawing on conversations with some 700 individuals—including artists, institutional leaders, and sector representatives—the review delivers a sweeping set of recommendations that could reshape the future of arts funding and strategy in England. The government, led by Culture Secretary Lisa Nandy, is expected to respond in the New Year of 2026, but already, the review has ignited debate, hope, and a fair share of skepticism.
At its core, the review asserts that ACE should remain intact but must reinforce its independence from political influence. According to Classical Music, Baroness Hodge’s report warns, “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.” The report calls for a strengthened ‘arm’s length principle’ to safeguard ACE from politicization, a stance that has been welcomed by many in the sector who fear that government meddling could lead to bias or even censorship.
The review pulls no punches in its criticism of ACE’s bureaucracy. There was “almost universal” dissatisfaction with the current funding application and reporting processes, particularly with Grantium—the online grant system introduced in 2016. As cited in Museums Journal, “Grantium has become such a byword for complexity that one group of artists told us that people had been put off from applying for funding simply because they had heard it was so difficult to navigate the process.” The burden, the review notes, is especially heavy for individual artists and smaller organizations that lack the resources to grapple with lengthy, convoluted forms.
To address this, Baroness Hodge recommends an overhaul of ACE’s IT systems, suggesting the adoption of ‘off the shelf’ software and simplified guidance for applicants. She also proposes that the government consider providing additional funding to support these upgrades. The review’s findings on ACE’s reporting tool, Illuminate, echo similar frustrations: designed for event-based surveys, it fits poorly with the operational realities of museums and other cultural institutions.
Beyond the administrative, the review identifies a pressing capital crisis facing England’s cultural venues. Over three-quarters of arts centers are unable to complete planned building work, and 60% haven’t seen significant refurbishment in more than a decade. Insurance costs for listed cultural buildings have soared by up to 200%, and in some cases, the cost of repair has become so prohibitive that demolition is being considered. As the review starkly puts it, this is “the critical urgency of this challenge.”
While the government’s £85 million Creative Foundations Fund for 2025-26 is a welcome relief, the review contends that it is nowhere near enough to tackle the scale of need. Innovative solutions are floated, such as reviewing legacy capital charges and title restrictions that prevent organizations from securing private finance, and deferring Culture Recovery Fund loan repayments for charities—provided they can match every deferred pound with philanthropic fundraising earmarked for urgent capital needs.
The review also takes aim at the effectiveness of statutory schemes like the Government Indemnity Scheme, which has become less effective post-pandemic due to stricter risk assessments. One stakeholder warned of a “ticking time bomb” as fewer works reach venues, with independent museums feeling particularly excluded from these schemes. The report calls for ACE to take a more proactive role in raising awareness of the Acceptance in Lieu and Cultural Gifts schemes, and to adopt a more pragmatic approach to risk, supported by government.
On the strategic front, Baroness Hodge’s report presses ACE to develop a dedicated, long-term plan for museums in partnership with the Department for Digital, Culture, Media and Sport (DCMS) and the wider museum sector. The review found “a strong desire for ACE to create and own a strategy for museums that would clarify its role and define its aims,” according to Museums Journal. Despite positive feedback on ACE’s support—especially funding streams and the Museums Team—there is concern that museums are often seen as less important than other arts sectors.
Perhaps the most radical proposals relate to governance and funding distribution. The review suggests devolving most funding decisions to local and regional boards, potentially aligned with mayoral authorities, while retaining a smaller, national ACE. These boards would include local artists, community representatives, education professionals, and local government figures, giving them a greater say in how funding is spent in their regions. This approach, inspired by international best practices, seeks to balance local priorities with national oversight.
Baroness Hodge also recommends reducing and simplifying the number of ACE funds, even as she calls for the creation of four new ones. For National Portfolio Organisations (NPOs), the review proposes five-year funding terms on a rolling basis, so decisions aren’t dictated by election cycles or fiscal events. High-performing organizations could be guaranteed progression to the next portfolio, with at most a 20% funding cut at risk. However, as Arts Professional notes, the unintended consequences for those not deemed “high-performing” remain to be seen.
The review doesn’t shy from critiquing ACE’s “Let’s Create” strategy, which, while aiming to widen access to the arts, has been accused of stifling creativity and innovation. Many in the sector, including John Gilhooly of Wigmore Hall, have publicly voiced concerns, with Gilhooly stating, “It vindicates what many of us have been telling the ACE privately for years… ACE must listen, and I urge the government to take on all the recommendations in full.” The report suggests replacing “Let’s Create” with a less prescriptive funding strategy, giving artists and organizations more space to articulate ambition and reducing administrative burdens.
Other recommendations include new schemes to support emerging and mid-career individuals from low-income backgrounds, under-represented groups, and underserved areas, as well as tax reforms such as extending theatre tax relief and increasing Gift Aid for shows reaching audiences outside London and the South East. The review also urges the government to work with the sector to make philanthropic giving more attractive.
The economic case for the arts is made forcefully: in 2023, the arts, museums, galleries, archives, and libraries contributed £10 billion in Gross Value Added to the UK economy, and the wider creative industries added £124 billion. Yet, the UK’s public spending on culture is just 0.25% of GDP—lower than most European countries, outspent only by Greece.
Reactions to the review have been varied. Representative organizations and lobby groups have largely welcomed it, with the Independent Society of Musicians’ chief executive Deborah Annetts stating, “We thank Baroness Hodge for her thorough and insightful report on Arts Council England, which brings a much-needed common-sense approach to arts funding.” Alex Beard of the Royal Ballet and Opera described the proposals as “potentially transformative,” while ACE itself acknowledged the need to give artists and organizations more room for ambition and to reduce administrative demands.
As the cultural sector awaits the government’s formal response in early 2026, the ball is now in Lisa Nandy’s court. The challenge lies in translating this “heavily-adorned Christmas tree” of recommendations—some pragmatic, others aspirational—into concrete, deliverable action. The coming year will reveal which baubles will be realized, and which will remain wishful thinking.
