November 28, 2025

What did the 2025 Autumn Budget mean for the arts?

The Chancellor avoided big new cuts, but did not unlock significant new potential for the UK’s arts and culture sector.

The Chancellor has unveiled the 2025 Autumn Budget, setting out the UK Government’s latest plans for tax and public spending.

The Budget affects us all in myriad ways, and it will have wide-ranging implications. What could it mean for the UK’s arts and culture sector specifically?

The outlook for central government culture funding is essentially unchanged

In the UK central government, the main public funder of the arts is the Department for Culture, Media and Sport (DCMS). It directly funds 15 national museums and galleries, heritage and collection organisations Historic England and the British Library, and development agencies the British Film Institute and Arts Council England (which in turn administers core funds to nearly 1,000 cultural organisations).

At the Spending Review in June, the Chancellor announced plans to grow government departments’ spending in real terms up to 2028-29 (by an average of 1.5% a year), but to cut DCMS spending over the same period (by an average of 1.4% a year).¹

The Autumn Budget has not adjusted DCMS spending limits. That means the Government is still planning to spend over a third less per citizen on Culture, Media and Sport by 2029 compared with 2010.

For some other departments, forecast spending over the next three years has changed slightly since the June Spending Review.

The Ministry of Housing, Communities and Local Government (MHCLG) has had a greater role in funding cultural projects and infrastructure in recent years. Under the Conservatives, approximately £1.1 billion was allocated for cultural projects through the Levelling Up Fund, delivered by MHCLG.² MHCLG’s capital spending was due to be held flat in real terms until 2029-30, but will now shrink by an average of 1.6% a year. Day-to-day spending up to 2028-29 is also forecast to shrink by more than was forecast in June – 2.6% a year on average, rather than 1.4%.
Day-to-day Education spending was due to grow by an average of 0.7% a year, but will now shrink by an average of 0.1% a year up to 2028-29. We do not yet know what impact, if any, this will have on the core schools budget.

One bit of good news at this Budget was that state-funded secondary schools in England will receive £5 million of new funding in 2026-27, for books to support the National Year of Reading. 📚

Local culture funding in England could face a further squeeze

Local government is a major public funder of the arts and culture, but many local councils are financially in dire straits. They faced big cuts to their spending power during the 2010s – but the cost of the services they are required to provide, and the demand for those services, keeps going up. Research by the Campaign for the Arts has found that, against that backdrop, English councils have more than halved their spending on culture since 2010.³

One major driver is the cost of services for children with special educational needs and disabilities (SEND). Rising demand has led to councils spending billions more overall on SEND than they get from central government.

At this Budget, the government announced that responsibility for SEND funding will transfer from local authorities to central government in April 2028. The Office for Budget Responsibility (OBR) forecasts that this will add about £6.3bn a year to central departmental budgets from 2028-29 – raising the possibility that other planned spending could be cut to balance the books.⁴

By that time, councils’ accumulated SEND deficits are also forecast to have reached £14bn.⁵ If those historic debts are absorbed by central government, it will further strain departmental budgets; if they are left with local authorities, it is likely to worsen and prolong the severe squeeze on councils’ ‘discretionary’ spending, including on the arts and culture. The Government has pledged to outline wider reforms to the SEND system in a white paper next year, and it is possible that forecasts could change in light of these.

We will be waiting longer for reforms to social care, which is also piling pressure on local authority finances. The independent review established by the government will not finally report until 2028.

Grants from Whitehall to local authorities have been growing in recent years, but after this Budget the Local Government Association (LGA) said: “we are anxious that the Budget does not provide the level of funding councils urgently need to ensure their financial sustainability, protect services and support local communities”.⁶

Business rates will change considerably in England

One of the most significant changes for the arts and culture in this Budget involves changes to business rates in England.

Business rates are charged on most non-domestic properties, and are a major source of income for local authorities.

Since 2019-20, many arts and cultural organisations occupying physical buildings have been eligible for Retail, Hospitality and Leisure (RHL) Relief on their business rates. In 2024-25, the rate of relief was 75%. At last year’s Budget, the Chancellor announced that it would fall to 40% in 2025-26.⁷. At the time, the Music Venue Trust warned that the change placed over 350 Grassroots Music Venues “at immediate risk of closure”.⁸

Now the Chancellor has removed the RHL Relief entirely, and introduced a distinct RHL rate instead. On the plus side, this will be lower than other rates on a permanent basis, and the discount will not be capped. However, the size of the discount (an average of 11%) is significantly less generous than the one currently given via the RHL Relief (40%).⁹

Additionally, properties valued above £500,000 will be ineligible for the RHL rate – and will have to pay a new higher rate, whether or not they are used for RHL purposes. This could be very significant indeed for larger cultural institutions, especially in London and the South East which has the highest number of rateable properties above £500,000.

The Government says that its ‘transitional relief’ and a separate expansion of their ‘Supporting Small Business scheme’ will “smooth the transition” to the new system. We are analysing these claims and will report on our findings soon.

Despite the end of the RHL Relief, the government did announce that Film Studio Relief on business rates – introduced by Jeremy Hunt in the 2024 Spring Budget – will be maintained “to support the creative sector”. This means that eligible film studios in England will continue to receive a 40% reduction on their gross business rates bills until 2034.

New cultural funding could come from taxing overnight stays in England – but it’s far from guaranteed

The government has announced that England’s mayors will get new powers to create local overnight visitor levies.

This has been welcomed by many in the arts and cultural sector, who have been advocating for the move as a way of unlocking a new source of funding, especially for much-needed repairs and upgrades to cultural infrastructure.

However, the precise implications of the move are currently unclear. The government has said “visitor levies provide funding for local investment – including in the culture, arts, and sports sectors that form a key part of attracting visitors”.¹⁰ But they are currently consulting on how such levies should work, and how any revenues collected should be used. It’s quite possible that we will end up seeing considerable variation in whether/how Mayoral Strategic Authorities apply levies, with each one supporting the arts and cultural sector to different extents and/or in different ways.

The government confirmed in the Budget that the previously-announced Creative Places Growth Fund has seen six English regions outside of London (Greater Manchester, Liverpool City Region, the North East, West of England, West Midlands and West Yorkshire) allocated £25m each from the UK Government to grow their creative industries.

Scotland, Wales and Northern Ireland will get more from the UK Government – but most culture spending will be decided separately

Outside of England, most decisions on public spending for the arts and culture are taken by the devolved administrations. They receive block grants from the UK Government, based on the ‘Barnett formula’, as well as targeted funding.

As a result of this Budget, grants to the devolved governments will increase above the settlements outlined in June’s Spending Review.

🏴󠁧󠁢󠁳󠁣󠁴󠁿 The Scottish Government will receive an additional £510 million resource funding and £310 million capital funding.

🏴󠁧󠁢󠁷󠁬󠁳󠁿The Welsh Government will receive an additional £320 million resource funding and £185 million capital funding.

🇬🇧The Northern Ireland Executive will receive an additional £240 million resource funding and £130 million capital funding.

The UK Government confirmed £783 million for “a new local growth programme over three years to support regeneration across Scotland, Wales and Northern Ireland”. This is a new fund, distinct from the UK Shared Prosperity Fund.

We will find out how exactly the devolved governments’ culture spending will change in 2026-27 when their draft Budgets are published over the coming weeks. Check back on the Campaign for the Arts website for more analysis then!

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