The Hodge Review of Arts Council England (ACE) is a wake-up call for the UK cultural sector. Its recommendations are clear: commercial income is no longer a side project or optional extra — it is now central to the sustainability and growth of arts organisations. For members, this is both a challenge and an opportunity. The sector must embrace entrepreneurial thinking, develop sustainable revenue streams, and position itself for the next decade of cultural innovation.
Firstly, as with all other commentators, the Hodge Review is clear that the government should retain the Arts Council, but “must maintain and strengthen the Arm’s Length Principle at all levels of government to ensure that arts funding is protected from politicisation and the Arts Council must rigorously uphold that principle.”
One of the most significant recommendations of the Hodge Review is the creation of a trading arm within Arts Council England. This trading arm would allow ACE to operate beyond traditional grant-making. In practice, this could mean that profits, royalties, and returns on successful projects could be reinvested into the sector, creating a sustainable funding cycle that complements public funding. This recommendation signals a fundamental shift in policy thinking: commercial income is now considered infrastructure, not an optional extra.
There is a clear message that expertise in revenue generation, trading models, and investment-ready strategies is no longer a niche skill, it is essential. Organisations that can develop commercial projects, manage partnerships, and generate earned income will be better positioned to thrive under this new landscape.
The review also stresses the importance of sponsorship. It states, “Boycotting sponsors of the arts and culture will often be more damaging to the arts than to the sponsor. Challenging boycotts can be difficult, but ACE has a leadership role to play in setting the parameters of what is and is not acceptable behaviour.” In other words, corporate sponsorship is critical to sector resilience, and ACE must provide leadership in guiding ethical and sustainable engagement. Sponsorship is no longer just a financial resource; it is a strategic tool that must be managed intelligently and consistently.
Another recommendation addresses the issue of international tourism and access. If national ID cards become widespread, free national institutions could consider charging international visitors.
The review also calls for a full replacement of the Let’s Create strategy. The new strategy would focus explicitly on resilience, impact, and accessibility, embedding financial sustainability into the core objectives of Arts Council England and the organisations it supports. Alongside this, there is a recommendation for an entirely new funding model for National Portfolio Organisations (NPOs). Grants alone are no longer sufficient, and long-term financial planning must return to the sector. The report recommends increasing the NPO funded cycle from the current three years, to five, for example, as well as the creation of a Museums Strategy. This creates space for organisations to innovate, take calculated risks, and invest in sustainable business practices.
Taken together, these recommendations present a systemic reset for the cultural sector. The Association for Cultural Enterprises is uniquely positioned to lead this transformation by sharing expertise, developing best practices, and advocating for effective commercial strategies across the sector.
Key Implications
- Commercial Income as Core Strategy: Organisations must now view earned income and trading activities as fundamental to their business models, including the Arts Council itself. This includes developing new revenue streams, partnerships, and commercial projects that align with mission and audience engagement.
- Sponsorship Leadership: Managing and protecting corporate partnerships is vital. Members should develop frameworks and guidance to navigate reputational risks and ethical considerations while maximising the value of sponsorship.
- Innovation in Pricing and Access: The recommendation to charge international visitors while maintaining free access for UK residents highlights the need for thoughtful, strategic pricing models. Organisations should explore how targeted income can enhance sustainability without compromising accessibility.
- Investment-Ready NPOs: With a new funding model for NPOs, organisations must be able to demonstrate financial resilience, strategic planning, and capacity to generate diversified revenue. This encourages a shift toward hybrid funding models and entrepreneurial thinking.
- Leveraging ACE’s Trading Arm: As ACE itself moves into commercial operations, members have an opportunity to engage with new financial products and investment mechanisms, while the bureaucracy of ACE’s grants is simplified.
Melanie Lewis MBE, Chair, Association for Cultural Enterprises said, “The Hodge Review lays down a stark challenge: the status quo will not sustain our cultural ecosystem. By placing entrepreneurialism, diversified income and commercial rigour at the heart of how arts organisations think about resilience, it acknowledges what those working in cultural enterprise have been saying for years: public subsidy alone is no longer enough.
“The centre of future policy needs to be commercial alongside the creative as equals. Sustainability depends on stronger trading models, smarter partnerships and a more confident approach to sponsorship and private investment. This is not about moving away from public funding, but about using it more effectively to unlock long-term impact.”
Paul Griffiths, Chief Executive, Association for Cultural Enterprises said, “The Hodge Review confirms what many in the sector already know: cultural enterprise is no longer a ‘nice to have’ – it is central to long-term sustainability. This is a serious moment for Arts Council England and government to back entrepreneurial thinking, commercial resilience and responsible partnerships — and for the sector to step forward with confidence and ambition.”
The Hodge Review sets out a bold vision for a UK cultural sector that is resilient, entrepreneurial, and financially sustainable. For the Association for Cultural Enterprises and its members, the message is clear: commercial income and business-savvy operations are no longer optional; they are essential. By embracing trading opportunities, sponsorship frameworks, innovative pricing, and hybrid funding models, the sector can build a stronger, more resilient future for arts and culture.
This is a pivotal moment for cultural enterprises. Our members have both the expertise and the platform to lead the sector in adopting these changes, shaping a sustainable, innovative, and commercially confident cultural landscape in the UK.
