Jonathan Mills, artistic director of the EIF, told The Herald he has been informed that his budget from the Scottish Government will be significantly reduced in the coming years.
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A 15% cut would result in the world’s most prestigious arts festival receiving about £350,000 less from the taxpayer next year.
Mr Mills admitted last night the measures would be “very difficult to manage” and would possibly mean fewer shows.
However, he said the size of the cuts were not a “doomsday scenario” and the festival would not reduce the “core principals” of its artistic ambition.
As this year’s festival prepares to get under way on Friday with a performance of John Adams’s El Nino at the Usher Hall, Mr Mills said in the coming month he would be arguing the case for its worth to society and the economy.
He said: “What we are not going to do is retreat from the scale of work that we do. There may need, for a few years, to be less of it, but what we have never done is retreated.”
Mr Mills said he would not be tempted to become more obviously commercial.
“We will still try to do edgy, interesting and challenging things, because that is what we are set up to do. We will not transform into a commercial operation -- we will still take risks.”
Mr Mills said that the festival was in a sound financial position, adding that he would only criticise cuts if he felt they were “disproportionate”.
The Scottish Government gives the festival £2,317,296, plus an extra £200,000 in Expo Funding, which is unlikely to return next year.
In February, when councils set their budgets, the City of Edinburgh Council revealed the planned reduction in its grant to the EIF, from £2.474m this year to £2.269m in 2012/13.
The National Theatre of Scotland, the Royal Scottish National Orchestra, the Scottish Chamber Orchestra, Scottish Ballet and Scottish Opera have all been told to prepare for cuts of up to 10% in their combined £24m Government funds.
“The arts are not just paying [for the recession], everyone is,” Mr Mills said. “The whole of society is paying and we shouldn’t pretend that the arts is immune from that.”