THE Scottish Government body responsible for the arts and creative industries is being forced to dip into National Lottery Reserves to maintain its financial backing of Scotland's cultural sector.

Creative Scotland has said it will use portion of its National Lottery reserves to maintain support at 2022/23 levels of Regularly Funded Organisations (RFOs), including the Edinburgh International Book Festival and Publishing Scotland.

It comes after the Scottish government announced it would reduce the organisation’s funding by more than 10%.

However Creative Scotland warned that this is only a measure for the short term.

There were fears of a “hollowing out” of Scottish culture and the prospect of a “wave of insolvencies” after £7 million was stripped away from the national arts organisation for the forthcoming financial year to support RFOs for which £34m is required.

It comes as the Scottish arts sector faces aa turbulent financial situation in the aftermath of Covid-19 lockdowns and the ongoing cost of living and energy crises.

Some venues have forced out of business while others have been temporarily shuttered to the public to save money.

Screen Scotland, part of Creative Scotland has only just purchased the rights to the Edinburgh International Film Festival which with Aberdeen’s Belmont Filmhouse closed their doors as a result of the Centre for the Moving Image going out of business.

An options appraisal for a film festival in Edinburgh in 2023 is “underway”.

The work is being funded with an award of up to £97,647 from Creative Scotland, which is being drawn from the 2022/23 regular funding awards originally allocated to the CMI.

HeraldScotland: The Edinburgh International Film Festival

Screen Scotland said it anticipated that the options appraisal will be completed by the end of January, 2023, and further announcements will be made after that time.

Crisis talks were held by the Creative Scotland’s board over the hit to its current £63m budget, which it described as “extremely disappointing.”

The organisation has warned that using the Lottery funds to counteract the cuts means it will no longer be available for other areas of support.

The body also warned that if cuts continue beyond 2023/24, Creative Scotland will have to pass them on to the sector.

Creative Scotland receives over a third of its income from The National Lottery as one of the 12 cultural, sport and heritage distributors for good causes. Creative Scotland spends this money on grants through Open Funds, Screen and Targeted awards.

Creative Scotland said: "Whilst the Board fully appreciates the challenging context in which the Scottish Government has reached its decision, and the pressures that are being felt by everyone across all parts of society, we are extremely disappointed by the settlement.

"It comes at a time of significant pressures for cultural organisations due to the impact of the pandemic, rising inflation, falling income and spiralling operating costs, when the value of culture and creativity to people's lives has never been more important."

The Edinburgh Filmhouse was forced to shut in October — with over 100 staff laid off — after the charity that ran it went into administration.

HeraldScotland: There is hope that the Edinburgh Filmhouse could be saved after a vigorous campaign, but how secure are Scotland’s other cultural attractions? Picture: Jane Barlow/PA

Two high-profile recent attempts to buy and reopen the venue have not been successful.

There were 14 bids for the listed building on Lothian Road and estateagent Savills said it would announce the successful buyer in the new year.

Glasgow’s Pavilion Theatre went up for sale in September, with Ambassador Theatre Group (ATG) currently considered the “frontrunner” to buy the venue.

Just last week Creative Scotland launched two new funds as part of a reshaping of its ongoing work.

One was what it called a refreshed National Lottery Open Fund for organisations. It will offer between £5,000 and £100,000 for projects or programmes of activity lasting up to 18 months in length.

The other was a new time-limited National Lottery Extended Programme Fund which will provide between £100,000 and £200,000 for programmes of publicly available creative activity lasting between 18 and 24 months.

Once the funds opens, applications can be made at any time, with no deadlines.

Creative Scotland's existing Open Fund for Organisations will close to applications on February 8, 2023, with the new funds opening seven days later.

Creative Scotland's Open Fund: Sustaining Creative Development, had an overall budget for 2021/22 of £7m.