The NAO investigated the 15 biggest projects funded by the Arts Council using lottery money, including the controversial pounds 78m Royal Opera House redevelopment. It found that 12 were over-budget, only half would be completed on time, and half had had to go back to the Arts Council for more money to complete their plans.
Many of the Arts Council projects, which cost a total of pounds 318m, are as financially unstable as they were before the money was spent, it found.
David Davis MP, the chairman of the Commons Public Accounts Committee, plans to bring the Arts Council's senior managers before his committee to explain why so many of its projects have gone wrong.
"The Arts Council has been a soft touch," he said. "Almost all the projects are over-budget and half are running late, some by more than a year. It appears all too easy for grant recipients to go back to the Arts Council for top-up grants when they find they run short of cash."
Mr Davis said it appeared that the Arts Council's weak monitoring of projects meant much of the money looked at by the NAO had been wasted. "I am extremely concerned about the financial sustainability of some projects. There is a real risk that ultimately lottery funds may have been used to no long-term effect at all. They may end up with some nice buildings, but if the arts bodies cannot sustain themselves, their buildings will sit empty," he said.
The Royal Opera House, which has struggled with successive financial crises over the past four years, was the centre of a political storm during the last Tory government when its pounds 78m grant was one of the first uses of lottery money.
What has now emerged is that the Royal Opera House was given the grant after claiming it would be able to balance its budgets with a refurbished home, then admitted once most of the money was spent that it would still lose pounds 2m a year.
Alongside a grant to buy Winston Churchill's papers from his grandson, the Royal Opera House award was seen by some as an elitist misuse of lottery funds. Mr Davis is worried that the poor use of funds by the biggest projects, half of which are in London, leaves less money for other schemes around the country.
The NAO has told the Arts Council it has to be "more vigorous" in monitoring the building work it pays for, and to toughen up its responses to requests for more money. In the case of the Royal Opera House and the Royal Court Theatre, the Arts Council allowed funding to continue, despite both organisations' failure to meet conditions laid down by the council to safeguard against financial risks.
The Arts Council, which had approval of the NAO report's contents, welcomed the report. In a statement, it said: "We accept its recommendations, and we have already acted on or are acting on all of them. There is welcome recognition in the report that the Arts Council has, from the onset of the Lottery, adopted a pro-active approach to monitoring lottery projects."
- More about:
- Arts Council Of England
- Department For Culture
- Gambling & Lotteries
- Media And Sport
- Royal Opera House