English National Opera is facing fresh financial difficulties, having posted losses of £2.2m during 2011-12 - up from losses of just £55,000 the previous season. The company’s free reserves are now down to a mere £1m. The situation highlights the difficulties facing all UK arts bodies following cuts in government culture spending of 25 per cent in 2010.

The company is blaming cuts to its Arts Council funding and inadequate ticket sales for the losses, claiming its financial situation reflects the reduction ‘in Arts Council core grant income over the previous year and lower than anticipated box office revenues in a challenging economic environment’. Despite this, the company has continued to achieve ‘high artistic and musical acclaim across its programme,’ it says.

Arts Council England’s core funding for ENO was approximately £17m in 2011-12 – a reduction of £1.3 million on the previous year. During the last season ENO’s audiences were at 71 per cent capacity – nine per cent lower than the previous year.

The company has faced several periods of financial difficulties over the years, most recently in 2007, which resulted in a programme of cuts and bailouts from the Arts Council. However, ENO will not be able to rely on ACE’s backing on this occasion.