Arts Council axes Carnival grant

The Arts Council has cancelled its grant to the organisers of the Notting Hill Carnival after an audit inquiry revealed that money given for last year's event disappeared without trace.

With only three weeks to go to the August Bank Holiday event, the carnival organisation faces a huge shortfall in funds because of anxieties about its accounting practices.

The Arts Council was to have given around £180,000 - 30 per cent more than last year - but now the money will be distributed directly to carnival performers, bypassing the organisers.

It has also refused to pass on over £60,000 of the £140,000 it promised for last year's carnival. The charity is

reluctant to discuss its decision but it is understood it was made after carnival organisers were unable to show where large sums had been spent.

Another big sponsor, the Greater London Authority, has held back £50,000 of its grant for last year's carnival because of concerns over the organisers' accounts.

This year the GLA is paying more than £200,000 for stewards who help provide security but it has insisted on a strict accounting regime to show how the money has been spent. The Royal Borough of Kensington and Chelsea is also contributing around £100,000.

Turmoil over the carnival's finances comes after years of in-fighting and conflict over how the event, which is Europe's biggest street festival, should be run.

In March last year there was uproar in the Afro-Caribbean community that is at the heart of carnival when the long-serving chief executive of the carnival trust, Claire Holder, was evicted from her office and summarily sacked by a rebel group of trustees.

These trustees, who were supported by the GLA and Kensington and Chelsea, went on to organise last year's carnival.

When it became clear there was dissatisfaction among some sponsors over their accounting, a new body was formed: Notting Hill Carnival Limited. This company has now taken over the running of the festival, but the Arts Council refuses to fund it because of suspicions that it has close links with the former carnival trust.

Kensington and Chelsea council says the new company has the support of the performing disciplines that create the carnival and offers the most "accountable and representative" leading body in the event's history.

"We aim to support them because, quite frankly, with just weeks until the bank holiday they are the only game in town," a spokesman said.

Ms Holder, who ran the carnival for 12 years before she was ousted, said the carnival organisation was in disarray but added: "The carnival needs all the money it can get. I think it is a pity if funds are being withheld."

Roddy Crozier Maharaj, a director of the new limited company, said that, although the organisation was keen to receive more money, this year's carnival would go ahead as planned. He said: "I would like to reassure sponsors and funders that stringent accounting practices have been put in place. All the money will be accounted for."

He added that the new company was not connected with the former trust but conceded that two of the trust's board members were now serving on the board of the new company.

He said the Arts Council would be asked again for a grant. Mr Crozier Maharaj added that, although it had appeared the Association of London Government was not going to fund the carnival, he understood the body had decided to give £45,000.

"We shall be putting in a request for that money," he said.