The Arnolfini has been dealt a heavy financial blow by the decision of Arts Council England (ACE) to withdraw its funding of £750,000 per year from 2018.

A stalwart of the ACE portfolio for 13 years, the harbourside gallery was notable for its absence in the list of Bristol arts organisations set to receive money from 2018, as it was judged to be ‘not viable’ in its current model.

The sound of children’s voices rang through the Arnolfini the day after the news broke, as people of all ages moved throughout its floors, taking in the displays, chatting, seeking refuge, or simply sitting and reflecting – blissfully unaware of the financial troubles that could threaten the future of the free contemporary arts venue.

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“I come here all the time,” said one visitor taking time out on a bench in the foyer of the gallery that has been a landmark of the harbourside since it was founded in 1961.

Southville resident Jozie Bush was visiting with her three-year-old daughter Eliza and praised the Arnolfini as an ‘amazing free arts centre that’s accessible for everyone.”

But beneath the surface, the Arnolfini has been mired in financial troubles and ACE’s new chairman, Sir Nicholas Serota said that, while he greatly admired the work of the gallery, it had been forced to ask for extra funding in recent years and the Arts Council can’t go on “staunching losses in that way.”

The Arnolfini has expressed disappointment over the decision, but has declined to comment further at this stage on what this latest blow means for its future in the city.

Phil Gibby, ACE’s area director, said, “We have been pleased to support Arnolfini over the last 13 years. We will continue to maintain an open dialogue with them about their work and how we might be able to support their future plans in the coming weeks.

“When creating a balanced portfolio of funded organisations we had to make some difficult decisions about how to invest our limited resource. We were, therefore, not able to fund a number of organisations, including some organisations which have been part of our national portfolio in the last three years.

“We recognise the impact this decision will have and have set aside £3.3m over four years to invest in a bold new future for visual arts in Bristol for the long term.”

A spokeswoman for the Arnolfini said they would welcome the opportunity to be a part of the conversation on the future of the visual arts in Bristol and look forward to working with colleagues, funders and peers over the coming months.

Stopping for a coffee in the cafe, Amy Stewart, from Clifton, says she comes to the Arnolfini a lot as there is always something new on and it is often an exhibition that you wouldn’t find anywhere else. Cotham resident Giles Lingwood agreed the range of exhibitions open up the arts to everyone.

But there has been wider talk about inclusivity of arts across the city and speaking at a council meeting this week, Mayor Marvin Rees said the cultural offer is not just about events in the city centre amid calls for organisations to do more to reach out to all communities across the city.

Serota has said he doubts the decision will mean the end of the Arnolfini and added that he has great faith in new director [Claire Doherty].

Read more: Bristol arts organisations celebrate funding