Arts Council England gives out lottery money to support museums, libraries, artists and arts groups across the country through applications to its Project Grants.
The fund focuses on smaller independent organisations and individuals, with grants ranging from £1,000 to £100,000.
But with figures showing some areas get much more cash than others, think tank the Fabian Society says public arts funding should be levelled up to help an industry brought to the brink by Covid-19.
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The arts sector in Sheffield was given £1.22 million in Project Grants funding by ACE in 2019-20, the latest available data from the public body shows.
This was equivalent to £2.09 per person in the area, based on Office for National Statistics population estimates – above the average of £1.75 across Yorkshire and the Humber, the third-highest of England's nine regions.
The figures show big regional disparities in funding – London received the most at £2.94 per head of the population, while the West Midlands saw the least at just £1.20.
Nationally, £97.9 million was handed out via the scheme last year – an average of £1.74 per person.
Ben Cooper, researcher at the Labour Party-affiliated Fabian Society, said the figures showed centralised public arts funding is “not working, and is holding places back”.
He added: “There is a long-standing crisis in funding that has left community arts and culture extremely vulnerable to lockdown, especially outside London.
“The sector is critical to the Government’s levelling up agenda, especially as the country seeks to rebuild post-Covid.
“But if it’s going to thrive, it needs fairer National Lottery funding across England and devolution of power so local areas can determine how to repair the damage.”
Project Grants, which are given in response to applications, are one of three main sources of Arts Council funding, which draw on a mixture of lottery and taxpayer money.
A report published earlier this year by the group also called for the Government to require ACE to distribute National Lottery money for the arts equally across regions by 2025.
The arts sector has been hit hard by the pandemic, with continued social distancing measures placed on live music venues, theatres and galleries making any recovery more difficult.
ACE said many funding recipients based in London are national organisations which work and tour in other areas.
Laura Dyer, the body's deputy chief executive for places and engagement, said ACE wants its investment "to reach every community across the country".
She said: "This commitment is at the core of our new 10-year strategy, Let’s Create, through which we’ll continue to address the historic imbalance in funding."
Since 2018, it has invested 75% of its overall National Lottery budget outside London, while 75% of Project Grants have also gone outside the capital, according to Ms Dyer.
She added: "We are also working in close partnership with local authorities, both nationally and locally, to bring our expertise alongside their local knowledge to support investment in culture.”