Arts Council England is displaying a “clear funding imbalance in favour of London”, according to a new report by the House of Commons' Culture, Media and Sport Select Committee.

The report released today said the capital receives funding that is “out of all proportion to its population” and that British taxpayers and lottery players in other parts of the country are funding arts projects in London.

Of the £3.5b National Lottery arts funding distributed by ACE between 1995 and 2013, London received £1.35b (39.1 per cent). This translates as £165 per head of population in London, compared to £46.77 per head in the rest of England, the Committee found.

The report is the result of a six-month inquiry into the scope, scale and remit of Arts Council England (ACE) as well as the economic and artistic criteria of funding decisions and geographical distribution of funding.

The Committee said that ACE must urgently restore the geographical funding imbalance if it is to “realise its declared ambition to engineer the provision of great art and culture for everyone”.

London’s access to National Lottery funding for the arts should be limited “to its proper per capita share – equal to that of the rest of England”, the report said.

The report also recommended that ACE redoubles its efforts to seek funding sources from “businesses, local authorities, local enterprise partnerships, universities and international organisations, particularly within the EU” and be “more proactive” in encouraging high-quality applications from around the country.

“There is little point in pumping public money into areas that do not particularly want or need it, or do little themselves to support the arts,” the report said.

ACE said today it welcomed the report’s findings.

In a statement released this morning, ACE said: “We understand that in challenging economic times, we must continue to demonstrate the value and impact of arts and culture investment across England. We will continue to rebalance our investment intelligently – to build capacity outside of London, whilst not damaging the infrastructure in the capital.”

Sir Peter Bazalgette, chair of ACE said: “We welcome the recommendation that the Arts Council’s grant in aid should not be reduced and agree that any further provision in future spending rounds should be prioritised to bolster the national arts ecology outside the M25.

“We share the Committee’s desire for a speedy response to the historic challenges to rebalancing. It is difficult to act urgently when our income is shrinking and it is not our job to damage what is good out there – including the thriving cultural life of our capital city.  Additional resource would certainly allow for greater flexibility in supporting our ambition to achieve this."

Bazalgette said more local partnerships would help to “build connections and broker partnerships” around the country and deliver a stronger cultural engagement.

“As we head into another election year we welcome arts and culture moving up the political agenda; helping to support cultural education and urban regeneration across the entire country,” he said.