A digital arts charity in Lancaster has announced its decision to close, saying it cannot continue in the current financial climate.

The Folly Trust, which in 2011/12 received a grant of £142,486 from the Council, missed out on Arts Council England funding last March, and as a result, the trustees plan to wind the charity up by the end of August.

Peter Connor, chairman of the board of trustees, thanked the staff, funders, artists and participants and said: “We are confident that Folly’s legacy, reputation, impact and thinking will live on. Folly’s board of trustees, CEO Taylor Nuttall and his staff team are now bringing Folly’s operation to a close in a dignified manner.”

Founded in the North West in 1989, Folly provided creative arts projects using technology and worked in partnership with other organisations in the area.

The government reduced the Arts Council’s budget by £100m after last October’s Spending Review and as a result more than 200 organisations had their funding completely cut while others were awarded less than previous years.