The majority of arts organisations fear that they will not be able to make up for the shortfall they expect to suffer in government cuts, with just one in ten predicting that fundraising income will rise in the next year.

The third review of the impact of the economic downturn on the arts sector conducted by Arts Quarter has found that 81 per cent of organisations believe they will not be able to find money to make up for government cuts, expected to begin taking effect with more force in the spending review on 20 October.

While 93 per cent of the 440 organisations surveyed for the report, published yesterday, are fundraising, slightly up on the same time last year, only 12 per cent expect their fundraising income to increase in 2011 – a far less optimistic picture than in 2009 when nearly two in five organisations believed the next year would bring better income.

In previous years declining fundraising income has been balanced with improved income from trading - such as ticket and food sales - but arts bodies are pessimistic about growth in this area too. Nearly a third of respondents expect trading income to fall, while just 13 per cent predict that next  year will bring in more earned income for their organisation.

But while the outlook for income streams is negative, with two-thirds of respondents reporting they are not confident they will be able to deliver their front-line services, 46 per cent also believe they will be able to  make operating costs within their organisations to try to mitigate the drop in income. The five most popular ideas on how to achieve this were, making core organisational savings which will not impact on public activities, cutting public programming, deferring staff recruitment, making capital expenditure cuts and making staff redundancies.

The public, meanwhile, have begun to rally behind the arts, with more than 11,000 people signing up to the National Campaign for the Arts’ (NCA) ‘I Value the Arts Campaign’ which aims to alert supporters to funding threats at their local and beloved institutions when they arise.John  Munro, campaigns manager, suggesting the effort may remain active throughout the term of the Coalition government.