The report - prepared by a panel of experts - adds that the organisation must develop its role as champion for the arts within and outside of Government, demonstrating the value of public investment.

Welcoming the publication of the report, Culture Secretary Tessa Jowell said:

"The Peer Review report has many positive things to say about the work of the Arts Council and their management of the massive investment we have made in the arts since coming to power in 1997.

"It also sets out clearly the challenges ahead. The Arts Council now needs further to enhance its role, to strengthen connections with its artistic and wider constituency and to become - even more - the force in the cultural community we all need it to be.

"I welcome publication today by the Arts Council of its action plan taking forward the recommendations of the report. I will be watching progress on this closely."

Notes to Editors

The Peer Review of Arts Council England (ACE) was undertaken during July 2005 by a team led by Genista McIntosh (Baroness McIntosh of Hudnall). The full report and the Arts Council England action plan in response is published today on the Arts Council website at:  www.artscouncil.org.uk/peerreview

In preparation for the report, the team undertook an extensive range of interviews, as well as holding three workshops with ACE staff and considering responses to a written consultation exercise.

The Department for Culture, Media and Sport (DCMS) has so far supported peer reviews of two of its sponsored bodies, Arts Council England and the Museums, Libraries and Archives Council. The peer review programme is one of a number of DCMS initiatives aimed at helping sponsored bodies improve their efficiency and effectiveness. Among the advantages of peer review are that it is independent and that the sponsored body and the Department work in partnership during the review and the follow-up phase.