Quoting from their 2005/6 and 2007/8 budget document ...

From 2005/06, Arts Council England has taken some organisations out of the portfolio. There are four main reasons why we have stopped regular funding:

1. We have applied the policy that we have a minimum threshold for regular funding of £20,000 per year from 2006/07 (with limited exceptions). Where an organisation makes an important contribution to the arts, it may be supported through other sources of funding, such as grants for the arts.

2. Where we consider that weaknesses in the organisation undermines the effectiveness of the funding we provide.

3. Where the restrictions on our funding has forced us to cut some organisations in order to increase the value of funding to others.

4. Where consolidation of grants will achieve more.

I suspect quite a few folk projects would be discontinued under (1) ... they're not usually all that expensive.

:-)