The Department for Culture, Media and Sport (DCMS) has confirmed it will reduce expenditure by £88m in 2010-11 as part of government spending cuts totalling £6.2bn.

Departmental savings plans will lead to a 3 per cent cut in its core budget and a 3 per cent reduction to sector agencies. The Olympic Delivery Authority (ODA) will also see its budget reduced by £27m. Meanwhile, a further £5m is set to be cut from Arts Council England's (ACE) budget, although the DCMS will work with the organisation to allow it to access historic reserves to help mitigate the reduction.

Culture secretary Jeremy Hunt said: "I have asked our bodies to make these savings while protecting frontline services wherever possible, and without interrupting the Olympic programme. "I will be doing all I can to help our sectors through the next few difficult years, and want to do all I can to ensure that never again are our sectors as vulnerable to sudden booms and busts in public funding."

ACE chair Dame Liz Forgan revealed that the organisation could not guarantee there would be no impact on frontline services in the wake of the DCMS announcement. Forgan said: "Only £23m of our overall grant-in-aid budget goes on running costs so the vast bulk of our income goes straight to art. It would therefore be impossible to meet a cut of this size from running costs alone.

"Use of our historic reserves, which the Department has not allowed us to use to date, will have to be agreed with our trustees and the Charity Commission and their use will need to be in the best interests of the arts." However, ODA chair John Armitt told the BBC that he was confident the authority will be able to save £27m over the coming year without affecting preparations for the 2012 Games.

Armitt said: "Our regular budget updates have consistently shown that we are on schedule and within budget with savings of around £600m already delivered to keep us on track." Elsewhere, chancellor George Osborne and chief secretary to the Treasury David Laws announced plans to save £270m by scrapping "lower value" spending by regional development agencies.

An additional £600m is expected to be cut from the cost of quangos, although £150m will be invested in 50,000 new apprenticeships as the government aims to tackle the deficit and encourage growth. News of the DCMS' planned spending cuts comes days after Jeremy Hunt announced that the arts, heritage and sports sectors are set to receive an additional £50m funding each year.

Hunt said new legislation is to be introduced in order to increase the share of National Lottery funding directed towards each sector to 20 per cent by 2012-13, once the diversion of funds towards the London Olympics ends. Image: Jeremy Hunt - Conservative Party/Paul Toeman