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Over the next four years, the council will invest on average an annual £50.1m in 142 organisations based in rural areas.
It says the move will strengthen the cultural sector in rural England.
The funding will narrow the gap in funding between urban and rural areas.
It will increase the council's investment in its National Portfolio Organisations based in rural areas by 12% – compared to an 11% increase for the portfolio as a whole.
The national portfolio includes organisations across England of all sizes and scales, with museums and libraries coming into the portfolio for the first time.
Describing it as an ambitious investment, the council said the funding would offer art and culture to more people and more places than ever before.
Arts Council England chairman Sir Nicholas Serota said: “Everyone deserves the chance to experience the sheer enjoyment, creativity and new horizons that culture can bring.
“We set out to deliver a significant increase in our investment outside London. We’ve done that, without detriment to the internationally renowned cultural offer of the capital.
“Alongside continuing support for our great national companies, we’ve funded inventive, pioneering arts organisations and a new range of museums across the country.
“We’ve also included libraries producing high quality cultural programmes.
“Working together these organisations will inspire a broader range of young people and audiences across England than ever before.”
The arts council says people living in rural areas make up 17% of England’s population, engage more with the arts than people in urban areas, and are just as likely to engage with museums.
In the current investment round from 2015-18, 120 (18%) of the council's national portfolio organisations are in a local authority area defined as rural.
The council says touring is an important way to support rural cultural opportunities
"Our investment helps rurally based organisations improve their resilience in the face of particular challenges, such as increased transport costs or broadband accessibility," it says.
Organisations funded by the council for the first time with a significant impact in rural communities include Somerset Art Works, the Jerwood Gallery (Hastings), Vamos Theatre (Worcestershire), Rural Media Company (Herefordshire), Arts&Heritage from Hexham, and Pocklington Arts Centre in the East Riding of Yorkshire.
Four library services that work with rural communities will be funded by the council for the first time. They are Libraries Unlimited in Devon, Inspire Nottinghamshire, Suffolk Libraries and Cambridgeshire Libraries.
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