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The Museums, Libraries and Archives Council, which will close by March 2012, has notified all employees that they are "at risk" of redundancy and started a four-month period of formal consultation.
The MLA also warned library bodies that the process for deciding future grant funding remains to be agreed, and they should stay "prudent" in the meantime.
Culture Minister Ed Vaizey announced last week that many MLA functions are likely to transfer to Arts Council England (ACE). "Until confirmation of that transfer is received MLA has to act within the parameters of what is certain - that it will cease operating during 2011 and close by early 2012," the MLA said in a press statement.
Detailed discussions will take place between the MLA, ACE and the Department for Culture, Media and Sport "during the next few weeks" to confirm the process for organisations to apply for grant aid and the timetable involved, it added.
Chief executive Roy Clare said: “We would have hoped for more certainty and much sooner. Nevertheless I am now optimistic that key functions will transfer to the Arts Council and we will hear so soon."
He added: "I know that organisations who receive support from the MLA are suffering from the current uncertainty surrounding their funding – we are doing everything we can to resolve this in the near future, but these bodies also know they too have to stay on the safe and prudent side in the meantime.”