The Department for Culture, Media and Sport announced a reduced three-year funding settlement for VisitBritain, the national tourism agency.

The funding level will be £47.6 million in 2008/09, £45.1 million in 2009/10 and £40.6 million in 2010/11.

This compares with the current grant in aid of £49.6 million.

Christopher Rodrigues, chairman of VisitBritain, expressed real disappointment at the overall settlement level, particularly following ten years of static funding and the most challenging summer for tourism since 2001.

“Global tourism is increasingly competitive and the tourism industry will have to fight hard if Britain is to retain its place in the global tourism league.”

“The Government has chosen to increase funding for our cultural institutions which form a large part of this country’s draw for visitors. Whilst this is laudable, the offer of free entry to museums and galleries will not in itself persuade most international tourists to come to London instead of Paris, New York or Hong Kong.”

“This settlement also reduces the funding available to promote England at home and overseas. We will need to become even more efficient in the marketing partnerships we have with the travel industry and the regions and nations to plug the gap this settlement has created.”

Rodrigues welcomed and accepted the request by Secretary of State James Purnell to lead a review of how to improve the coordination for promoting the industry within the devolved framework for tourism and in the context of the new funding settlement.

“We welcome the commitment from the Minister to this review, which should lead to the more efficient and effective deployment of resources across the multiple public and private stakeholders involved in the tourism industry.”

Commenting on the current lack of additional funding to support the national strategy to maximise the tourism benefits of the London 2012 Olympic Games and Paralympic Games, he said: “I am pleased that the Secretary of State has recognised VisitBritain's key role in delivering the 2012 tourism legacy and is committed to reviewing the resources available for VisitBritain to work with the private sector as we get closer to the 2012 Games.”

He stressed that the agency remained committed to developing public and private funding sources to take advantage of this “once-in-a-lifetime opportunity to use the Games to showcase Britain.”

Tom Wright, Chief Executive said that VisitBritain would continue to adapt to the changing and increasingly digital environment and would aim to complete the review by spring 2008.

He said: “VisitBritain is a high-performing, award winning agency.  Our recent modernisation programme has enabled us to reduce infrastructure costs significantly and to free up additional funds for front line marketing. This reduced settlement means we will need to work ever more closely with our marketing partners to deliver the growth potential of this £85 billion industry.”