There are concerns that cultural activities in London could suffer as a result of London Councils changing its grant programme so that many services are provided on a local, rather than a regional, basis.

London Councils, a thinktank which runs some pan-London services, currently spends about £3.14m a year on culture, tourism and the 2012 Olympics. This money is raised from the individual boroughs and is allocated through a grants programme to voluntary sector projects across the capital.

Following a consultation, London Councils has categorised some services as local. As a result, responsibility for funding them will pass back to boroughs from June.

Mayor of Hackney Jules Pipe, who is chairman of London Councils’ leaders’ committee, said: “Borough leaders have agreed a managed transition when it comes to the remaining services. This will allow them more time to establish which services they should continue to fund and give them flexibility to decide what will work best in their own local areas.”

But there are concerns that culture and arts organisations will suffer as a result because there is no statutory obligation for councils to continue funding them.

A statement from the National Campaign for the Arts said: “This is an unwelcome development, as a degree of funding provided at a strategic, city-wide level can protect against the worst of individual council budget cuts.”

In a response to the proposed changes to the grants scheme, Iwona Blazwick, director of the Whitechapel Gallery and chairwoman of the London Cultural Strategy Group, said it made “good business sense” for boroughs to pool their resources to achieve pan-London objectives.

“Sustained funding for cultural activities will best ensure that there is a balance and rich cultural offer distributed across the city and will address the considerable disparities that currently exist,” she added.