A council-run arts festival is set to be significantly scaled back after a decision to stage dozens of community and cultural events at the height of the recession resulted in a loss.

A council-run arts festival is set to be significantly scaled back after a decision to stage dozens of community and cultural events at the height of the recession resulted in a loss.

South Norfolk Council's inaugural Festival of the Arts saw more than 5,800 residents and holidaymakers attending 21 council-funded concerts, theatre performances, exhibitions, and family activities last summer.

But the local authority is set to drastically reduce its cultural programme this year as a result of savings, which have seen the Conservative controlled district council cut �2m out of its budget and shed 40 jobs.

A new report, which will be discussed by members today, has revealed that the Festival of the Arts, which included big events such as the Midsummer Chillax at Whitlingham Country Park and Abraham Lincoln enactment at Hingham, cost the council �74,000, but only generated an income of �34,500.

Officials at South Norfolk Council are recommending only organising 'two or three' key events and some outdoor theatre performances this summer because of tighter budgets and less staff.

But leader John Fuller said the council had been justified in putting on the festival and some of the events had exceeded expectations.

He added that the authority's continuing service merger talks with neighbours Breckland Council could result in two arts programmes being brought together under a 'southern Norfolk' festival.

'Last year was the first Festival of the Arts and we had to start the ball rolling by running a number of events ourselves. Having established the brand, it is a platform for voluntary groups to pick up the ball.'

'Last year more people stayed at home because of the recession and we wanted to give them and those coming to Norfolk something to do and we did a lot of youth focused events so youngsters were not hanging about on street corners,' he said.

A report by Mike Nott, head of partnerships and performance, said the district council attracted �17,000 in sponsorship and funding for last year's festival and an estimated �97,000 was injected into the local economy by people attending the programme of events.

The Whitlingham Trust, TW Gaze in Diss, the 100th Memorial Bomb Group Museum at Dickleburgh, Upper Waveney Sculpture Meadow in Brockdish, and Forncett Industrial Steam Museum have expressed an interest in holding future events, he added.

Murray Gray, leader of the South Norfolk Liberal Democrat group, said he believed the festival had been a 'huge success'.

'I would like it to continue, but given the reality of the economy it will probably be on a smaller scale and we are not sure how it will be delivered with less staff,' he said.