The use of public money by Arts Council England (ACE) will be reviewed by the Government.

The Department for Culture, Media and Sport (DCMS) announced on Friday that Dame Mary Archer, the wife of Lord Jeffrey Archer and former chairwoman of the Science Museum Group, will lead the review.

It will also examine if the body can carry out cost savings of 5%, which is standard for this type of work, according to DCMS, and assess if ACE-funded projects are “ambitious and of high quality”.

Arts and heritage minister Lord Parkinson said: “For more than three quarters of a century, the Arts Council has been one of our most important national institutions, ensuring that life-changing arts and culture is available to everyone, free from political influence from the government of the day.

“This Government has demonstrated its strong commitment to supporting a thriving arts sector – with a record number of organisations, in more parts of the country than ever before, benefiting from the increased public funding we have made available to Arts Council England.

“This review will help us to ensure that it is spending that money effectively, so that its important work can transform as many lives as possible.”

This will be the first review of ACE since 2017 and Dame Archer will be aided by an advisory panel.

Dame Mary said: “It is a privilege to lead this review because the work of Arts Council England is so important to us all. It enriches our lives, enhances our individual wellbeing and maintains our national reputation for excellence across the arts and creative sectors.

“I look forward to working alongside my expert advisory panel, and listening to a wide range of voices, to help Ace to deliver its vital mission.”

The Cabinet Office’s cross-government public body reviews programme carries out examinations on publicly-funded organisations routinely.

Culture Secretary Lucy Frazer said: “In theatre, music, painting, sculpture and many more artforms, the UK is a world leader, with creativity sitting at the core of our identity as a country.

“This review will help ensure that Arts Council England is driving creative excellence in the arts by funding ambitious projects of the highest quality.”

An expert panel of 14 people from sector, including deputy chairman of the BBC’s board Sir Damon Buffini and arts consultant and Labour peer Baroness McIntosh of Hudnall, will sit on the advisory panel.

ACE chief executive Darren Henley said the body had been preparing for the review and will engage “positively”.

He also said: “The Public Bodies Review gives us a welcome opportunity to show how we’re delivering our 10-year strategy, Let’s Create, by supporting artists, arts organisations, museums and libraries as they create ambitious, high-quality work for audiences and communities in villages, towns and cities across England.

Last month, ACE confirmed that it will not remove funding from makers of political work following a backlash against changes to its relationship framework.

The body had warned venues and performers about work that touches on politics and activism.

“Art is often political, and many of the organisations we invest in present work that is thought-provoking and raises uncomfortable questions,” the body’s document says.

“We believe this to be a right and proper use of public funding.

“Freedom of artistic expression is a foundational principle in this country, and one that we are committed to champion and defend.”