Liverpool Vision, the economic development agency, is to receive £1.75m from Liverpool City Council to continue its work, the authority confirmed as it revealed its cost-cutting budget.
The council, following suit with other authorities around the country, will make cuts across the board including to libraries, leisure centres and youth services in a bid to save £91m in 2011/12 and £50m in 2012/13.
Liverpool Vision, which has already been reorganised under the new Labour administration in Liverpool, its property development team moving in-house at the council, will receive the £1.75m for its remaining enterprise, inward investment and job creation remit.
There will be a reduction in the number of arts and other large events funded by the council, but the music-themed Mathew Street festival in August and Hub festival for young people, along with the River Festival, Slavery Remembrance Day and Chinese New Year funding remains "secure for the next year".
In a week that has already seen the loss of the Liverpool Boat Show and closure of the A Foundation art gallery, the £1.8m reduction in arts and culture spending will cause residents to question again the legacy of the European Capital of Culture in 2008.
The number of senior managers in the council has been cut from 91 to 43 this year, reducing the wage bill by £4.5m. The budget for consultants and agencies has been slashed by 60%, a saving of £6m. Back-office functions including legal and financial departments have seen a minimum of 28% savings.
The council said long-term contracts with firms such as highways and infrastructure specialist Enterprise and the IT joint venture with BT have also "squeezed efficiencies from their contracts and the savings reduced have helped bridge the budget gap".
The draft budget will go to Cabinet on 25 February and full council on 2 March.