Economics News United Kingdom

Government funding cuts result in creative solutions for UK’s museums and arts bodies

English Heritage to be split into two separate organisations, while the nation’s museums will share the burden with a 5% across the board cut

UK museums and arts organisations are now facing tough decisions to deal with cuts in government funding. On 26 June, the Chancellor of the Exchequer, George Osborne, announced that the Department for Culture, Media and Sport (DCMS) would have its 2015-16 budget reduced by 7%. This was a fairly average result, compared with other government departments (some, such as health, were protected, whereas others did worse). The 7% is before inflation, so the drop is greater in real terms—and it comes on top of a series of cuts in the past few years.

Early next week, DCMS is expected to announce how it will pass on the reductions to the main cultural bodies that it funds. The most interesting news is that English Heritage, which is responsible for archaeological sites and historic buildings, will be split into two parts.

A separate charity will be established to look after the 420 historic buildings and sites that it cares for, ranging from Stonehenge to Kenwood (a mansion in north London with important paintings). These properties are to be known as the National Heritage Collection. As a charity, the organisation will have greater freedom to generate commercial income and solicit philanthropic donations.

To help establish the charity, DCMS is promising a one-off £80m payment, to be spent over a number of years. English Heritage now spends around £22m a year from its government grant on these properties, but the idea is to reduce its dependence on its total grant-in-aid, which is expected to be cut by around 10% next year.

An English Heritage spokesman says that “in due course the new charity will be completely self-financing and no longer need taxpayer support”, like Historic Royal Palaces. Of the £80m, around £16m will be spent on tackling the backlog of essential repairs.

The other part of English Heritage’s work is overseeing the listing and protection of historic buildings outside its own portfolio. This will continue, funded by DCMS, and will be known as the National Heritage Protection Service.

English Heritage’s chief executive, Simon Thurley, told us that this dual-structure idea originated with him and his staff, and was enthusiastically taken up by culture secretary of state Maria Miller. The new charity is due to be established in 2015.

Museums and arts

DCMS is also expected to confirm that the national museums will be treated equally and have their grants cut by 5% each. The British Museum director, Neil MacGregor, describes it as “good news in a tough economic climate”. The Tate director, Nicholas Serota, says that the 5% figure is “most welcome”. National museums will also receive more freedom to spend their financial reserves. However, there will be no capital grants for development projects in 2015-16.

The Arts Council is equally relieved at its 5% cut. Peter Bazalgette, its chairman, says the settlement is “a best case scenario”. The organisations that it funds, ranging from galleries to theatres, are likely to be asked to reapply for grants for 2015-16. The council will then have to decide whether to impose equal misery on all or to cut funding from a few organisations to protect the majority. The council will discuss the way forward at its next meeting in mid July.

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