APPENDIX 12
Memorandum submitted by the Imperial War
Museum (IWM)
The answers in respect of the "IWM family"
are as follows:
1. THE ORIGINS
OF THE
INITIATIVE AND
THE PROCESS
OF AGREEMENT
BETWEEN DCMS AND
MUSEUM TRUSTEES
The Imperial War Museum has five branches: the
headquarters in Lambeth Road in Southwark, now re-branded as IWM
London; IWM Duxford in Cambridgeshire, which opened to the public
in 1976; HMS Belfast for which the Trustees assumed responsibility
in 1978; the Cabinet War Rooms in Whitehall which the Trustees
have managed since it opened to the public in 1984, and for which
they became fully responsible in 1989, and IWM North in Manchester,
which opened in 2002. The branches at the Cabinet War Rooms, IWM
Duxford and HMS Belfast have always charged on the basis
that they should be self-financing. Charging was introduced at
IWM London in 1989.
Over the last twenty five years the organisation
has undergone a period of tremendous growth and achievement, based
on solid financial foundations. This has accelerated particularly
over the last ten years. During this period self-generated income
has increased from £7 million in 1992-93 to a forecast of
£24 million in 2002-03. In real terms this is an increase
approaching 200 per cent. At the same time outputs have increased
significantly. In 1992-93 the key indicator of total visitor numbers
was 1.15 million. For 2002-03 this is forecast to be 1.90 million;
an increase of over 65 per cent. However, this has to be set against
the backdrop of funding from Government. The baseline grant-in-aid
for the IWM in 1992-93 was £10.837 million. In 2002-03 it
is £11.347 million; a rise of just over £0.5 million
for the year over the course of the decade. In real terms, this
represents a decrease of over 20 per cent in one year, equal to
£2.25 million in cash terms. The cumulative effect for the
decade has been a reduction in funding of £15 million.
In addressing the initiative for free access
the Museum submitted views and comprehensive data to the Department
in September 1998, as part of an information gathering exercise.
Whilst embracing the concept, the concerns expressed then and
which have been made consistently since, are:
(a) the necessity to maintain compensation
in real terms and real time. Without proper funding the successes
of the last decade will not be able to be maintained and product
and buildings will inevitably decline;
(b) the perception of a "free visit"
is different to one which is "charged for". Free entry
is likely to mean that the visitor will minimise their expenditure
in that location which will adversely impact secondary activities
available such as retailing and catering;
(c) changes to patterns of visitation will
be difficult to predict but are likely to see shortening of visit
durations and "bunching up" at peak times, such as at
weekends;
(d) the opportunity to mount "blockbuster"
temporary exhibitions, and to levy a separate charge for them,
will vary between institutions. The IWM is essentially a story
telling museum and it is the experience of the "whole"
that the visitor seeks. Temporary exhibitions, such as Anthem
for Doomed Youth which opens next week and which features
the work of twelve First World War poets, will generate new but
specialised audiences. The opportunities to produce exhibitions
with broad and mass appeal, such as 1940's House, are much
more limited.
(e) increases in visitor numbers will increase
the running costs with more "wear and tear" on both
buildings and exhibitions.
In addition the ability to recover VAT has been
critical to the financial economy of the Museum. With daily free
periods of entry, the Museum enjoyed full recovery of all VAT
on expenditure.
The initial extension of free access to children
at all branches from April 1999, was not considered to be material
to effect this. Most children visited the IWM free for marketing
or education reasons. However further extension would have been
problematic. Various scenarios were examined to attempt to avoid
any restriction, such as allowing free periods at certain times
of the year or on certain days. Out of this the "Quids In"
policy was developed, which would see a £1 entry charge for
adult visitors and which would not jeopardise the VAT position.
This was not introduced as changes to VAT legislation in 2001
now permits full recovery to all national museums and galleries.
In addition to free entry for children, Trustees
extended this to seniors from April 2000 at IWM London only. The
Board accepted that there was some political sensitivity in declining
the opportunity of free admission for veterans/older people at
this branch, but there was no significant call for this at the
other sites.
Following the resolution of the VAT issue, the
Board accepted in June 2001 the offer from the Secretary of State
of full free access for IWM London and for the new branch, IWM
North on the basis that:
(i) The Board should reserve the right to
re-impose charges immediately if its eligibility for 100 per cent
recovery of deductible input VAT is challenged.
(ii) The Board should review the levels of
compensation at triennial intervals and reintroduce charges if
the shortfall between the compensation offered and the income
that would have been earned from charges is unacceptable.
The Board should be permitted to levy entry
charges for specific exhibitions, facilities and activities within
the Museum, whether permanent or temporary.
2. THE SCOPE
AND NATURE
OF ANY
RESEARCH AND/OR
CONSULTATION ON
THE IMPLICATIONS
OF INTRODUCING
FREE ADMISSIONS
(FOR INDIVIDUAL
SITES OR
THE SECTOR
AS A
WHOLE)
The Museum has conducted regular research through
MORI at all of its branches for many years. This is very extensive
and has enabled the Museum to have an in-depth understanding of
visitor attitudes and experiences. Results for satisfaction
of visitors have been typically at the 100 per cent level, and
those for very satisfied between 80 per cent to 90 per cent, well
above sector norms. The IWM is also a member of the Association
of Leading Visitor Attractions (ALVA), which conducts sector wide
research.
The following research has recently been carried
out at IWM London.
A. The scope and nature of research on the
implications and impact of free admissions
All data from the MORI Corporate Market Research
Survey carried out in July and August 2002.
Awareness of Free Admission at IWM London
Q. Did you know the Imperial War Museum
was free of charge before your visit today?
Q. Where did you find out the IWM (London) was free
of charge? (All visitors who knew the IWM was free)
| | %
|
| Friend, Relative, Word of Mouth | 19
|
| Newspaper | 18
|
| Television | 16
|
| Internet | 13
|
Q. To what extent did the fact that the Museum is
free influence your decision to visit today? (All visitors who
knew the IWM was free)
| | %
|
| A great deal | 20
|
| A fair amount | 15
|
| Just a little | 17
|
| Not at all | 32
|
| Don't know/not stated | 16
|
Points of interest
Only 9 per cent of visitors specifically visited the museum
because it was free. (Q. What prompted your visit to the Imperial
War Museum today?). However just under a half knew it was
free before their visit. Of that number, only 17 per cent of visitors
said it influenced their decision to visit a great deal. For 31
per cent it didn't make any difference at all.
MORI also provided us with the following information, taken
from an omnibus survey of the whole of the population of Great
Britain, not just Museum going people.
Q. As you may or may not be aware, the admission charge
at most of Britain's national museums and galleries were scrapped
last December. Please tell me which of these statements best describes
your behaviour since then.
| I know that admission charges were scrapped, and have been on a lot more museum and gallery visits this year than I did last year
| 7% |
| I know that admission charges were scrapped, and have been on one or two more museum and gallery visits this year than I did last year
| 8% |
| I know that admission charges were scrapped, but this has not affected the number of museum and gallery visits that I have made
| 41% |
| I did not know that admission charges had been scrapped
| 40% |
| Don't know | 4%
|
It appears that, for the general population, free admission
to museums and galleries has not affected their visiting patterns.
3. THE IMPACT
ON GROSS
VISITOR NUMBERS
AND VISITOR
PROFILES (FOREIGN/DOMESTIC,
LOCAL/NATIONAL,
SOCIO-ECONOMIC
GROUP, AGE
GROUP ETC);
All figures are for the period 1 December 2001 to 30 September
2002.
IMPACT ON VISITOR NUMBERS
| | Visitors
| per cent +- |
| IWM London | 567,968
| +7% |
| Cabinet War Rooms | 228,865
| =12% |
| HMS Belfast | 187,137
| =2% |
| IWM Duxford | 340,107
| -2% |
| IWM North | 195,569
| N/A |
Points of Interest
The figures for IWM London figures are only up by seven per
cent. This is because of the very popular exhibition, 1940's
House, in the previous year. As expected the Museum saw a
bigger increase in admissions in the summer months of July and
August (+19 per cent).
Other branches do not seem to have been affected by the free
admissions policy. Although figures are down, this is more to
do with the ongoing tourism problems associated with September
11, which has had a particularly adverse effect on the Cabinet
War Rooms which receives the majority of visitors from this source.
VISITOR PROFILES
| | IWM London
| HMS Belfast | Cabinet War Rooms
| IWM Duxford | IWM North
|
| AB | 47% (-4%)
| 41% (0%) | 56% (-7%)
| 44% (+1%) | 47%
|
| C1 | 36% (+8%)
| 38% (+7%) | 29% (+2%)
| 26% (-2%) | 23%
|
| C2 | 8% (-10%)
| 12% (+1%) | 10% (+6%)
| 21% (+1%) | 19%
|
| DE | 10% (+4%)
| 9% (3%) | 4% (+1%)
| 10% (+1%) | 10%
|
| Ethnicity-(White) | 95% (+1%)
| 96% (+1%) | 99% (+3%)
| 99% (+3%) | 96%
|
| London & SE | 36% (+5%)
| 36% (-4%) | 17% (+9%)
| 64% (+5%) | 69% (Nwest)
|
| Rest of UK | 32% (5%)
| 31% (0%) | 22% (+7%)
| 21% (0%) | 24%
|
| Overseas | 32% (-9%)
| 32% (+3%) | 61% (-11%)
| 15% (-4%) | 7%
|
N.B. Where totals do not equal 100 per cent, the answer
was not stated.
Increase / decrease is actual percentage point. Hence +3 per cent
means from 29 per cent to 32 per cent etc. Percentage changes
above 7 per cent are significant to counteract margins of error.
Points of Interest
Despite free admissions the profile of visitors has not changed
significantly. At IWM London the ABC1 visitor remains strong,
C2's have decreased whilst DE's have only increased by four per
cent. There are slightly more domestic visitors, which again could
be down to September 11 rather than the free admissions policy.
At IWM North the early patterns are very similar to the rest of
the organisation.
4. THE EFFECT
OF INCREASED
VISITORS ON
RUNNING COSTS
AND ON
INCOME FROM
SHOPS AND
REFRESHMENT OUTLETS
The success of IWM North, attracting 200,00 visitors in its
first three months of opening, has already seen considerable wear
and tear on the building. In addition more cleaning is needed
and extra staff are needed at peak times. Some areas already require
repainting and maintenance estimates have had to be increased
by £100,000 per annum. This also applies to IWM London where
an amount of £100,000 is required to keep galleries up to
standard, including such items as repainting, repairs, maintenance
of hands-on displays and recarpeting and renewal of flooring.
Much of this work is more expensive as it has to be done out of
hours.
IMPACT ON RETAIL INCOME
All Figures are for the Period 1 December 2001 to 30 September
2002
| | Income
| per cent +/- | Mean Spend per Visitor (SPV)
| per cent +/- | Mean Spend per Customer (SPC)
| per cent +/- |
| IWM London | £969,571
| +7% | £1.72
| 0% | £5.67
| +10% |
| Cabinet War Rooms | £322,376
| -12% | £1.43
| 0% | £5.15
| +5% |
| HMS Belfast | £189,512
| 0% | £1.27
| -3% | £3.18
| -7% |
| IWM Duxford | £782,632
| +3% | £2.60
| +5% | £5.37
| +11% |
| IWM North | £203,547
| N/A | £0.94
| N/A | £1.40
| N/A |
IMPACT ON IWM LONDON CAFÉ
| | Income
| per cent +/- | Mean SPV
| per cent +/- | Mean SPC
| per cent +/- |
| IWM London | £620,662
| +6% | £1.09
| -1% | £4.51
| 0% |
Points of Interest
On a month by month basis the results have been erratic. Overall
there has been an increase in the mean spend per customer at IWM
London but spend per visitor decreased by two per cent in the
summer months. It appears that on rainy days people come into
the Museum to escape the weather and are not prepared to spend
money. Cafe income has been maintained with little change in either
SPV or SPC. At IWM North conversion rates for visitors into customers
is low and dwell times are shorter.
5. THE EFFECT
ON MUSEUMS'
FINANCES AND
PROJECTIONS FOR
THE FUTURE
(AND THE
TERMS UNDER
WHICH COMPENSATORY
FUNDING FROM
THE DCMS IS
EXPECTED TO
CONTINUE)
For the IWM funding from this source has already been compromised,
a point that has been made to the Department on a consistent basis.
Spending Review 2000 provided compensation for children as previously
offered. However there was no recognition of the Museum's success
in attracting more visitors than forecast in 1998, when these
sums were calculated, and not even an inflation uplift was provided
for the first year. Uplifts in the two succeeding years were pegged
at 2 per cent, well below inflation and the rates at which our
admission charges have risen.
The compensation for IWM London undervalues the visitor bases
established in the final years of charging. It requires an additional
£750,000 in 2003-04 on top of the sums previously indicated
to bring us to the expectation of income to be earned had we remained
charging. For IWM Duxford, the Cabinet War Rooms and HMS Belfast,
a combined increase of £100,000 is required to maintain the
compensation to permit free access for children.
Whilst it is still rather early to draw conclusions for IWM
North, the success in generating visitor numbers produces only
additional costs issues. The policy of charging for admission
to museums meant that costs associated with increases in attendance
could be serviced from this source. This protected the underlying
investment necessary for the development of new programmes of
activity to sustain and increase the audience further. The reality
for IWM North is that the need to service current demands means
that there is nothing left to invest in the future. These funds
are needed now. Without them the credibility and reputation gained
so far will be in serious jeopardy. An investment of £200
k p.a. is sought.
The terms for the future are, as yet, unknown
6. THE IMPACT
OF THE
INITIATIVE ON
THE WIDER
MUSEUMS AND
GALLERIES SECTOR
(BOTH SPONSORED
MUSEUMS AND
THOSE INDEPENDENT
OF GOVERNMENT
FUNDING)
The impact is not easy to assess at this stage. The recent
MORI findings indicate that new visitors to museums and galleries
are not being generated in material numbers; it is the same people
going more often. This may distort the market away from other
museums which may be reliant on admissions income. There has been
some evidence of this in Lancashire this summer since the opening
of IWM North.
To achieve the aims of creating a new audience, the initiative
will require clear promotion throughout the tourism industry.
However, it is through education that the foundations for encouraging
greater numbers to visit are laid, and this is something which
should be given more prominence.
21 October 2002
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