Memorandum submitted by the Sheffield
Galleries & Museums Trust
Sheffield Galleries & Museums Trust believes
that in any debate about the future funding of museums in England
the Committee should give serious consideration to encouraging
the trust model as the provider of local authority museum services.
This has already been championed by Sir Nicholas Goodison in his
recent Treasury Report.
We believe that there are distinct advantages
to the museum and to the local authority in terms of public value
and efficiency and that Sheffield Galleries & Museums Trust
is proof of this assertion.
DCMS now has a direct interest in the good management
and efficiency of the local authority museum sector through the
renaissance in the regions programme. As this programme reaches
fully funded maturity (by 2010 we hope) further public benefit
can only be extracted by better structural, constitutional and
management efficiencies, and we would argue that this is only
possible through entrustment.
If this is accepted then there is urgency in
championing this solution if gains are to continue to be made
in the post 2010 period. It can take up to five years to maximise
the benefits of trust status and therefore incentives need to
be devised quickly to persuade councillors and officers in time.
Below is a brief summary of the benefits of
trust status, both from the position of the Trust and the Local
Authority.
Also enclosed is the Sheffield Galleries &
Museums Trust Annual report for 2003-04 which includes on page
28 an appraisal of the rapid development of the Trust.
THE TRUST
MODEL
Understanding the model
The trust model is a vehicle for out-sourcing
the management, service improvement and investment in publicly
owned assets and operations.
It is not an abrogation of public responsibility
as the Council is always the guarantor of last resort, particularly
where they retain ownership of the assets. Nor is it a cost cutting
exercise per se, as the key to the success of a trust is that
it is able to invest to generate income, which in turn lowers
the unit cost of the service. As a more efficient and effective
delivery vehicle a Trust can be more productive and responsive,
generating greater public value and benefit.
Sheffield City Council has at least 10 years
experience of "trustification" and has pursued an active
strategy of securing the management of its cultural and sporting
assets through a series of Trusts. Currently, there are four Trusts,
covering Museums and Galleries, Theatres, Industrial Heritage,
and Major Sporting Facilities. This is the most extensive network
of such Trusts in the country, and the City could be described
as a market leader.
As a management tool it is not applied uniformly,
each trust being set up to have varying degrees of ownership and
control depending on the nature of the service offered.
The rationale behind a Trust model is based
upon a number of specific issues:
Financial Efficiency
The Trust model does bring with it financial
efficiency, partly as a result of charitable status, partly because
of a freedom from local authority rules and regulations and partly
because a trust is able to create a business model of oversight,
operation and management.
The financial advantages of putting facilities
under Trust management give an impetus for change but should not
be the main driving reason for adopting this model as the benefit
is essentially short term. A fixation on cost reduction and financial
efficiency is a poor basis for a constructive relationship. It
is also unlikely that any independent trustees of a new trust
would accept a situation where the City "dumped" its
financial problems on a new organisation increasing the personal
risks for any trustee.
It is important that the local authority is
clear about the long-term benefits of entrustment both to the
Trust and to the Council. This is because after the initial separation
of roles and responsibilities the Council has to engage in a constructive
and positive relationship with the new trust, seeing it as part
of an extended family not a challenge to the old order.
Flexibility and agility
This advantage would apply to any organisation
standing outside what is in effect the mainstream bureaucracy.
There are a number of benefits. As a smaller employer there are
less issues to consider relating to, for instance, complex terms
and conditions and intricate staff structures, and fixed costs
can be kept lower through careful management of remuneration systems.
In addition, the trust model has at its core
a board of trustees who have as their sole aim the solvency and
success of the trust and a management team recruited to achieve
this aim. The much wider considerations and reporting structure
incumbent on a local authority cabinet member and officers makes
swift action much harder.
Leadership and focus
The sector-specific trusts have a much greater
ability to focus on the key issue for them. By way of example,
a museum and gallery service within a local authority will be
at best a second, third or fourth tier unit within a larger department
within an even larger bureaucracy. It will at all times therefore
be subject to the vagaries not only of competing priorities for
resources, but also competing priorities for management attention.
Therefore, whilst the intention may be honourable, the practice
is often to the disadvantage of the specific sector.
This has a depressive effect on the quality
and influence of the managers of museums and also of their position
and remuneration. It is very unusual to find well paid local authority
museum leaders with clear and beneficial access to the Chief Executive
or Leader of the Council. However, Trusts are able to provide
not only a challenging but remunerative leadership position and
also access to the top of the Council denied to the local authority
museum officer.
Trusts are created to have a single focus and
a single purpose. They are designed deliberately to be "professionally
selfish" for their sector. This leads to demands, particularly
of the local authority, for more of their attention and resources
than would have been the case if it were retained in-house. As
a result, the entrusted sector does get a better deal. This can
become quite acute if a number of trusts are created, establishing
a cohort of independent Chief Executives where before there were
just a few in-house leisure managers.
In return, trusts, although numerically small,
can add significantly to the professional cultural management
and leadership capacity within the City and bring to the City
a civic plurality that can stimulate and generate creative ideas
through debate and challenge, enhancing the capacity of the city
to evolve and progress.
This is also true of the trustees, who are highly
skilled, networked and determined. Most reviving cities need to
become more plural in their leadership and trusts and trustees
are a way of engaging with, and getting the buy-in of powerful
people capable of adding civic value, expertise, contacts and
funding to regenerating the urban environment.
Management challenge
Successful Trust/Council relations set aside
the financial cost cutting agenda and savings mentality in favour
of a strategic relationship that is defined by public value, benefit
and worth since the council only gains if the trust delivers better,
more efficient services. Conversely, the Council loses if the
trust fails as being the guarantor of last resort, it would have
to pick up the cost and the problems associated with failure.
It is clearly in the Council's interest, once
entrustment has taken place not to walk away from the creation
they have spawned, and not to let short term or single-issue arguments
cloud the strategic vision.
Entrustment can be a hard road as any trust
will want and expect to establish a separate identity and brand
commensurate with their distinctive remit and charitable company
status. Any trust board will not serve if they believe they are
ciphers for the Council.
This can often mean giving up more power or
control than originally envisaged, and smiling through discord.
There needs to be a commitment at a senior level, often at Chief
Executive/Executive Director level, that despite specific disputes
or clashes, their duty is to maintain the positive strategic relationship.
Finally, it is worth noting that it can take
at least five years to get a trust up and running and therefore
the council is in for the long haul. It is also apparent that
once entrustment takes place it is increasingly difficult to reverse
the situation as the Trust becomes ever more distinct financially,
in public profile, in personnel terms and in working culture.
To conclude, the best and most valuable outcomes
are not financial but civic health, public value, a sense of purpose
and focus on the user.
September 2006
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