House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Minutes of Evidence

Memorandum submitted by the Heritage Lottery Fund

In its Memorandum to the Committee's inquiry into Protecting, preserving and making accessible our nation's heritage, the Heritage Lottery Fund outlined the breadth and diversity of the projects it has funded, and described how its significant investment in the UK's world-class heritage and its progressive approach have brought about a major shift in the sector, ensuring it is now reaching new audiences and developing new skills and ways of working.

This Memorandum focuses upon the role of the National Heritage Memorial Fund (NHMF) and the Heritage Lottery Fund (HLF) in enabling institutions to develop and care for their collections, where together these funds have an outstanding track record matched by no other organisation.

KEY POINTS

— NHMF is a fund of last resort, saving items of national importance that would otherwise be lost. Since 1980 it has made 650 grants totalling over £135 million for the acquisition of cultural property, including over £56 million for works of art.

— HLF has awarded over £1.2 billion of National Lottery money to museum and gallery projects and more than £237 million to archive and library projects.

— For all types of museums, galleries, archives and libraries collecting must be dynamic and incremental; it must be supported by skilled professional staff.

— There are two main issues facing our collections: the funding and skills required for smaller, often regional, institutions to be able to acquire material; and the much larger sums required by national organisations, chiefly museums and galleries, to acquire major works, notably fine art.

— NHMF and HLF are committed to continuing to play a key role in helping to enhance collections, to care for them and fully exploit their use for study, learning and enjoyment.

— NHMF is a fund of last resort and is not adequate to meet the demands for major acquisitions.

— HLF's funding criteria, its wide range and the need for additionality limit its capacity to fund major acquisitions.

— HLF believes that this should be tackled as a three-way partnership between Government, private funders, and the National Lottery though HLF and the Arts Lottery Fund. HLF is currently leading discussions with the sector to explore possible ways forward.

— Archives and heritage collections in libraries face the additional challenge of giving greater access to fragile material.

— In particular film and television archives are poorly placed to meet this challenge with inadequate revenue support.

INTRODUCTION

1. The National Heritage Memorial Fund (hereafter referred to as NHMF) was created by the National Heritage Act 1980 as a successor to the Land Fund, which was established to be a living memorial to those people who gave their lives for the United Kingdom in two World Wars. The initial payment of £12.4 million has been supplemented by an annual government grant, which since 2001-02 has been £5 million.

2. Since its inception, NHMF has operated as fund of last resort, saving items of national importance that would otherwise be lost. During its first 25 years it awarded £275 million across the whole spectrum of the historic and natural heritage.

3. NHMF is the parent body of the Heritage Lottery Fund (hereafter referred to as HLF), which distributes the heritage share (currently 16.66%) of the proceeds of the National Lottery. Like the NHMF, it operates throughout the UK, and is the nation's largest heritage funder. Since 1995 it has committed £3.6 billion in 25,000 awards to heritage projects.

4. HLF's aims are to:

— conserve and enhance the UK's diverse heritage;

— encourage more people to be involved in and make decisions about their heritage;

— ensure that everyone can learn about, have access to, and enjoy their heritage; and

— bring about a more equitable spread of grants across the UK.

5. HLF takes a broad view of what defines heritage, reflecting what applicants value as their heritage, and what they wish to leave as their legacy for future generations. Besides its support for the historic environment, natural habitats, museums, libraries and archives, it deals with industrial, maritime and transport heritage, as well as that of language, dialect and cultural traditions. Unlike traditional public funding streams for heritage, many of the projects HLF funds cut across these categories, reflecting its ability to take a flexible and holistic approach.

6. HLF's broad remit leaves NHMF able to focus on the purpose it was given by Parliament in 1980—funding the acquisition of the most significant at-risk pieces of the nation's heritage, often at short notice.

NHMF AND COLLECTIONS

7. Since its creation in 1980 NHMF has made over 650 grants totalling over £135 million for the acquisition of cultural property of outstanding importance to the national heritage including:

— over £56 million for works of art;

— over £48 million for other historic objects (including for industrial, maritime and transport objects); and

— over £30 million for archive and special library collections.

8. At a cost of £68 million, NHMF has enabled the acquisition, endowment and initial repair of 16 estates bringing historic buildings, their contents, parks and grounds (and sometimes their archives) into the public domain. That the paintings and furniture in great country houses such as Kedleston, Belton, Brodsworth and Tyntesfield were not dispersed on the open market, but retained with their estates as entities for everyone to understand and enjoy, has been entirely due to NHMF funding.

9. NHMF has helped museums to acquire over 260 important works of art. They include George Stubbs' Gimcrack with Jockey Up now in the Fitzwilliam Museum, Sir Joseph Banks by Benjamin West in the Usher Art Gallery, Lincoln, and the dramatic Iron Forge by Joseph Wright of Derby now in Tate Britain. Historic objects saved by NHMF range from Iron Age gold torcs and Roman coin hoards, to medieval treasures such as the Middleham Jewel (Yorkshire Museum), and the carved Dacre Beasts from Naworth Castle (V&A). They have included superb examples of furniture design and craftsmanship from William Kent and Thomas Chippendale to William Morris, Charles Rennie Mackintosh and Charles Voysey, yet also iconic 20th century technology such as The Flying Scotsman, the first steam locomotive to reach 100mph, and Bluebird, the car that broke the land speed record in 1962.

10. Among the many notable NHMF acquisitions for archives and libraries have been the papers of William Wilberforce (1759-1833), Member of Parliament, philanthropist and campaigner for the abolition of slavery (Bodleian Library, Oxford), the collection of over 32,000 negatives and prints from the 19th century photographic studio of Frith and Co (Birmingham City Library), manuscript volumes of Haydn's London Symphonies (British Library). It has also helped to retain in this country some of the rarest and most beautiful medieval manuscripts to have survived, such as the early 15th century Sherborne Missal (British Library), probably the greatest English Gothic manuscript in existence, and most recently, the early 14th century Macclesfield Psalter, one of the most technically accomplished and best preserved products of the East Anglian school of illumination (Fitzwilliam Museum).

11. As a fund of last resort NHMF has two important roles: either helping to bring about closure of an acquisition when most of the money has been found or, for items of the highest cost, providing an early indication of support that makes a fund-raising campaign possible.

12. The growing gap between NHMF's resources and the prices commanded on the international market make it less and less possible for NHMF to fulfil its remit to acquire the most significant items at risk.

THE HERITAGE LOTTERY FUND AND COLLECTIONS

13. A consequence of HLF's broad remit and expansive approach to heritage is that many of the projects it supports have a collections dimension, whether or not that is included in their headline description. In the last 12 years:

— one-third of HLF's total funding (over £1.2 billion) was awarded to 2,186 museum and gallery projects, including more than:

— £860 million on construction and refurbishment of buildings;

— £141 million on acquisitions; and

— £227 million on exhibitions, interpretation, collections management, education and outreach;

— more than £406 million was awarded to all 22 DCMS-funded museums, of which more than £334 million was to the 14 National Museums in England;

— over £295 million has gone to support projects in museums and galleries that now form part of Renaissance in the Regions network of regional museum hubs;

— more than 150 education posts and 100 spaces for learning have been created; and

— archive and libraries have received more than £237 million, including:

— £53 million to 190 record office projects;

— more than £24 million to the British Library and the National Libraries of Scotland and Wales;

— £18 million to 26 film and sound archive projects; and

— more than £56 million for archive and library acquisitions across the UK.

HLF FUTURE FUNDING

14. HLF is pleased that it has now been confirmed that it will continue to receive one sixth of the funding for good causes from the National Lottery. There will, however, be a number of factors that will impact on the amount HLF will be able to award in new grants during the lifetime of its next Strategic Plan 2008-2013:

London Olympics 2012

HLF has always known that a successful bid would be partly financed from the National Lottery. According to DCMS estimates, for HLF this means £75 million less in ticket sales and up to £68 million less as a result of changes in the allocation of Lottery proceeds, a total loss of income of up to £138 million, mostly in the three years leading up to 2012. Afterwards HLF expects to revert to receiving a 16.66% share of Lottery proceeds.

National Lottery Act 2006

The Act has changed the way that interest earned by Lottery Distributors on their balances is distributed. The National Audit Office estimated that this would cost HLF several million pounds per annum.

HLF's Approach to over-commitment

Since the start of the National Lottery HLF has committed more funds in new awards each year than it has received in income—on the basis that there would inevitably be a time lag between money being received, awarded to projects and drawn down by grant recipients. HLF is reaching the point where it cannot continue to over-commit. From 2008, it will only be able to distribute the amount it receives in income each year—around £200 million.

15. As a consequence of these factors, it is expected that there will be fewer major awards. This will have implications for the whole spectrum of the heritage which HLF funds, but may impact particularly on high-value acquisitions of cultural property.

MUSEUM SECTOR'S NEEDS AND PRIORITIES

16. Besides being simple repositories of precious objects and a resource for specialised scholarship, museums are increasingly regarded as fundamental to a thriving community. They can be generators of social cohesion, build local and personal identities, create opportunities for lifelong learning and provide an economic dividend through their contributions to regeneration and tourism. People working in museums are also increasingly aware of the need to be consultative, inclusive and representative of the different cultural traditions and heritage of the community they serve.

17. The unprecedented levels of investment brought by HLF has wrought enormous change in institutions across the UK, large and small, creating improved housing for collections, modern and user-focused displays and facilities and opportunities for fresh interpretation. Hundreds of other grants have enabled museums and archives to enhance their educational offer, to explore new means of engagement and reach new audiences.

18. However, realisation of their full potential can be a struggle for many. To identify the barriers to success HLF consults regularly with practitioners in the museum and gallery sector, both when it reviews its strategic plans and on specific issues, and has regular contact with representative national bodies. Within these discussions, the following issues regularly recur:

— a lack of resources for core tasks of documentation/cataloguing, conservation and caring for the collections;

— increasing public demand for services set against cuts in funding; and

— the workforce is neither as expert or diverse as it should be, and needs to develop leadership, curatorial, general management and business skills.

19. HLF has welcomed initiatives to tackle these problems. DCMS has convened a working group following its consultation on its discussion document Museums in the 21st Century, which is considering the fundamental needs of the museum sector in responding to people's changing expectations. HLF looks forward to learning the outcome of this work. The Museums Association's Collections for the Future, and its headline proposal on greater public engagement with collections runs entirely with the grain of HLF's own values.

20. The consultation undertaken in 2005-06 for Our Heritage, Our Future—HLF's third strategic plan—would appear to suggest that the issue of acquisitions is only a priority for a small, but important, constituency among HLF's applicants: National Museums, or national bodies that have a specialist strategic interest.

21. This apparent lack of more general concern may be a consequence as well as a cause of the problem: inadequate budgets and organisational structures based on functional skills rather than intellectual knowledge may have led to the loss of a "collecting culture" in many institutions. For many, a redeveloped gallery, building extension or outreach project can seem more urgent or a higher priority than a new acquisition.

MAXIMISING THE VALUE OF ACQUISITIONS

22. HLF requires all applicants seeking grants for acquisitions to show how they will achieve public benefit from the purchase. It encourages them to make the additional imaginative effort to use the opportunity presented by an acquisition to reach new audiences and develop new programmes.

23. HLF was pleased to note, in the report Protecting and Preserving our Heritage, the Select Committee's wholehearted support for its emphasis on encouraging access for all to heritage assets.

24. Three examples of HLF-funded acquisition projects illustrate this approach:

A Beggar Boy

The Jury

— Three museums—the British Museum, the Potteries Museum in Stoke on Trent, and Tullie House Museum in Carlisle—received an HLF grant for the joint acquisition of the "Staffordshire Moorlands Pan", a Roman bronze and enamelled piece found by a metal detectorist and thought to be a Roman "souvenir" of Hadrian's Wall. Following extensive conservation of the pan, it will be toured to exhibitions at all three venues which will be supported by education and outreach activities.

25. HLF accepts that if museums are to stay relevant, have outreach and education activity and stimulate the public interest, then they must maintain stores from which they can refresh their exhibits. Applicants for a grant for an acquisition however must demonstrate how the public will be given continuing access to the acquired object.

FUNDING FRAMEWORK FOR ACQUISITIONS

26. HLF shares the Museums Association's view that all museums should maintain an intelligent, proactive approach to developing their collections. These should be a dynamic resource, reflecting changes in knowledge and society over time and fulfilling museums' public duty to document and preserve particular aspects of culture, society and place.

27. Collections in national, local authority, university and charitable (independent) museums are all in the public domain and, taken together, constitute a national heritage resource. It is therefore in the general interest that all institutions should actively seek opportunities to enhance the quality and range of their collections. In enabling museums to make acquisitions HLF is in fact buying for the nation.

28. The concerns that are currently being raised about museum acquisitions reflect two distinct issues. The first is a diminution in collecting activity in local and regional museums. The second is the difficulty, for the larger and National museums, of acquiring items of outstanding importance to the national heritage at today's market prices. Here the risks are not only loss of opportunity for public access to such items, but their loss altogether to the national heritage.

29. HLF understands that among regional museums, some of the largest have purchase budgets of no more than £4,000 per annum, and many lack sufficient resources to provide even a small proportion of the purchase price of an item.

30. Whilst paucity of internal purchase budgets is one factor, so too apparently is a loss of specialist curatorial expertise and a lower priority given to collecting against other activities and developments. HLF therefore welcomes the initiatives being promoted and funded by MLA through Renaissance in the Regions which are leading to the creation of new subject specialist posts within the Regional Museum Hubs, and support for the development of museum subject specialist networks across the country.

31. A question that is sometimes posed is whether it matters if items of UK heritage are lost to the public cultural institutions of other nations, where their preservation and public access is normally assured. HLF believes this is a reasonable consideration in the difficult task of deploying scarce resources. The Reviewing Committee on the Export of Works of Art is currently not permitted to disclose the intended destination of an item for which an export licence has been temporarily deferred, and this prevents funders in the UK from taking this factor into account. HLF believes that this policy should be reconsidered.

32. HLF shares National museums' and others' concern over the loss to the UK of high-value items, mainly (but not exclusively) fine and decorative art. It recognises that UK Government policy is to balance the need for a vital art market, contributing to the national economy, with the need to sustain the national patrimony through mechanisms that provide both incentive and safety net.

33. From its inception HLF has tried to avoid having influence on market values. It has always adopted a cautious approach to trade valuations, and has often imposed, as a condition of grant, bidding ceilings for objects sold at auction so that its funds do not serve to inflate market prices. Occasionally, HLF's view of the value of an item, on which it always takes expert advice, proves to be lower than the market is prepared to pay, and the object is lost. That is regrettable, but HLF does not and cannot support acquisitions at any price.

34. HLF acknowledges the difficulties being experienced in National museums and galleries where, it is said, current resources available for purchases have only 13% of their value in 1980—the year when lack of resources led to the creation of NHMF[16]. Since purchase funds are a matter for internal allocation, this prompts the question as to whether it was helpful for the National museums, some years ago, to elect for the aggregation of their government grant-in-aid so that there was no longer an element ear-marked for purchase monies.

35. The availability of institutional purchase monies is a matter for Government, local authorities and others who have responsibility for the revenue funding of museums, an area where neither NHMF nor HLF has any remit. It is part of the problem, however, since without this basic resource it is impossible for institutions to access even what other sources of funding for acquisitions exist.

36. While tax concessions remain a bulwark, as the evidence of MLA's AIL Panel to the Committee's inquiry on Protecting, Preserving and Making Accessible our Nation's Heritage pointed out, the level of funding that needs to be generated to supplement the tax settled can often far outstrip the purchase grant or acquisition reserves of any UK institution. It appears that there is a class of object that, however important, can never be afforded—unless national governments come to the aid of institutions, as the Scottish Executive has done recently on two occasions in supplementing an HLF award: the acquisition of the John Murray Archive (for the National Library of Scotland) and of Titian's Venus Anadyomene (for the National Galleries of Scotland).

37. Meanwhile HLF is actively leading discussions with representatives of the National Museums, MLA, the Art Fund and professional bodies to consider possible ways forward in developing a constructive and agreed approach to acquisitions and the development of collections in general.

38. This important issue cannot be dealt with by HLF alone. We see support for the acquisition of cultural property as necessarily a three-way partnership between:

— Government—through fiscal arrangements, a properly-funded National Heritage Memorial Fund for outstanding items, national support for local museum purchases through the MLA Purchase Funds, and Arts Council funding for contemporary work.

— Contributions from private and charitable sources, such as the Art Fund, and private donors.

— The National Lottery, through the Heritage Lottery Fund and the Arts Lottery Fund.

39. This is conceptually simple and administratively straightforward. The problem arises because the resources available to NHMF and prospective purchasers do not match the current market. In this situation everyone looks to the HLF. But the declared priorities and sheer breadth of the heritage that HLF needs and wants to support, and the many calls on its finite resources, require that the other elements in the partnership must also be properly resourced and fully engaged. Both the established criteria of the Lottery and the principle of additionality make it inappropriate for the Lottery to be regarded as the mainstay of the nation's strategy for saving outstanding cultural property. Instead, this should be a matter of public policy. It was the reason why NHMF was established, but reducing resources over the years have eroded its capacity to discharge the job for which it was created.

40. HLF welcomes the government's commitment to double NHMF's annual grant to £10 million from 2007-08, but note that this is still £3.5 million less than the grant in 1985, and in consequence NHMF will continue to remain fettered in its fundamental role, and will only be able to deal with a fraction of the cases where its support would be appropriate. HLF urges the Government to accept the recommendation of the Goodison Report of 2004 that NHMF's annual grant should be raised to £20 million.



© Parliamentary copyright 2007	Prepared 25 June 2007