Funding of the arts and heritage

Written evidence submitted by the National Maritime Museum Cornwall (NMMC) (arts 16)

This submission is made on behalf of the National Maritime Museum Cornwall (NMMC), an independent charity which receives no regular funding from government and which, despite its name, is not an offshoot of the National Maritime Museum in Greenwich. The Museum was funded largely by the Heritage Lottery Fund, SW Regional Development Agency and private capital and opened in 2002. It is an accredited national1 museum and is managed by paid staff supported by a very active team of volunteers.

The inquiry is addressing nine questions to which our responses follow. They relate exclusively to the museums sector:

Q: The impact of recent and future spending cuts

· There may be much gnashing of teeth at the national level but the underlying viability of national museums will not be an issue whereas in the regions the likelihood of closure of a number of museums will be very real indeed

Q: Working more closely together in order to reduce duplication of effort and to make economies of scale

· There are few real initiatives that have not already been explored and even fewer crocks of gold

Q: What level of public subsidy for the arts and heritage is necessary and sustainable

· We have had a tradition of providing public funding to support the heritage. To change this, or dramatically to reduce current levels of funding will require a major shift in structures and business models which will lead to many casualties

Q: Whether the current system, and structure, of funding distribution is the right one

· No. It favours the DCMS-funded museums in defined urban areas who are already disproportionately advantaged, creating an uncompetitive market for other operators and organisations. The proposed changes will increase this disparity

Q: The impact of recent changes to the distribution of National Lottery funds

· The increased proportion for the Heritage Lottery Fund is welcomed, returning the proportion to the level enjoyed before the Olympics and other projects hijacked the money

Q: Whether the policy guidelines for National Lottery funding need to be reviewed

· This would be beneficial. The underlying issue is whether revenue funding can be provided and to what extent this breaks the principles of substitution between lottery and government expenditure

Q: The impact of recent changes to DCMS arm’s-length bodies - in particular the MLA

· The loss of the MLA as an organisation will not matter provided some of its work continues and is managed by an organisation which understands the sector’s needs

Q: Whether business and philanthropists can play a long-term role in funding arts at a national and local level

· They are likely to support development in secure national museums and galleries. They are unlikely to be interested in providing the essential revenue funding needed by regional museums

Q: Whether there need to be more Government incentives to encourage private donations

· Gift Aid already provides an incentive which benefits the charitable institution. There is scope for more imaginative application of the this, both for the highest rate tax-payers and to support regional priorities.

We note three phrases recently used by Ministers:

· ‘Abolishing the Museums, Libraries and Archives Council in order to focus efforts on front-line, essential services and ensure greater value for money’.2

· ‘Tough times, difficult decisions, fresh thinking’3

· Tourism is ‘… fundamental to rebuilding and rebalancing our economy.’ We need to ‘.. make the most of it not just here in London but right across the country.’4

1 The funding of museums

Funding for museums is currently a patchwork. All major and medium-sized museums require some form of revenue funding. This mainly comes in the form of grant-in-aid from central government - either directly or through the armed forces, universities etc - or from local authorities. Medium and small museums, frequently covering local or specialist subjects, survive on a combination of over-stretched endowment funds and largely volunteer labour.

Development funding comes from central and local government, Lottery funds - especially the Heritage Lottery Fund – sponsorship, patronage and earned income .

The national museums are particularly privileged as they are funded to support their existence, free admission and much of their development. The metropolitan ones are well-placed to attract additional funding because of their high footfalls and powerful media who are able to provide sponsors with the oxygen of publicity they crave. Donors, as opposed to sponsors, are also more likely to contribute to a high-profile national museum whose future is assured than to a regional or independent museum. Metropolitan museums are often able to tap into free, or low cost, travel for educational groups.

The larger a museum’s grant the more it can do. The nationals have been able to put on major exhibitions and re-develop permanent galleries to standards which regional museums can only dream about. This raises the bar for customers’ expectations at less-fortunate museums.

A regional museum, perhaps supported by a local authority grant, is correspondingly disadvantaged. Its income has tended to go into funding its existence and providing free admission, leaving limited funds available for development.

The DCMS and MLA have worked to rectify this disparity in recent years through programmes such as Designation and Renaissance in the Regions. The latter was designed to do what its name says: to help to improve standards in non-national museums through development and improvements to systems behind the scenes. Unfortunately it encouraged some Renaissance hub museums to adopt unsustainable business models and/or to increase their core running costs.

Non-hub museums were left to fend for themselves, competing as best they could. The NMMC was unable to bid to become a Renaissance hub museum not only because a close neighbour was already a hub but because it opened after the scheme started. It was also unable to apply for Designation for its collection of boats as these are still formally owned by NMM Greenwich.

The Heritage Lottery Fund has been a useful source of funding for development and acquisitions but their resources have been squeezed in recent years as money has been syphoned off for the Olympics and other purposes.

Museums have high fixed costs. Each extra visitor at a charging museum is net income straight to the bottom line, making the difference between profit and loss. Each museum will have its own funding model, derived over the years, which is in delicate balance. These are very sensitive to small changes which have far-reaching consequences.

Seen from above, the big picture of museum funding is a mess: a relic of historical decisions, a postcode lottery and thus socially divisive. The pattern of grant funding has skewed the market, squeezing out private sector initiative and undermining the business models of museums, like the NMMC, that do not have access to these funding streams. The most glaring anomaly has been the provision of free admission.

2 Free admission

Free admission skews the market for other operators making it effectively impossible for the private sector, or for bodies without revenue funding, to compete. Most large and medium-sized museums offer free admission, arguing educational benefit, and funding this from grant aid. In the case of the nationals, two further arguments are advanced: that the objects have been purchased with tax-payers’ money and that it allows those tax-payers access to ‘their’ collections and that the museums attract a large number of overseas tourists to the UK.

The argument about ‘national collections’ does not stand up as the nationally-funded collections are actually distributed throughout museums across the country and not just in the national museums and by no means all the nationals’ collections were purchased through taxes.

The tourism argument is particularly thin. National museums and galleries such as the Louvre, Uffizi, Rijksmuseum or Prado all charge for admission and yet these cities do not markedly lack foreign tourists. We are accustomed to paying for admission to such places when overseas and yet expect the British Museum to be free in order to attract tourists (to London which already attracts over 50% of the UK’s overseas tourists). Of course, the higher the proportion of foreign tourists at the British Museum, the less credible the argument for allowing tax-payers access to their collections.

The tourism argument breaks down completely at other national museums such as Arbeia Roman Fort (Tyne and Wear Museums) which is little different from an admission-charging English Heritage Roman fort or privately run site (Vindolanda) a few miles away; at the National Football Museum, at the National Coal Mining Museum or even at metropolitan galleries such as the Horniman. All are funded by DCMS to provide free admission.

Strangely it does not appear to apply in other areas of high tourism such as Cornwall where the level of overseas tourism is small but growing. Here a visitor is expected to pay admission to Tate St Ives, ostensibly a national museum, and to NMMC which bears the name of a national but is not nationally-funded.

The unfairness of the scheme is further highlighted by the fact that the Tate Liverpool is free since it operates in an non-competitive market since the other Museums and Galleries on Merseyside are free while its sister in St Ives charges admission because it competes in a more ‘natural’ market.

While free admission to national museums is politically sensitive and was specifically included in the Coalition Agreement, it remains an underlying thorn in the flesh when trying to establish a vibrant and sustainable museum industry in this country and is an opportunity for fresh thinking.

3 Loss of the quangos

Two main quangos impact the work of this Museum: the MLA and the National Historic Ships. The first is to be abolished; the second de-classified, whatever that may mean.

The abolition of the MLA per se is likely to be neutral if its work is to continue. Its policy work could well be transferred to any new body that understood the needs of museums. There is an obvious danger of mission-creep in a new organisation which would not be welcomed by museums generally.

The reduction in funding for Renaissance and other grant programmes is going to be felt most acutely by regional museums. They are likely to turn to local authorities for further support but as the provision of museum services is not a core function for them, and as their budgets are also under pressure, the impact is likely to be devastating, especially for those that have relied on Renaissance money to provide revenue support. It is therefore likely that a number of these museums will close. The tragedy is that these museums are the engines for local tourism and the impact will therefore be felt by other tourism businesses such as accommodation providers.

The National Historic Ships is an altogether smaller organisation but one that has made great strides in recent years and the NMMC has worked closely with them. It would be a great shame if its work were to disappear or be diminished as its work helps to inform other funding decisions and it plays a central and specialist role in protecting the nation’s historic fleet. The NMMC has been running an analogous database - the National Small Boat Register – for a number of years using volunteer labour, exactly as envisaged by the ‘Big Society’ but this has only been possible because the Museum has provided the facilities and equipment free of charge.

4 Could museums cut costs or be more efficient?

It is difficult to see what more can be done to reduce duplication or make economies of scale. The majority of small and medium-sized museums have been exploring such solutions for years, working in partnership where objectives overlap, and saving money to fund new developments. The NMMC is part of a well-developed network of museums and galleries in Cornwall sharing professional, administrative and administrative advice and services, created without outside support.

There may be opportunities to combine organisations in the regions but the cost savings are likely to be relatively slight compared with the levels of need and there is always a risk of creating a greater degree of bureaucracy.

Much has been made about the need to be entrepreneurial and to attract additional sponsorship. The majority of museums have long been aware of the need to raise funding from novel sources. If this were easy they would already have set projects in place. There are some case studies where, for example, freedom from direct council control and transfer of a museum into a charitable trust has brought new freedoms but these are the exceptions rather than the rule and will need to be dealt with on a case-by-case basis

The opportunities to attract major sponsorship outside metropolitan areas are very limited as suggested above (see para 1).

Museums are, by their nature, bureaucratic. In an effort to improve general management standards and procedures, the MLA created the Accreditation scheme. Our view was that this not a generally helpful experience as it concentrated on procedures and trespassed well outside its areas of competence or understanding, encouraging an inward-looking focus on paper-based systems at the expense of good management. Recent announcements have said that the scheme will continue. This does not suggest that fresh thinking is being applied or that money is to be directed into front-line services. As such, it does nothing to support innovation or ensure greater value for money.

Recent media coverage of disposals from museum collections have highlighted what a torturous and contentious process this can be1. Meanwhile, stores up and down the country are full of un-displayed objects, costing money. Some work is being done on disposals but it is several orders of magnitude adrift of where it should be.

It is suggested that regional museums should work with nationals to help unlock some of their collections. This sounds easy but it simply emphasises the disparity in funding and approach. In recent weeks, one national museum and two Renaissance museums have refused even to consider the loan of any object to this museum until 2012; another is setting standards which would require over £2,000 for the transport of a stuffed penguin for an exhibition. Encouragement to co-operate is all very well but national museum standards are showing no sign of relaxation; if anything they are getting more restrictive.

If fresh thinking is required then a more active debate about rationalisation and disposals is an obvious candidate, and a much more flexible approach to inter-museum loans, despite the entrenched objections that will be raised by the museums’ industry.

5 Could museums raise additional funds?

Museums face a bleak future as their first priority has to be revenue funding. Sponsors and donors are generally not interested in providing long-term revenue funding. Their interest is in new and developmental projects.

Lottery distributors have not been permitted to provide revenue funding and this principle has helped to avoid substitution of government expenditure, a key tenet of the Lottery as a whole. They tread a difficult tightrope. Funding for objects encourages a degree of inflation in the market which devalues museums’ own purchase budgets.

Lottery funders are able to provide matching funds for development projects although sponsorship remains difficult in the regions for the reasons outlined above.

We naturally welcome the re-balancing of Lottery funding post-Olympics however, we sound a note of caution. Lottery funding for new museums or attractions should, where possible, be reined in. There have been too many examples of new museums, visitor attractions or heritage centres, this one included, where money has been provided against unrealistic and unsustainable business plans. It may appear attractive and exciting to fund a new facility but the risk involved in investing in a speculative business plan for a new establishment is much greater than in helping to solve the problems of existing museums who have experience and for whom data is available. This might be reflected in policy guidelines.

We also wonder whether there is scope for allowing the Lottery bodies to provide a degree of revenue funding for some establishments even though this breaks existing rules. Better to support existing museums and keep them open and supporting tourism and their local communities than to see them close and know that the remaining ones are able to mount glossy new exhibitions or buy additional objects.

6 A summary of some of the options mentioned

· End free admission to national museums and re-distribute funds to the regions where it could provide much better value for money as smaller museums tend to lighter on their feet, encouraged by the necessity of being market-driven and customer-focused

· Encourage the nationals to make better use of their accumulated reserves

· Allow the Heritage Lottery Fund to provide revenue funding to selective museums

· Amend Gift Aid to provide greater incentives to high net-worth individuals

· Radically revise the Accreditation scheme to create a ‘light touch’ version, transferring it to the Museums Association

· Channel the Renaissance in the Regions money more effectively, and as a less target-driven scheme, to a wider range of regional museums

· Distribute any funds released to support regional museums in the front line

August 2010