Economics United Kingdom

UK braces itself for swingeing cuts across the board

A key question is whether the cuts will be staggered or all start immediately in 2011

LONDON. The Treasury has warned of cuts of around 25% to 30% for nearly all departments, with the spending review due to be announced on 20 October, covering the financial years 2011-12 to 2014-15. DCMS expenditure on the arts, museums and the built heritage accounts for about £1.1bn: a 30% reduction would bring that down to £770m. The cuts will inevitably impact on public services, although DCMS would prefer them to fall on administration. A key question is whether the cuts will be staggered or all start immediately in 2011.

National museums will have to consider reducing opening hours; mounting fewer, less ambitious exhibitions; and cutting back on educational services. This will have an impact on staff, and redundancies are inevitable. Museums could consider admission charges, but most are likely to resist this (DCMS opposes charging, although decisions are up to individual museums).

Nicholas Serota, the director of the Tate, says that the impact of a 25% to 30% cut would be “very severe”. He adds that the Tate (with other museums) has already taken a 3% hit in the current financial year, it has steadily pruned costs in recent years, and “income we receive from government provides a base on which we build our sponsorship and earned income”. Serota warns there would be fewer exhibitions of the ambition of “Gauguin”, which opens at Tate Modern on 30 September.

The Museums, Libraries and Archives Council (MLA) is to be disbanded by April 2012. This was announced by DCMS on 26 July, as part of a government-wide reorganisation of quangos. MLA is responsible for export controls, acceptance-in-lieu, the portable antiquities scheme, designation and accreditation of museums, security advice, and running the Renaissance in the Regions programme, which assists regional museums. The key question now is which organisations will take on the various MLA responsibilities. The Arts Council is the obvious answer, although this does pose problems. Many museums are not art galleries, but cover other aspects of heritage, and the Arts Council is itself facing substantial cuts.

DCMS is looking at other quangos, including English Heritage, the Heritage Lottery Fund (HLF) and the National Heritage Memorial Fund (NHMF). An HLF merger with English Heritage has been mooted in recent years.

The only glimmer of hope for the arts and heritage is the government’s pledge to divert back National Lottery proceeds. This would bring an additional £50m each for the Heritage Lottery Fund and the Arts Council. In a separate move, HLF is increasing the sum available for major projects from £20m to £30m a year.

Neil MacGregor, the director of the British Museum, has been commissioned by the government to prepare a study on the feasibility of cultural institutions developing endowment funds. Culture secretary Jeremy Hunt explained: “I don’t expect endowments to generate a significant revenue stream in the short term, but in the long term,” up to 20 years ahead. MacGregor’s report will be delivered later this month.

The House of Commons’ Culture, Media and Sport Committee has launched an inquiry into the funding of the arts and heritage. Its report is due next year.

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