§ Mr. Evennettasked the Minister for the Arts whether the Government have completed their consultations on a new system for handling the income generated by national museums and galleries; and what financial provision will be made for these in 1986–87.
§ Mr. LuceConsultations on the basis outlined in my predecessor's statement on 26 July 1985 have confirmed the need, which was recognised in unanimous recommendations earlier from the Education, Science and Arts Select Committee, for a greater incentive for the national museums and galleries both to maximise their receipts and to use them more effectively. In my view such an incentive entails two main changes:
- i. forecast receipts should no longer be specifically netted off against total Estimate requirements to provide a net grant; and
- ii there should be a reasonable facility to carry over unspent moneys at the end of the financial year.
I believe that, in order to effect these changes within existing conventions, it would be necessary to convert the method of financing from direct vote provision to grant-in-aid. I therefore propose to consult the Public Accounts Committee on this, and also the Treasury and Civil Service Select Committee and the Education, Science and Arts Select Committee. Subject to their views, I would propose to make this conversion from the financial year 1986–87 for the nine national museums and galleries for which I am responsible, so that the institutions could derive the earliest possible benefit from the change. The main Supply Estimates will initially be presented to Parliament on the existing direct vote basis. Implementation of the changes would entail presenting revised Estimates to Parliament in the summer.
Under the new arrangements, the Government would not now propose to determine the grant-in-aid as a given percenage of each institution's assessed running costs, as foreshadowed in the statement of 26 July 1985. In the light of the representations which the museums and galleries have made, the size of the revised grants in 1986–87 would instead by settled starting from each institution's net vote provision (excluding revotes) for running costs in 1985–86. The former proposal would have involved reducing the grants of some institutions and increasing those of others in order to produce a uniform percentage to be financed by the Exchequer with inequitable results; the method now envisaged avoids the need for that adjustment.
The cash levels of grant-in-aid would be increased as appropriate in future years without any further adjustment to reflect forecast changes in receipts for those years. At 383W the end of each financial year the institutions would be able to carry over unspent moneys equivalent to up to two per cent. of the annual grant and up to 10 per cent. of their annual receipts. Arrangements would be made to enable them to transfer part of their receipts to endowment funds if appropriate for the financing of long-term projects. The system of revotes of unspent surplus receipts from previous years would no longer be necessary, and would cease upon the introduction of grant-in-aid.
The purpose of these proposals is not to replace public by private funding, but to provide an opportunity for a larger growth in the total funding available to the national museums and galleries than would otherwise be possible. The institutions and their trustees will need a firm basis on which to make their plans. It is the Government's intention that there should be no further change in the method of settling their grants for running costs for at least three years, and that an adequate period of notice should be given of any intention subsequently to introduce such a change. During that period no institution, however much it earns, would have its grant-in-aid affected on that account.
Provision on existing direct vote basis £ million cash *1985–86 1986–87 †Purchase grant †Other net running costs †Purchase grant †Other net running costs British Museum 1.460 11.533 1.494 11.931 Imperial War Museum 0.100 4.345 0.126 4.318 National Gallery 2.750 3.889 2.750 3.936 National Maritime Museum 0.205 4.131 0.205 4.568 National Portrait Gallery 0.310 1.467 0.310 1.509 Science Museum 0.461 8.493 0.384 8.749 Tate Gallery 1.815 3.830 1.815 3.834 Victoria and Albert Museum 1.145 9.553 1.145 9.790 Wallace Collection — 0.877 — 0.907 * 1985–86 figures include supplementary estimates to date.
† Purchase grant and other net running cost figures include revotes where applicable in each year.