NATIONAL MUSEUMS AND GALLERIES: INCOME (Hansard, 26 July 1985)

The Earl of Gowrie

As foreshadowed in its observations (Cmnd. 9127) on the Eighth Report, Session 1981–82, from the Education, Science and Arts Committee of another place, the Government have reviewed the present system for the treatment of revenue generated by the nine national museums and galleries funded from the arts and libraries programme.

Broadly speaking, under the present system, an estimate is prepared of the gross provision to be made for each institution for its general running costs in the coming financial year; another estimate is made of the likely level of its receipts; and the second is subtracted from the first to produce the new Vote provision. If the institution earns more than the expected receipts, it may spend the excess provided that it does so before the end of the financial year. Any excess money then remaining unspent must however be surrendered to the Exchequer. It may be "revoted" to the institution in a later year, but such revotes have to be met from within the arts and libraries programme determined for that year.

The Government intend to change this system to provide greater incentives for the national museums and galleries both to maximise their receipts (whether by the operations of their Vote-financed trading activities such as shops, by charging for admission where appropriate, or in other ways) and to use these more effectively. This also should improve the institutions' ability to respond flexibility to the needs of their visitors, in hours of opening and other matters.

I shall consult the nine national museums and galleries for which I am responsible in the course of the Parliamentary Recess about proposals for a new system. The main features of these proposals are:—

(a) a change from direct vote provision to grant-in-aid. The institutions will be able to carry over unspent balances at the end of the financial year within normal grant-in-aid rules;
(b) a new method of determining future annual grants, whereby the government will in effect provide a given percentage of each institutions' assessed running costs, and the institution will be expected to find the balance by its own efforts;
(c) acceptance by the Government that any receipts which an institution generates for itself, over and above its own target balance, will within normal grant-in-aid rules accrue to the benefit of the institution and will not be offset by any reduction in the amount of the Government grant for the year.

These changes should markedly improve the ability of the institutions to help themselves. When the consultations are complete, I will present my detailed proposals to Parliament. It will be my aim to introduce new arrangements at the start of the earliest practicable financial year, subject to any legislative or other administrative measures that may be necessary.