2015 Spending Review and what it means for AIM members

There was good news and some surprises in George Osborne’s Autumn Statement and Spending Review announcements in the House of Commons on 25th November. Unusually, museums featured in his speech. The long-made argument that funding for culture is an investment appeared to have won through. He stated,

Britain’s not just brilliant at science. It’s brilliant at culture too. One of the best investments we can make as a nation is in our extraordinary arts, museums, heritage, media and sport. £1 billion a year in grants adds a quarter of a trillion pounds to our economy – not a bad return. So deep cuts in the small budget of the Department of Culture, Media and Sport are a false economy.

Although the Department of Culture Media and Sport (DCMS) received a 20% cut in its administration costs, in an unexpectedly good settlement, funding for the national museums was guaranteed for the next four years at current levels and Arts Council England was given a small increase of £10m in funding until 2019/2020.

The implications for museums in Northern Ireland, Scotland and Wales will be more apparent once those nations have set their budgets in the new year. Each country received a small, real-terms reduction in its allocations for the next four years.

Key announcements for museums and heritage were:

  • Increase in funding to Arts Council England, which Arts Council has said means their funding for National Partner Organisations and Major Partner Museums will be guaranteed until 2018.
  • Commitment to explore a tax relief for museum exhibitions, similar to the tax credit already available to theatres and orchestras
  • £500,000 towards plans to celebrate the anniversary of the Mayflower in Plymouth
  • £150 million to support the British Museum, Science Museum and Victoria and Albert Museum to replace out of date museum storage at Blythe House
  • £5m to support Manchester Museum to create a new South Asia Gallery, in partnership with the British Museum
  • £20 million investment to expand the Great Exhibition of the North and to create a new Great Exhibition Legacy Fund
  • Other museums to benefit included Museum of Science and Industry in Manchester and the Royal Marines Museum and D-Day Museum in Portsmouth. Military museums will benefit from Libor fines
  • £1m to create a lasting legacy for Hull’s UK City of Culture 2017 and prepare for the next UK City of Culture
  • A commitment to ensure the new English Heritage has a viable future.
  • Commitment to free admission for national museums and maintenance of their current funding.

Arts Council England and others are welcoming this very successful outcome for museums and the arts. The concerted effort to put across a positive message about the value that comes from investment in culture seems to have been successful.

Nevertheless, the implications for museums run by local authorities or who receive funding from their councils, are concerning, given the further cuts to local authority budgets which the Chancellor announced.

AIM members will also be affected by other areas of the budget. Key points include:

  • £40m Discover England investment fund to boost tourism across England.
  • The Charity Commission’s funding is being held until 2019/2020, which will be a real-terms cut. NCVO report that they are expected to start a consultation on charging for some services.
  • The call for evidence to inform the review of Gift Aid Small Donations Scheme has been brought forward to December 2015 – AIM would be pleased to hear members’ comments on this to inform our response.
  • An exemption for charities so they are not required to pay a tax on loans or advances made by close companies to charity trustees for charitable purposes.

There was no new announcement on business rates but it was confirmed that local authorities will be retaining 100% of the income from business rates. The anticipated announcement about whether charitable rate relief would be protected did not materialise. AIM remains concerned about the potential implications of this for both discretionary and mandatory rate relief, upon which so many of our member museums rely. An announcement is now expected in the budget in the Spring.

Further statements on the Spending Review:

Arts Council England

Heritage Alliance

Third Sector

DCMS

National Museum Directors’ Conference

The case for museums used by National Museum Directors’ Conference before the Spending Review – Museum Matters

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