UK museum cuts and the broader context

I may have spoken a little too optimistically in my last blog about the likely effects of the UK budget cuts on the museum sector. Certainly the cuts at a national level have not proven to be as severe as was widely feared (and planned for). But the reality of post budget life in Britain is already beginning to hit home, particularly at a regional level, where there are thousands of museums which do not receive DCMS (Department of Culture Media and Sport) funding. Local museums are almost universally funded by local councils and that is where the cuts are really going to bite, with local council funding reduced by 28% as compared to 15% for national museums. The UK Museums Association is running a ‘Cuts Monitor’ which details the reality of this situation - an example already of an award winning local museum having to cut staff from 70 to 15. Meanwhile universities have seen an even bigger cut of 40% to all but research programs and science and technology teaching, which is bound to have a direct effect on university funded museums. English Heritage, which at one stage looked as though it might be abolished and its operations amalgamated into another body, has survived but been hit with cuts of 32%, resulting in pay cuts, and the loss of 8 directors, and this after a 3 year pay freeze.

So are they going to be able to do about it? English Heritage currently generates 25% of its’ income from commercial activities mostly at their 400 historic sites and properties, and they are going to have to look to ways to expand these. I am indebted to my colleague Sarah Jane Rennie of the Museums and Galleries NSW for drawing my attention to some of the other proactive ways in which the sector is looking to help. Sarah Jane has recently been in Scotland and came across a toolkit that Museums Galleries Scotland recently released to guide museums and galleries practitioners through times of drastic funding cuts, Choices for Change. It is aimed at local council museums that need to look at alternative ways of governance and operation to survive, and will have resonance with similar organisations in Australia.

And at another level, there is an interesting article in the latest Museum Practice on how to make loans more economically sustainable, which also has the advantage of their being more environmentally sustainable. Where this is coming from is that loans per se are expensive, and that therefore as the budget cuts hit so loans will fall, as loaning institutions attempt to recover the full cost of making loans (typically an administration fee is charged which in reality does not cover the full costs). The UK Museums Association is reviewing its key principles for loans through its Smarter Loans initiative. This is aimed at reducing costs in areas such as packing and transport by adopting a ‘common sense’ attitude. Not sure what that means but it always sounds like an excellent idea to me.

What I like about this review also is that it is helping to feed into the work that the Eu EGOR group (Environmental Guidelines Opportunities and Risks) are undertaking in looking at how environmental guidelines can be relaxed within certain parameters. This of course has a direct effect on energy costs which are typically 70% of a museum’s costs after salaries have been paid. And that is going to help lead worldwide to a new approach to environmental guidelines. AICCM has currently a taskforce in place which I am chairing to look at exactly that issue, the fundamentals as articulated by the National Museums Directors’ Conference guiding principles for reducing carbon footprints being:

• Environmental standards to become intelligent and better tailored to needs. No longer use blanket conditions for entire buildings
• Care of collections should not assume air conditioning
• Natural and sustainable environmental controls to be explored and exploited
• New or renovated museum buildings should aim to reduce carbon footprint as their primary objective

So at least out of the adversity that our UK colleagues are experiencing some good may come.

Julian Bickersteth
Managing Director
internationalconservationservices

Museum cuts and directors’ salaries – are they related?

An article this week in the Chicago Tribune reported that the Art Institute of Chicago has laid off 65 staff, on top of the 22 it laid off last June. The director James Cuno, one of the giants of the US art scene, has cited the almost 25% cut in endowment income as the cause of such, putting the Art Institute in the same group as the mega rich Getty Museum and Metropolitan Museum of Art, both of which have laid off staff and cut programs in the last year.

It illustrates the very different form of funding that the US museum/gallery scene lives off, when compared to the UK and Australian situation. Endowments resulting from philanthropic giving have long been the main stay of US museum funding, a model eyed with envy from elsewhere, where there is nothing like the level of philanthropic giving to the arts. But it has a downside, namely when those endowments are linked to the stockmarket and a little matter of a GFC comes barrelling into town.

Across the Atlantic the UK museum sector which relies predominately on public sector funding has fared better so far. They of course are wondering what now happens with the new coalition government in power, but the Conservatives went to the general election proclaiming in David Cameron’s words ‘ Our culture is second to none’. Nick Clegg ( now Deputy PM) had stronger words ‘ Arts funding is a duty not an option for any government’, and even the new Chancellor of the Exchequer, George Osborne got in on the act speaking at the Tate last December, when he said ’The arts play a vital role in our communities, helping to bind people together and create real social value.’ Whilst it is clear there will be cuts to their funding of as much as 20% , as no part of the UK ‘s public sector will be able to avoid such if the UK £160 billion deficit is going to have any chance of being reduced, there are also ways in which this may be ameliorated. The National Lottery was set up to fund heritage, the arts, sport and charities, and although its funds have been siphoned off to all sorts of other causes given its phenomenal success, there are signs that the government will restore it to its original purpose. There is also talk of a Museums and Heritage Bill which would give national museums greater financial independence.

But there are swings and round abouts with such matters and the result of the massive endowments that US museum directors have to manage means they also (by UK and Australian standards) can earn massive salaries. James Cuno earned US$626,000 last year up 46% from the previous one, no doubt so he didn’t get left behind his colleagues, such as Boston Museum of Fine Arts director, Malcolm Rogers on $719,000 or the Met’s Phillipe de Montebello ( since retired) on $818,000. But they are eclipsed by the star of the show, Glenn Lowry, director of New York’s MOMA, who earned $1.32 million last year ( salary $956,000, ‘retention bonus’ $191,000, ‘performance bonus’ $200,000, pension $262,000 plus rent free condo benefit valued at $336,000) , and this included a voluntary pay cut due to the recession taking his earnings down from, wait for it, $1.95 million the previous year.

So it’s not entirely surprising, returning to the Chicago Art Institute, that a blog comment on the article reads "When the director is making over $700,000 a year, and accepts a pay raise when the rest of the staff goes for years without raises, and scores of employees are losing their jobs, the whole thing seems shameful and embarrassing".

Haven’t I heard that comment from the corporate world recently?

The efficiency dividend – or not

Working as we do in the private sector, there are various public sector anomalies that we just don’t get. One of these is the so called ‘Efficiency dividend’ that year in year out federal collecting institutions, e.g. the National Gallery, the Australian War Memorial, the National Library etc, seemed to get pinged with. Certainly from our perspective we can’t see any more efficiencies, and all that it appears to achieve is a reduction in staff and services.

Well, now this has been confirmed as told in a fascinating article published in Public Space; The Journal of Law and Social Justice (2009) Vol 3, and available on line.

The article details that the efficiency dividend was implemented by the Hawke labour government in 1986, as a short term budget cut designed to require agencies to look for efficiencies in their operations. But here we are in 2009 with the ‘dividend’ still being ‘paid’ to the government at an average of a budget cut of 1.25% per annum.

And of course as the efficiencies have long since been achieved, what it really means is a budget cut year in year out. The result is what we have been seeing, namely a diminution in staff and services, and this article spells out in graphic detail what these are. The information in it is drawn from a Parliamentary inquiry into the ongoing effects of the ongoing dividend.

Its’ effect crosses many parts of the institutions operations, from reducing and delaying digitisation work, cutting staff (to a level where the National Library states that in 3 years time the effect of the dividend will mean through resulting staff cuts ‘it will not be a viable institution’) , limiting pay increases and thus losing skilled staff, and curtailing touring exhibitions (the National Gallery has reduced theirs from 14 to 9 over the last few years).

It’s a depressing article, the one hope being that the Parliamentarians that heard the evidence at their inquiry are finally going to remove the dividend. Given that Rudd promised as part of his election platform that if elected he would cut an additional 2% from agency budgets to ensure efficiencies, I fear the future for collecting institutions is looking pretty bleak.