The British Museum and the National Gallery are finding it difficult to access over £50m given by private donors because of changes to Treasury regulations implemented under the last government. The scale of the problem is widespread, as the reserves for all national museums total over £285m. The museums have not openly admitted that a problem exists fearing repercussions from a Treasury who has already cut their budgets by up to 30%. It has been agreed that national museums can have access to half their reserves, amounting to £143m. Although in theory museums should now have access to half their £285m of reserves, DCMS has not yet told them how the new system will actually work.
The problem came to light last year when the British Museum tried to access reserves to help fund its £135m World Conservation and Exhibitions Centre. Trustees believed that they could allocate £42.5m from the museums own resources and were denied permission by then culture minister, Margaret Hodge. Much of the BM fund came from the sale of property and the DCMS unfairly informed the committee that the Treasury had not agreed to allow the money to be spent on the project. The Treasury restrictions introduced covers all government-funded bodies and this has had a knock on effect on museums, as they have found that the reserves can only be spent with Department for Culture, Media and Sport (DCMS) approval.
The British Museum still does not have permission to use £42.5m of its own money for its major expansion project. This is putting the museum in an extremely difficult situation.
Since the reserves issue was identified, most national museums have avoided difficulties with new donations by drawing funds in the year in which they are required or encouraging gifts to be paid into separate charitable accounts. The main problem lies with donations and bequests, which were given before the new regulations.
DCMS has backed the museums, and has taken up the issue with the Treasury. The fear is that the reserves problem will deter donors at a time when the government wants to encourage private philanthropy and museums need extra funding because of cuts in grant aid. The detail of how this will be managed with individual institutions has yet to be finalised and it has all come at a time of growing uncertainty within the public gallery sector.